The Next Biggest Restaurant Isn’t Taking Reservations

Navigating the Global Landscape of Ghost Kitchen Innovations

In 2021, Wendy’s declared their ambitious intent to develop some seven hundred ghost kitchens across the United States. Two years later, and the home of the Frosty backpedaled hard, executing a complete shutdown of the experiment. The most notable part of the announcement isn’t the headlining domestic closure. Rather, it comes in a buried paragraph at the end of the memo stating Wendy’s expansion of their Indian distribution deal with Rebel Foods: A deal promising to set up for delivery two-hundred-and-fifty cloud kitchens in and around the South-Asian nation. 

Rebel Foods, the decade-old Indian ghost kitchen operator, has developed the largest network of digital restaurants in the world. Rebel’s CEO Jaydeep Barman, however, has a larger goal in mind. He wants to open up ten thousand fully functional restaurants by the end of the year. Over the next set of articles I’m going to dive into the three reasons why Barman’s estimate is not only realistic, but is potentially conservative. In short, why Rebel Foods may become the largest food brand in the world. And why you’ve never heard of them.

First, a brief overview of how Rebel operates. Rebel’s business is first and foremost one of distributed ghost kitchens. What Barman calls a restaurant is really a cloud kitchen with distribution capability for a particular digital brand. So if both my friend and I order Wendy’s to our houses, but the food is cooked in two separate kitchens, that counts as two distinct “restaurants” in Barman’s book. 

Hundreds of such ghost kitchens are peppered across India. These kitchens aren’t assigned to a single restaurant. Instead, they fulfill a number of different brands. So that spot making my Pretzel Baconator might also be making Spaghetti Pomodoro sold under a different logo. We’ll call this the “virtual dining hall” model. Like a dining hall, Rebel’s kitchens are outfitted with all the equipment to make cuisine ranging from wok based stir frys to pan cooked pizzas, for that’s exactly what they do. Rebel runs six or so separate restaurants from a single kitchen. That means launching one thousand “restaurants” requires less than two hundred distinct fulfillment locations. This “one-kitchen-multiple-brands” approach enables exponential revenue growth without increasing fixed costs. Rebel can spin up and fulfill an entirely original brand at the expense of only ingredients and creative effort. 

Critically, Rebel owns and operates all of these kitchens through general managers referred to as “Chief Delight Officers”. For comparison, NextBite, an American corollary of Rebel’s, doesn’t own their fulfillment. Instead, Nextbite depends on kitchens provided by existing restaurants with excess capacity. They don’t own the vertical production pipeline. Upsides to doing so, as Rebel does, are innumerous: Rebel’s friction to launching a new product (restaurant) is minimized to effectively zero. The company can immediately deploy new ideas to their CDOs for testing and feedback. Rapid innovation and iteration of this sort defines Rebel’s rapid ascent of the digital restaurant mountain.