Swiggy has formally sold its cloud kitchen businesses, including Homely and The Bowl Company, to Kouzina meal Tech, marking a change in approach for one of India’s biggest meal delivery behemoths. Swiggy’s private label aspirations, which previously showed promise for food aggregators seeking to diversify and gain greater supply chain control, are now over thanks to this purchase.
However, what are the true implications of this move for the food tech industry? What caused Swiggy to retrench from its private label endeavours? What will happen to Kouzina next?
Let’s dissect it.
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What are food delivery private label brands?
Food delivery platforms themselves are the ones that create, own, and run private labels, sometimes referred to as in-house or white-label brands. These brands are often operated through cloud kitchens, which are delivery-only establishments without dine-in choices, in contrast to third-party restaurants that are advertised on apps.
Swiggy joined this market alongside companies such as
The Bowl Company is well-known for their rice bowls and single-serve Indian entrees.
Homely: offering reasonably priced thalis to cater to the daily meal market.
Breakfast Express specialises in making deliveries quickly in the morning.
The concept was straightforward: take control of the whole customer journey, from the app’s user interface to the cooking and delivery of meals. It gave platforms more control over the consumer experience, increased profitability, and the ability to fill supply shortages in underserved areas or during busy hours.
Why not stop it now?
The Reasons Behind Swiggy’s Private Label Business Closure
On paper, private labels seem like a novel and scalable concept, but they haven’t worked out the way Swiggy had hoped. The following are some of the main justifications for the choice:
1. Pay attention to core functions
Across its three main verticals—food delivery, grocery store Instamart, and eating out—Swiggy has been focusing more intently on profitability. It takes a lot of money and effort to run private label brands.
2. Shifting Market Conditions
The market for meal delivery in India is changing quickly. Swiggy is probably concentrating on increasing profitability by reducing endeavors that aren’t producing the anticipated return on investment (ROI) in light of the heightened competition from Zomato, modern quick-commerce firms, and inflation-driven cost constraints.
3. Complexity of Operations
It’s not easy to oversee food businesses from start to finish, especially when they span several forms and cuisines. Swiggy found itself in a position where it was getting harder to scale without sacrificing quality due to supply chain problems, quality control challenges, customer complaints, and growing input prices.
Who Is Kouzina Food Tech?
You have already experienced Kouzina’s work if you have ever placed an order with companies like KaatiZone, Indiana Burgers, or WarmOven.
A well-known multi-brand cloud kitchen platform with operations in more than 40 Indian cities is Kouzina Food Tech. Kouzina is the perfect buyer for Swiggy’s digital brands because of their robust delivery-only business strategy, which has allowed them to subtly become a major force in the cloud kitchen ecosystem.
Kouzina will do the following with this acquisition:
Include Swiggy’s brands in its current kitchen system.
Increase visibility in Tier 1 and Tier 2 cities.
Make use of Swiggy’s well-known brand to increase consumer confidence.
Kouzina’s portfolio is strengthened by this acquisition, which enables them to satisfy a greater range of palates, particularly in the comfort food and reasonably priced daily meal markets.
Implications for the food technology ecosystem
This purchase represents the shifting dynamics in India’s meal delivery and cloud kitchen industries and goes beyond a simple commercial transaction. This is what it means:
1. The future is in consolidation
Due to fierce competition and high burn rates, standalone cloud kitchen businesses are having difficulty. This transaction suggests that the sector is heading towards consolidation, with a small number of powerful companies controlling the market through acquisitions of smaller businesses.
2. Platform models are being used again by aggregators
Food delivery services like Zomato and Swiggy are refocusing on their primary business strategy, which is to operate as marketplaces rather than food producers. This enables them, particularly in front of IPO aspirations, to grow more quickly with fewer complications and reduced operational expenses.
3. The cloud kitchen game will be led by skilled players
Businesses that have spent years honing the craft of cloud kitchens, such as Kouzina and Rebel Foods, are now in a position to take the lead. They have an inherent advantage due to their operational background, emphasis on brand development, and capacity to manage the complexity of several brands.
The Future Direction of Swiggy
This calculated move is a refocus rather than a retreat. With Instamart, Swiggy continues to dominate the meal delivery and fast grocery markets. As it returns its attention to enhancing user experience, logistics, and profitability, we may anticipate:
increased spending on delivery services that are hyperlocal.
growth of the Dineout and Instamart segments.
Possible initial public offerings in the upcoming year.
Additionally, this increases fairness by allowing more third-party eateries to use Swiggy’s platform and reducing internal conflicts of interest.
Conclusion
Will Food Delivery’s Use of Private Labels End?
Not always.
Even while Swiggy does not now provide private labels, the concept is still promising—just not in a commercial setting. Companies like Curefoods (EatFit, Yumlane) and Rebel Foods (Faasos, Behrouz Biryani) keep demonstrating that cloud kitchens can succeed when operated as stand-alone, brand-first enterprises.
The demise of Swiggy serves as a reminder that goods and platforms aren’t always compatible. Sometimes less is more in the cutthroat food tech industry of today, and understanding when to change course may be just as effective as starting something from scratch.
