Swiggy hands over key food brands to new operator

Swiggy has entered a licensing agreement with Kouzina to manage its digital food brands, including The Bowl Company, Homely, Soul Rasa, and Istah.

The agreement includes a future transfer of ownership to Kouzina, pending certain conditions. Kouzina will handle operations, innovation, and expansion into new markets.

Homely currently operates in select Bangalore locations, while The Bowl Company is set to launch soon, according to Kouzina CEO Gautam Balijepalli.

This partnership is part of Swiggy’s ongoing restructuring of its food and beverage operations.

Swiggy plans to scale, while rival Zomato (now Eternal) shut down Quick and Everyday due to low demand. Swiggy also sold its cloud kitchen unit and ended Genie in several cities.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Food delivery platforms are pivoting toward asset-light models amid profitability pressures

Swiggy’s strategic agreement with Kouzina continues the company’s multi-year restructuring effort to shed asset-heavy operations in favor of licensing arrangements.

The company previously sold its cloud kitchen business (Kitchens@) to Loyal Hospitality in March 2023, demonstrating a consistent strategy of moving away from capital-intensive operations 1.

This approach reflects broader industry patterns as food delivery platforms face significant profitability challenges, with Swiggy having laid off 1,100 employees and scaled down cloud kitchen operations in 2020 during an earlier restructuring phase 1.

Kouzina’s focus on an “asset-light expansion model” for The Bowl Company and Homely aligns with industry trends seeking to reduce operational costs while maintaining market presence and brand value.

This licensing approach allows Swiggy to retain brand equity while transferring operational challenges to specialized partners, potentially addressing the sector-wide struggle to balance growth with sustainable economics.

2️⃣ Quick commerce models face structural challenges despite consumer interest

The food delivery sector is witnessing a pattern of rapid strategy shifts, with Zomato’s recent discontinuation of its 15-minute food delivery service “Quick” just four months after launch highlighting fundamental challenges in the quick commerce model 2.

Zomato CEO Deepinder Goyal explicitly cited inadequate restaurant density and kitchen infrastructure as barriers to delivering consistent customer experiences at such speeds 3.