Dil Foods: Revolutionizing the Restaurant Industry with Virtual Operations

Dil Foods Wows the Sharks

Arpita Aditi, founder of Dil Foods, captivated the Sharks in episode 5 with her innovative solution to a common problem: struggling restaurants. She tackled the issue head-on, asking, “Why do restaurants go bust?” and explained that it is usually due to low profits and high staff dependency.

Arpita Aditi is a Biotechie from Ranchi, Jharkhand, with experience working with Himalaya Drugs, Reliance Capital, and Swiggy. During her time at Swiggy, she noticed that many restaurants in India are underutilized, and new restaurants or those without an established brand struggle to sustain themselves in the competitive market. To address this issue, Arpita left Swiggy in 2019 and founded Nutnblot in 2020. Nutnblot was an agency that handled the business’s online marketing and operations. However, she soon realized that the root cause of the problem was low profitability.

To tackle this challenge, Arpita founded Dil Foods in April 2022. Dil Foods helps restaurants operate virtually and increase their profits without relying heavily on staff.

About the Brand:

Dil Foods is a virtual restaurant operator, with 8 cloud brands like “DIL Punjabi” and “Bihari Bowl,” and partnerships with over 65 restaurants across 3 cities, Dil Foods delivers standardized, hygienic food to 111 outlets. They’ve already helped restaurants see average generated incremental revenue for partners of around 6 crores. Through rigorous recipe standardization (68% of their dishes) and quality control measures, they ensure consistent taste and safety across all locations. Dil Foods even partners with small and large restaurants for efficient last-mile delivery, ensuring your food arrives hot and fresh.

Dil Food Brands:

1. DIL Punjabi
2. Bihari Bowl
3. Khichdi Bar
4. The Chaat Cult
5. Bhole ke Chole
6. House of Andhra
7. Aahar
8. Chahwa

Grasp on Economics:

Dil Foods had a sales value of Rs. 7 crores in FY22-23, with projected sales of Rs. 30 crores in FY23-24 with a profit of Rs.2.2 crores. They have a CapEx investment worth Rs.3.5 crores. One of Dil Foods’ most popular dishes, Khadi Chawal, has sparked questions about its profitability.

When asked “What will the restaurant gain? Arpita, delved into the dish’s cost breakdown. Priced at Rs. 149, the restaurant receives Rs. 45 after sharing a portion with delivery platforms. Given a production cost of Rs. 45, this leaves a margin of Rs. 19 for Dil Foods. Understanding such individual dish margins helps optimize the menu and contribute to the company’s projected sales growth.

Arpita’s numbers in Unit economics were on point. The average cost of a product is Rs. 300. The restaurant’s margin is about 31%, packaging costs about 6%, Swiggy, and Zomato commission costs about 22%, marketing costs about 10.5%, logistics & and miscellaneous charges about 1%, chef’s salary about 1%, staff salary about 1%. The factories and utilities cost around 4.88% which leaves about 11.65% of EBITA (Earnings Before Interest, Taxes, and Amortization).

The Shark Tank ‘Ask’

Arpita’s initial ask was Rs. 50 lakhs for 0.5% equity. Vineetha Singh, Co-Founder & CEO of Sugar Cosmetics offered for her ask.

Ritesh Agarwal, CEO of OYO Rooms, and Radhika Gupta, CEO of Edelweiss Mutual Funds join Vineetha’s offer and revise it to Rs. 1 Crore for 1% equity or Rs. 1.5 crore for 1.5% equity.

Piyush Bansal, Co-founder and CEO of Lenskart joins the offer and revises it to Rs. 2 crores for 2% equity. Aman Gupta, Co-Founder and CEO of boAt backs off by stating too many cooks spoil the broth. The offer was revised to Rs. 2 crores for 2.67% by Vineetha, Ritesh, Radhika and Piyush. Arpita closed the deal with the offer. 

References:

https://www.sonyliv.com/shows/shark-tank-india-1500005489/dil-foods-pitch-1000262745

Dil foods – Bringing India to your plate