Mubarak Jaffar

When Mubarak Jaffar, Co-Founder and CEO, first started KLC Virtual Restaurants in 2012, it was extremely challenging to find a prime location in Kuwait. This led them to assess if delivery-only brands had potential. 10 years and 80 brands later, their model has been proved successful all by leveraging their operational architecture.

Back then, things were significantly different. The F&B sector was brimming mostly with quick-service and fast-food establishments, and online food delivery was not what it is today.

“People were still placing orders via hotline, with many businesses transitioning from offline to online,” Mubarak chips in.

He shares that although the market had shifted from franchise brands to local concepts around 2012–13, it was not until 2013–15 when they started seeing a new wave of Kuwaiti entrepreneurs.

“They started setting up their own restaurants. They weren’t necessarily going for the prime locations; instead, they were choosing those that were considered less desirable by some of the bigger brands,” he tells us.

The rising number of food establishments propelled a new delivery-only ecosystem that is, in turn, driving the increase in orders generated per day today. However, Mubarak points out that although there has been an upshot in terms of market entrants, the market itself remains saturated.

“But despite the growth in people entering the F&B sector, the delivery and dining spaces became quite saturated. We saw a lot of people enter other platforms and invest in building their delivery network. What we realized is the restaurants that weren’t delivering at the time didn’t have a delivery fleet. So, they started resorting to aggregators and everyone started delivering, causing a huge shift in the market,” he shares.

Mubarak tells us there was a period between 2014–17 when the market demand exceeded the supply, but that is not the case today as more establishments have come up.

“In the last 5–6 years, we’ve had so many different destinations open doors to customers. Naturally, when a new destination opens, customers shift. 

This also applies to delivery. The more restaurants that deliver to you, the more options you will have and the less likely you will be to order from the same restaurant,” he says, talking about the present market situation.

KLC prides itself on having a culture that fosters talent from within, with the majority of the team having an average tenure of more than 8 years. “At the end of the day, we are trying to grow our team from within as opposed to hiring from the market,” he adds.

During the pandemic, labor, food, and packaging costs skyrocketed, along with other costs, resulting in a labor shortage in the market. KLC was able to overcome these challenges because of their long-term focus on employee retention, which compoundly reduced the negative effects of the market’s labor shortage.

He acknowledges that while most establishments are aware of these pertinent challenges, they really need to identify ways to work around them even if it means slowing down their expectations and growth as a business.

What drove Mubarak towards cloud kitchens is the realization that both locations and brands have life cycles. He shares that every time a new destination opened, the number of consumers going to their establishment(s) in person reduced by 50–60%, leaving them dependent on delivery.

“We had to look at cloud kitchens and understand if they would work for us. We moved from having 3–4 brands to 80, leveraging our infrastructure, and achieved this feat in about 10 years,” he says.

Mubarak clarifies that the main purpose of having cloud kitchen-based models is to maximize the kitchen’s efficiency and create room for more virtual brands.

He says, “We look at it on a kitchen level. We started introducing brands to our kitchens to make them more efficient. In the process, we realized it helps improve the kitchens’ overall performance. 

So, we try to figure out how many orders we can generate from one kitchen, and introduce the correct mix of brands to maximize orders.”

Advocating the adoption of cloud kitchens further, he tells us, “A cloud kitchen doesn’t have to be a certain size — it could be 20 square meters or even 250 square meters.”

As the leader of a profitable homegrown company with 500+ employees achieving over 6000+ orders a day across Kuwait, the UAE and Qatar, Mubarak suggests that the region’s climatic conditions, inclination towards convenience, and high spending power are among the biggest factors that uphold the delivery-based business models in the F&B industry.

“We’ve been investing in this business since day one and we’ve had many ups and downs. But what we realized is, this model works for us given how we use virtual brands and cloud kitchens.”

“Sustainability is a global trend that’s happening across the world,” says Mubarak. He adds that irrespective of whether there are government initiatives or not, customers are extremely aware of it and want to know what your organization’s stance on it is.

Speaking about some of the sustainability-based measures his organization is taking, he says, “One of the initiatives we are focusing on is reducing our carbon footprint. 

We replaced single-use plastics where possible and shifted to eco-friendly packaging. We are also trying to encourage our consumers to drive such measures by incorporating responsible messaging in our packaging.”

He also shares that sustainability is one of the main drivers behind their adoption of cloud kitchens.

“One of the reasons behind why we adopted cloud kitchens was reducing food waste and becoming more efficient,” he says. Mubarak explains that if a single kitchen has multiple brands, i.e., they share similar SKUs, it will naturally contribute to a reduction in food waste. Sharing an example from his own experience, he says, “Food wastage is a major issue that many restaurants face and we did too. 

This was because we would bring a certain quantity of ingredients and a big portion of it would go unused. It was pitiful to see huge amounts of food go to waste.”

“We realized that having a multi-brand cloud kitchen would allow us to use similar ingredients and help minimize our food waste. That’s why we started adding items that use similar ingredients to our menu. 

This way we ensured our offerings were fresh and didn’t have a big batch of food and (or) ingredients that was left as waste or went unsold,” he adds.

Mubarak acknowledges the importance of understanding the psychology behind what people are ordering now and what they want in the future as it enables him to create the supply and, subsequently, meet the demand. 

Pointing at the shift in what the consumers are ordering, he says, “What we realized is, earlier, most of the orders in Kuwait were related to burgers, fries, etc. Now, we are seeing them order more niche items from untapped cuisines.” 

He shares that after setting up his organization’s infrastructure and cloud features across three countries, their goal has been to identify food trends on a global, regional, and country level to create a pipeline of dishes and brands that address the consumer needs emerging from those trends.

“I think there are a lot of trends, and technology is helping us tap into different markets. It’s playing a huge role across the GCC region in driving advancements in the online food delivery ecosystem. 

We are seeing similar food-based businesses being set up to cater to delivery-only restaurants and cloud kitchens, to help streamline marketing functions, and even to provide inventory solutions, point-of-sale (POS) solutions, and payment systems, among other things — all of which are helping improve the GCC F&B landscape,” he adds.

He explains, “Today, we are seeing huge leaps in terms of technology. The aggregators are making it easier to track orders, access dashboards, and are providing many other tools which were not available before.” His being a data-driven organization, Mubarak tells us that they take the information, look at the touch points, and put everything together on their dashboards to identify any trends and patterns in the way people order.

Today, food establishments are striving to create the same experience that one would get in a restaurant when they order online. An example of this is the click-and-choose feature that helps people tailor their orders based on portion size and add-ons, among other things.

“We noticed a rising desire for customization, which we catered to by providing customers with the ability to remove or add ingredients to their favorite items. Five to six years ago, this would not have been the case and people were ordering an item exactly as it was presented by the restaurant,” says Mubarak.

“When you eat at a restaurant, the portions are created for dine-in customers. When you translate that portion for delivery, it’s likely a big portion and you might have to pay more than you would want to. 

That’s why restaurants are considering customizing the food delivery experience for customers instead of replicating and giving them what they would ideally get in a dine-in scenario. This, in my opinion, affects everything — the food cost, the selling price, etc.,” he concludes.