Some investment funds and venture capitalists have started to approach prestigious leaders, like Dani García, because they see a huge business opportunity that goes far beyond the pandemic crisis.
Iván Salvadó, CEO of catering consultancy Green Stone, recognizes that the market is changing. Before, he warns, The investors who approached the big bosses were either small (many were individuals, not businesses) or family members. In addition, they focused more on the power of the chic chef brand than on their ability to manage the business and the budget … and the results were, to say the least, perfectible.
Investors now demand profitability … and not just genius
A recent example: in 2018, Dabiz Muñoz was forced to buy from them, due to differences in their short-term profitability objectives, nearly four million euros of shares from the investors who accompanied him in the opening. of his London company StreetXo. Among them, still in a personal capacity, stood out the NBA player José Manuel Calderón and the directors of Publicis, Clifford Chance, the venture capital entity Bain and the investment fund platform Allfunds Bank.
Today, according to Salvadó, things have started to change, as institutional investors with generous pockets such as Kfund have started to invest their money in companies such as La Gran Familia Mediterránea, Dani’s food delivery platform. García or “delivery”. And they have, according to him, taking into account, and well before launching into the flour, the experience and the trajectory of the cooks and their projects and the need to obtain yields “never below 10%”.
The Great Mediterranean Family, under study
Iñaki Arrola, founder of Coches.com and CEO of Kfund, acknowledges that “the way Dani García and his team control costs while providing good food” was a fundamental point in getting them interested in his project.
Another key aspect, for Arrola, was the commitment, to La Gran Familia Mediterránea (LGFM), for the calls “virtual kitchens”, which are places where only delivery is served and in which an accessible rental must be associated with a location close to the end customer. These kitchens, he says, “give you a lot of flexibility to try out new gourmet formulas and scale them up or remove them quickly if they don’t succeed.” There are even digital profitability calculators for business models based on virtual kitchens.
The cuisine: good, beautiful and ready to eat in less than half an hour
For Kfund to invest in it, admits his manager, the customer experience and the marketing strategy had to be promising. In other words, they had to show them that “the food would arrive very quickly, in less than half an hour, from ordering online” and that the presentation was not only “very neat with good packaging” , but also “perfectly suited to all the advantages and all the disadvantages of a home delivery that no longer depends on you, but on an application [como JustEat o Glovo] where your department can receive good treatment, but not special treatment ”.
On the other hand, he warns, “the effort they make in digital marketing at La Gran Familia Mediterránea helps them position their product well… and this is very important in an environment with so much competition”. Shortly after the phone interview, Arrola sends an email with LGFM’s latest Twitter status and this comment: “What makes you want to order food at home with this presentation and that pint of kibble?
This Tuesday they are playing 13 croquettes pic.twitter.com/HbniR3mi7U
– The Great Mediterranean Family (@LaGranFamiliaDG) April 13, 2021
The competition, of course, is ravenous. So far this year, JustEat has integrated three home delivery lines linked to Martín Berasategui, the Spanish chef with the most Michelin stars, in Barcelona (En Casa con Martín, Fonda España Origen and Alaire Take Away). In addition, he started working with other award-winning chefs such as María Gómez (from Restaurant Magoga) and Romain Fornell and Víctor Quintillà (from Bar Verat).
Eva Ballarín, expert and consultant in catering companies, recalls that for brands and experiences designed for delivery, which usually depend on virtual kitchens, “having a familiar face in front of him allows him to position himself much more quickly in the mind of the consumer … [porque]… The final product is associated with the prestige of the cook “.
Great change in consumption habits
The latest published data from the JustEat report, corresponding to the months of March, April, May and June of last year, not only shows the logical increase in companies that have registered, but also the meteoric expansion of its proportion of customers. over 44 years old and therefore less inclined than young people to “battle” cooking.
In fact, Mediterranean cuisine continued to gain popularity after its orders increased 53% in 2019 and that other “healthy” options such as vegan and Hawaiian (very marked by the PoKe salad, made with marinated fish, rice, avocado, carrots, cucumber, sesame, marinated chives and grilled seaweed) would have catapulted respectively 221% and 95%.
Iñaki Arrola, from Kfund, recognizes, in this sense, that “the pandemic has taught us to customers that we can eat well with food at home and that we do not always resort to hamburgers, pizza or kebab “. At the same time, “what she taught us as investors is that delivery is not viable only when it is volume-based (lots of orders and very little margin)”.
Thousands of customers are willing to pay more to eat better
What’s up, he points out, “There are also a lot of customers willing to pay a little more and give us a bigger margin in exchange for a different experience. And this is where his proposal comes into play: gastronomic and Mediterranean cuisine (that of La Gran Familia Mediterránea) associated with a prestigious chef (Dani García) with attractive packaging and reduced delivery times (less than a half an hour) thanks to the location and efficiency of the virtual kitchens and the speed of the Glovo or JustEat delivery staff.
For Eva Ballarín, “the increase in demand has generated the opportunity to create more supply for the market”. We will see, according to her, “platforms of all kinds, with many different types of offers and targeting many different segments and times of consumption: thematic platforms of a specific cuisine, other more multi-offers or others under a brand. umbrella that helps them position themselves ”.
The chef with the most Michelin stars in Spain, Martín Berasategui, eats a burger.
What if the geniuses didn’t want to make “fast food”?
The second big change that the funds have detected is happening, as we have said, because of the view that cooks have of themselves. Until now, It was common for award-winning chefs to give Michelin stars a much higher priority than profit margins (they were more artists – or Olympians – than businessmen) and view home delivery orders with suspicion. .
One of the reasons is mentioned by Eva Ballarín when she says that “To have a niche in the sector, gastronomy in delivery format will be fast food or it will not”. “Any operator,” he continues, “regardless of the type of food he serves, if he wants to compete in traditional delivery, he must operate in a fast food format, since he will have 20 minutes to receive the order, prepare it and deliver it to the customer. ”.
Another reason for this mistrust was probably that they needed to cede control of a significant part of their brands and activities to managers who had nothing to do with haute cuisine. An example: the new CEO of La Gran Familia Mediterránea, Sandra Manresa, joined at the end of April from Google, where she specialized for seven years in digital transformation processes, omnichannel, e-commerce and creation of digital brands on platforms such as YouTube. .
Fear: what if we failed like Ferran Adrià with Fast Good in 2008?
It has also influenced the resistance of the great chefs who, until now, very few thought it made sense for a minority “culinary genius” to engage in mass business. It was not easy to forget the failure in 2008 of Fast Good, the channel run by Ferran Adrià with the muscle of NH Hoteles.
Galactic cooks find a way to land
The great chefs knew that the management of an award-winning restaurant and that of a more or less fast-paced restaurant chain is not linked. Also, they might feel dizzy by endorsing its name or image, intimately associated with luxury, innovation or the consumer experience in a privileged environment… the equivalent of excellent — and rudimentary — porcini mushroom croquettes.
And this is where the label of “gourmet cuisine”, which they have assumed for their home ordering adventures, and the physical separation of their luxury businesses (starred establishments) and those of delivery (virtual kitchens). have helped take the plunge. They think they can avoid confusing customers and uncomfortable (and a little absurd in this case) questions like “Why are they asking me 200 euros in a restaurant when I can pay twenty euros if they take it to their place? me ?”
The pandemic crisis has also prompted chefs to change their minds, forcing the closure of many high-end restaurants (some with Michelin stars like Eneko Bilbao, Cobo Vintage, Zaranda, 99 KO Sushi Bar, Punto MX, El Rodat), that they were already financially vulnerable due to their margins, and forcing diversification towards the delivery of the hotel industry in general and also of the great chefs to save their businesses (very damaged by capacity limits, the collapse of tourism and the economic uncertainty of their hosts).
Investment funds and venture capitalists know they have before them a unique opportunity with the best Spanish chefs. It remains to be seen how many of them will be able (and will want) to benefit from it.