Gourmet growth

The growth of virtual restaurants in the southern cone.

Covid hit Latin America hard and during the height of the pandemic, people across the region turned to ordering food at home to pass the time when restrictions put the brakes on other forms of entertainment. This spurred innovation in the startup scene which capitalised on an opportunity to deliver high quality meals from local popular restaurants to homes. One of the most successful of these start-ups is Argentina-based Kitchenita. The venture was developed in 2019 and has raised over USD 3 million. The company is now looking to expand its presence in Peru, Chile and Mexico. Investors have included Argentina’s Flambeau Partners, Newtopia and American FJ Labs and Unpopular VC.

A partner in a technology investment firm explained, “Kitchenita’s success is in part attributable to investments in technology and really understanding their market. The innovation and quality of the final product – from quality packaging to competitive pricing – is what distinguishes these kinds of startups from the competition. Traditional restaurants have failed to catch up.”

“Kitchenita’s success is in part attributable to investments in technology and really understanding their market.”

Partner, technology investment firm, Argentina

The business is a mix of gastronomic, technological and logistical business, and consists of the sale via food delivery, with a great knowledge of the needs or tastes of consumers by area, with a focus on the way in which the products are delivered, with brands that are created (or taken off the market, if they don’t work) quickly based on the needs they verify. Kitchenita have also focused on sustainability – a buzzword in the virtual restaurant scene and important to their socially conscious customers. The company is now focused on offering several vegan options and ensuring that their packaging is ecologically friendly.

The company may seek to franchise as it grows its operations across Latin America. Manging growth in this way is easier said than done however, especially given the firm’s emphasis on local knowledge, not something that is always straightforward to replicate. The post-Covid world presents an altogether different challenge to revenue streams as more people choose to eat out. For now however, profit margins in Argentina, Chile and Colombia are healthy and further rounds of investment are on the horizon.

The partner explained, “There is no common rule for the entire region, and therefore it is difficult to speak of a competitive price point. Clearly, one of the goals that have been set is that in addition to the quality of the product, the packaging, and the speed of delivery, it is that the price is competitive. Right now, Kitchenita’s price point is around 10 and 20% below the average – they are competitive but for how long that kind of a price point can be sustained remains unclear. Indeed, in countries such as Argentina, with soaring inflation, the price reference is lost.”

“Clearly, one of the goals that have been set is that in addition to the quality of the product, the packaging, and the speed of delivery, it is that the price is competitive.”

Partner, technology investment firm, Argentina

Startups like Kitchenita cannot afford to sit on their laurels. They need to constantly innovate to survive and to grow. They could also function as a channel for awareness or education about the quality of the food we eat and even float product suggestions focused on each customer based on their own experience, etc. Right now, the industry’s key players have the right ingredients to diversify effectively,” added the partner.

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