Kuwait-Based KLC Virtual Restaurants Makes A Successful Entry Into Qatar Just As The Country Gets Set To Host FIFA World Cup 2022 With the opening of three virtual kitchens in 2022 already, and a fourth one slated for the first quarter of 2023, KLC Virtual Restaurants is on a mission to capitalize on an untapped online food delivery space in Qatar.
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Since establishing Kuwait-based multi-brand virtual restaurant company KLC Virtual Restaurants (KLC) in 2009, co-founder and CEO Mubarak Jaffar has been at the helm of opening 15 kitchens in Kuwait and four in the UAE. However, expanding his family-owned business into Qatar wasn't always meant to happen in the midst of the hustle and bustle of a FIFA World Cup.
In fact, it was actually a plan Jaffar had discussed with Abdulaziz Fakhroo, Partner at KLC Qatar, in as early as 2019. "But then the COVID-19 crisis hit, and, as you know, the lockdowns that we saw were very strict and it wasn't really the time to do an expansion across the GCC," Jaffar recalls. "So, we put the brakes on the expansion, and then met once again in January 2022. After that, we literally just went out and did it… it was a very aggressive and fast expansion."
That decision ultimately led to the opening of three virtual kitchens in Qatar's Muaither, Abu Hamour, and Umm Salal areas. And the results, so far, have exceeded the targets they'd set for themselves, says Jaffar. "We've only seen month on month growth since we've opened in Qatar," he says. "Because it's a very promising market, we feel that we can cover 80%-90% of Qatar with just four to five kitchens, operating the majority of our brands," he adds. "The competition is also nowhere close to what it is the UAE or Kuwait, and while the number of orders for online food delivery increased drastically in the last two to three years, it just continued to grow after the pandemic, So we feel our entry into the Qatari market was the right move"
And Fakhroo believes that these results are simply a tester for what is yet to come. "When we opened our first kitchen, the market response was incredible, and orders exceeded our expectations," he recalls. "So now, after opening our third kitchen, we are focused on building our team locally so we can accommodate what we perceive will be a successful period in November and December during the FIFA World Cup."
KLC has opened three virtual kitchens in Qatar's Muaither, Abu Hamour, and Umm Salal areas. Source: KLC
With one out of the three launched kitchens operational 24 hours a day, and the other two at 16 hours a day, all three locations currently average over 600 daily orders. "Each of these kitchens also has over 20 brands," Jaffar explains. "Hopefully within the next couple of weeks, all three kitchens will be operating 24 hours and at full capacity. The Abu Hamour unit is quite a central location, and the one that we feel will allow us to cater to all the demand that we're going to be hopefully seeing during the World Cup. We can do anywhere from 600 to 800 orders daily from that kitchen, so that's what we're preparing ourselves for. But we don't expect to be opening any new brands during the World Cup. We'll also be opening a fourth in a very promising location by the first quarter of 2023. This will allow us to cover the rest of the delivery hot zones in Qatar."
A point worth noting here is that although KLC's ultimate vision is to create food brands and cuisines that can be easily delivered to homes, takeaway services have become a key facet of its operations in Qatar. Fakhroo explains that the consumer landscape in the country demanded such an offering- one that KLC were able to oblige to with a seamless pivot. "We're very flexible in our approach and in entering any market," Fakhroo says. "As a Qatari myself, what I know differentiates Qatar from other markets is that we still have that takeaway environment- that is still culturally embedded in the people of this country. Which is why we decided to have that takeaway aspect within our kitchen. And so, we are situated in areas where we know there's going to be car traffic rather than foot traffic. A lot of people in Qatar drive around, because they enjoy going out in groups and families and so, adding this takeaway feature was a way for us to accommodate these different clienteles."Related: Beyond Excellence: Kuwait Airways CEO Maen Razouqi
At the forefront of this expansion journey is One Eatery- KLC's virtual food hall that can simultaneously offer multiple food brands at one avenue. As an umbrella company to over 80 brands that cover over 15 cuisines across its many locations, KLC is aiming to introduce many of these to the people of Qatar as well. Jaffar believes One Eatery, which houses 60 of KLC's brands, offers a one-stop-shop solution in that regard. "We've expanded the One Eatery concept across the GCC- first in Dubai and now in Qatar- simply because we need to have a face to our locations," he explains. "And this is because we do offer a bit of take-away and dine-in as well. So, we invested a lot of time in making our front of house location look pleasing and appealing to customers so they can also go and grab a bite. It's a very small, casual seating area, but it's an opportunity to tap into that market as well. So, when you enter One Eatery, you have the option to order from any of our brands. Moving forward we're going to be opening more One Eatery's!" Although all 60 brands that fall under One Eatery haven't been launched in Qatar yet, Jaffar assures that they will be introducing new brands every month. "Hopefully within the next three to six months we should have around anywhere from 40 to 50 brands operating in Qatar," he adds.
One Eatery is KLC's virtual food hall that can simultaneously offer multiple food brands at one avenue. Source: KLC
Despite the attention towards takeaway and dine-in services, KLC's essence lies primarily in online food delivery, emphasizes Fakhroo. "The brick-and-mortar business model of casual or fine dining is slowly fading in Qatar," Fakhroo says. "It also seems like only the quick service restaurants (QSRs) will survive. With the new generation and the technology they're using, we now find a big gap between fine dining and the QSRs- that's where the online delivery service is just growing exponentially. So, we want to tap into that market and that's why we see the growth that we're seeing so far from the past few months." And Jaffar maintains that their core value proposition of offering multiple cuisines continues to be the KLC brand's X factor. "I think that's one of the main reasons why we were able to, as a brand, succeed in a very short period of time and were able to see month on month growth in Qatar where we were doubling the numbers of orders and sales since launching" he says. "The biggest reason behind those results was that we were offering variety and gave customers the chance to order from cuisines that aren't available to them in certain areas 24 hours a day."
At this point of the interview, Jaffar makes it a point to highlight that KLC has trademarked all its food brands to ensure easy expansion across the GCC. He also proudly mentions that his enterprise has a studio based in Kuwait where they create, develop, and market these brands. "We do our own tastings- we have a team of culinary experts across different cuisines that do tastings for us throughout the year to ensure we deliver delicious and quality food to our customers," Jaffar explains. "So, there's a bit of a rigorous process involved, especially when we enter new cuisines- ones that we're not used to or we're not familiar with. Once we're happy and satisfied, we then develop a brand and introduce it within our cloud kitchens across the GCC in a very short period. So, this process shouldn't take more than three months if our team is dedicated towards building a brand. We do focus on niche brands, and niche cuisines, and that's really what makes KLC special. But we also have that flexibility to launch anything that's trending globally in a very short period."
Although KLC's ultimate vision is to create food brands and cuisines that can be easily delivered to homes, takeaway services have become a key facet of its operations in Qatar. Source: KLC
With such efficiency at their disposal, and with an expected rise in demand owing to the influx of tourists during the World Cup, it might have been easy for Jaffar and his team to get carried away with their success in Qatar. But biting off more than one can chew wasn't even an option for the KLC team, says Jaffar. "No matter what we do, I don't think we'll be able to cater to the demand that we see during the World Cup, and that's something that we are fully aware of." Jaffar says. "The target that we set for ourselves was to be ready prior to the World Cup, and we were able to achieve that. We're just getting started and we're seeing amazing growth month on month. But with the sheer number of people that are going to be coming in and out of Doha, we just don't want to take on more than what we can manage. We're just going to be building what we have, making sure that the quality of the food, the standards, and the operations, is on point." Opting for such a cautious route is an economically sound decision too, argues Jaffar. "Qatar has the highest average ticket [a metric that reflects the average amount of sales per customer] across the GCC," he says. "So each order's value is significantly higher than it is in the UAE, Kuwait and even KSA. Overall, when you look at unit economics, it makes much more sense- a smaller volume of sales in Qatar could potentially make more profit than elsewhere. That's what makes Qatar such a profitable market. It's a sustainable market, and that's why we're really doubling down on it."
At the heart of such a conservative approach, however, lies Jaffar's earnest attempt to continue KLC's legacy as a family business. "The way we've structured this business is that the majority of our team is also homegrown; they've been with us for more than 8-10 years," Jaffar says. "So, KLC is in their DNA! You have to understand, we've all built this together as a team and the success of this company is everybody's success. We are extremely proud to be a local Kuwaiti business that's expanded across the GCC. We believe we can operate in a sustainable manner while also competing with other regional players. At the end of the day, we see ourselves as a food business that is tech enabled. We don't want to risk growth at any cost. If we do, we can't guarantee the food quality that we can serve to our customers." And it is with such a mindset that the KLC team is gearing up for what it hopes will be a game changer for the industry. "I truly believe that the World Cup will cause a domino effect economically for the ecosystem here in Qatar, and it'll be beneficial to not only Qatar but also surrounding nations," Fakhroo says. "When most companies were investing elsewhere, we capitalized in a market that is not saturated in terms of cloud kitchens. As the first movers into this country, it gives us time to expand, learn and grow!"