José Guillermo Calderón is the CEO and co-founder of MUY, a cloud-kitchen startup based in Colombia, with 38 locations in Bogotá, three in Mexico City, and one soon to open in São Paulo.
It all started with the crepe carts
I’ve always loved food. When I was 13 years old, I started my first company with three crepe carts I would park at malls and events. I co-founded Domicilios in 2007 with the idea of making food delivery accessible and affordable in Latin America.
We had millions of users and a successful exit with Delivery Hero, but I still felt frustrated. Unlike in wealthier countries, where food delivery is commonplace, only a fraction of our users could routinely make orders. For them, food delivery was still a luxury. I realized that, if we didn’t change the basics of that, we were not going to have a massive company.
We IPO’d with Delivery Hero in 2017, and I began thinking about my next venture. I learned about cloud kitchens, which are commercial kitchens that produce food for delivery platforms. Some served as centralizers for apps; others bought up distressed real estate to build kitchens and rental space, or to create franchises. All these strategies relied on existing delivery platforms though, which can change prices and commissions at any time.
I was CEO and cofounder of a delivery platform for over a decade. I knew I could build a better product by combining the cloud-kitchen approach with technology and my experience in the market. That’s how MUY was born.
The key would be scale, tech integration, and good food. Our goal was to use the space efficiently while making the best possible product. MUY does that by merging cloud kitchens with traditional restaurants.
Plantains, pulled pork, and beef stroganoff
Say we have a location in a corporate area that gets busy during lunchtime. Sure, we could build a profitable business out of that. But we would have plenty of unused space on evenings and weekends.
Instead, MUY’s kitchen both serves in-person diners and fulfills delivery orders during the day. At night and on weekends, it becomes delivery-first.
More importantly, the kitchen isn’t producing only the lunch menu but also other items, like pizza, rotisserie chicken, and burritos, all sold under different brands for delivery. This way, during the daytime, we serve under the most popular brand in the area, while expanding to five other brands at night.
We change our menus based on city and country. In Bogotá, the bestseller is rice with red beans, ground beef, chicharrón (pork rinds), and plantains. In Mexico City, it’s cochinita pibil, pulled pork marinated in bitter orange juice. In São Paulo, where we are in trials, it’s been beef stroganoff.
Our operations are managed by 31 proprietary tech systems. They optimize every process to predict demand, production, and staffing, so we can host our five brands in a 60-square-meter (645-square-foot) kitchen and serve 500 meals per hour.
The optimization keeps food waste down. Most restaurants in Latin America throw out 25% of the food they produce. MUY is at 2.7%. It also keeps our costs low. Each meal costs 80 cents to produce, with a final price tag of $2.
Besides, we try to make the user experience in-store as simple and fast as possible. That’s how we developed the contactless-restaurant concept.
Then came the virus
Before Covid-19, about 80% of our business was on-site, not through delivery. And believe it or not, when we first opened, our biggest problem was that people in Latin America love to negotiate. They would order at the counter and try to bargain for more food. Obviously, we couldn’t have that, so we developed self-service kiosks where people could order with full access to the menu.
The demand grew to the point that there weren’t enough kiosks during rush hour. We then launched an app so people could enter their orders and come pick up their food.
To keep up with the app demand, we developed smart chef systems to manage supplies and orders. Finally, instead of having people wait around for their food, we experimented with putting the meals in lockers in one of our Bogotá locations. Customers would be notified when their food was ready to be picked up.
|Founders:||José Guillermo Calderón, Miguel McAllister|
|Monthly sales:||150,000 meals|
|Investment stage:||Series B|
|Investors:||Seaya Ventures, ALLVP, Palm Drive, 14W, Endeavor Catalyst|
We didn’t create this contactless model with Covid-19 in mind. It happened to be the best product. Other restaurants that tried the automated model weren’t building technology to solve a problem. They were just trying to do something cool — and expensive. Their stores could cost anywhere from $500,000 to $1 million. We’re doing it because it makes the most sense. We can open an automated restaurant for $120,000 and have the best throughput of customers.
The coronavirus didn’t impact our long-term vision, but when Colombia first locked down, and we had to shut our locations, I had the most difficult six months of my career. We had been growing at a rate of 800% year over year — and then everything stopped. Our sales dropped 95%.
Still, we kept moving in the same direction. The only change was to invest more in marketing for our delivery channels. Our sales ratios completely flipped. Now, delivery constitutes 80% of our business.
Colombia reopened in the second week of September. A few days later, we started having in-person dining at reduced capacity. Before Covid-19, we had a strong company driven by on-premise sales. Now, we have a strong company driven by off-premise sales.
In the meantime, our first contactless-restaurant opened in July in Bogotá. We’re hoping to have another location up and running in November. Of course, we still have some things to fix. We’re not even sure yet if it’s the best model. But we surely are learning faster than anyone else.