Zomato Ltd.'s recently introduced 'Food Rescue' initiative may have good intentions, but it is fraught with higher risks than rewards, say restaurateurs, expressing reluctance to participate at this stage.
Originally launched as a mandatory policy in September, 'Food Rescue' faced pushback from several restaurants, prompting a rollback. Following this, the online food delivery platform revised the contentious terms and re-introduced 'Food Rescue' as a voluntary initiative on Nov. 11. Yet, the revamped program failed to convince restaurateurs. They are concerned about potential damage to brand loyalty, as there is no assurance that food quality will be maintained throughout the process.
"We like the idea, but we would not sign up for this initiative unless the aggregator shares SOP's [Standard Operating Procedure] on the processes, more minute details and can guarantee that the quality of food remains safe in this entire process," said WOW! Momo Co-Founder and Chief Executive Officer, Sagar Daryani, calling for a "more collaborative approach" on such initiatives.
"Food Rescue complicates a simple problem", according to Pranav Rungta, who runs restaurant chains like Tamak and Nksha, as well as cloud kitchens — Curry Me Up & Chow Me Up — in Mumbai.
"We believe the earlier policy of cancelled food being returned to the restaurant was better, as the current model carries higher risks than rewards, potentially harming a restaurant's reputation. For instance, a customer might end up ordering something they didn't intend to, simply because it was discounted," he said, adding, "I will definitely not sign up nor rescue the food as a customer."
The Food Rescue initiative, recently announced by Zomato CEO Deepinder Goyal on Twitter, allows customers located along the route of a cancelled order to purchase the food at a substantial discount in its original, untampered packaging. Goyal claims that the company experiences over four lakh cancelled orders each month despite having a no-refund policy for cancellations. He argues that these cancellations result in significant waste, and their initiative could help mitigate this alarming statistic.
We don't encourage order cancellation at Zomato, because it leads to a tremendous amount of food wastage.
Inspite of stringent policies, and and a no-refund policy for cancellations, more than 4 lakh perfectly good orders get canceled on Zomato, for various reasons by customers.… pic.twitter.com/fGFQQNgzGJExplaining in detail how the initiative works for customers, the company stated that customers located within a 3-km radius of a delivery partner carrying a canceled order will be able to see the available items on their app's home screen, offering them the chance to "rescue" the order at a reduced price. This listing will be visible for only a few minutes to ensure the order's freshness. However, orders containing temperature-sensitive items such as ice creams, smoothies, or any other products that may deteriorate in quality during transit will not be included in this program.
"Though we encounter very few cancellations, we're excited about the new initiative that aims to ensure zero wastage," said Biraja Rout, founder of Biggies Burger. However, he said he would consider signing up for it only after assessing market traction from competitors with higher waste rates.
Rout's only concern is that this initiative should not turn into a gimmick, with eateries adopting it just to boost revenue, creating a superficial market trend.
In its initial proposal, Zomato implemented a 'nominal relisting enablement fee' for these orders, varying between Rs 50 and Rs 250 based on the value of the item. This time around, Zomato said that any payment from new customers claiming a rescued order will be divided between the original customer (if prepaid) and the restaurant, while Zomato itself takes no proceeds beyond necessary taxes. Restaurants will be compensated for the original order and delivery partners are fully paid for both the initial pickup and any redelivery required, ensuring no loss in their earnings.
Yet, many restaurants remain unconvinced.
"Ultimately, I'm selling my brand, and not a 'Zomato' product so it's crucial for me to ensure that my customers receive fresh item, no matter where they place their order," said a restaurant owner in Noida, requesting anonymity as half of their online business relies on third-party aggregators.
NDTV Profit spoke to at least 10 restaurateurs, who either operate large chains or manage a house of brands, and the consensus has been that the aggregator needs to build confidence in restaurant partners. Some even saw this as a “greenwashing” practice in the name of sustainability.
"Zomato or any company for that matter is no Good Samaritan," rued a Chennai-based restaurateur. "We've very low cancellation rate, so I'd rather manage these cancelled orders on my own than rely on an aggregator. These platforms promise exposure and convenience, but when things go awry, they leave us high and dry," the aggrieved restaurateur said.
The apprehension among restaurateurs also stems from fears that participating in the initiative may attract regulatory scrutiny for potential contamination. The Food Safety and Standards Authority of India mandates strict guidelines for food safety, and violations could result in licenses being cancelled.
In a recent meeting with online platforms, the regulator directed companies like Swiggy and Zomato to conduct proper training for the riders, empowering them with knowledge of food safety and hygiene protocols. Restaurateurs worry that, by signing up for this initiative, they could face penalties as they are voluntarily participating in it when the current plan allows them the option to opt out.
"We want to help, but it's not that simple," says a restaurateur who operates a mid-sized biryani chain in Delhi. "The risk of contamination outweighs the benefits. Consumers are already voicing concerns on social media about potential abuses in the system. If our food reaches customers in a stale condition and they complain, we risk losing our license."
A United Nations Food Waste Index Report estimates that India wastes 78.2 million tonnes of food each year despite the country housing the world's largest hunger-population.
While 60% of food waste occurs in households, equivalent to a whopping 55 kg of food wasted per person per year, food services are responsible for 28% of food waste.
As the conversation around food waste intensifies, the challenge ahead is whether Zomato can persuade the hesitant restaurateurs to embrace a change. In a blogspot, Zomato shared, "we are heartened to see that 99.9% of our restaurant partners want to be a part of this initiative."
In reality, however, the plate remains half full as restaurateurs weigh their options.
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