Daniela Izquierdo, Foodology | Building Brands and Digitising Restaurants [Ep. 42]

The audio and video are in Spanish. These notes are a translation.

The restaurant industry in Latin America is very competitive. We all know some restaurant, even one with very good food, that closed a few months after opening its doors. It is not only a business with a highly complex operation and administration, but launching the right food brand in the right place and at the right moment is very difficult, and it has more art than science to it. Without a doubt, it is one of the hardest challenges in the business world, and a challenge that today’s guest, Daniela Izquierdo, dared to take on when she founded Foodology.

Foodology is a startup that creates and operates virtual restaurant brands focused on delivery, using technology and data to make a highly scalable and less risky business. To date, it has opened more than 30 hidden kitchens, in 8 cities across Latin America, and has raised more than 20 million dollars from investors such as Base 10 Partners, Jaguar Ventures, Kayyak Ventures, and Andreeseen Horowitz, one of the most important venture capital funds in the world.

Daniela told us about her creative and research process for creating a restaurant brand, and how they are using technology to create kitchens that produce up to 8 times more than a traditional restaurant. This episode is a perfect example of how an entrepreneur can create disruptive proposals with technology and a deep knowledge of the structure and competitive dynamics of her industry.

What You Can Learn Today

Opportunities for technology solutions in the restaurant industry
Brand creation process
Acquisition channel strategies

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Youtube Timestamps*

Restaurant Digitization

[1:48] - How did Daniela arrive at the world of startups?
- Love of cooking
- Traditional career in investment banking and consulting
- MBA at Harvard and the discovery of the opportunity
[3:45] - What is Foodology?
- Operating platform for scaling restaurant brands
- Creation and operation of virtual brands
- 1 million orders so far in 30 kitchens with 7 brands
[5:27] - Competitive landscape, existing models, and what makes Foodology disruptive in this market
- Many different business models
- Investors’ lack of knowledge of the sector
- Virtual kitchens: Cloud kitchens, Kitchen as a Service, Virtual restaurants
- Dark kitchens’ focus on entrepreneurs without a technology team or a kitchen design team
[10:18] - Which operational areas of a restaurant offer the greatest opportunity to generate efficiencies with technology?
- Few changes in how technology is used, how operations are run, and how the consumer is thought about
- Design of the delivery experience
- Technology and data to improve every part of the value chain
[13:15] - What percentage cost savings are achievable with technology?
- Increasing kitchen output
- Optimizing processes
[15:23] - How is Foodology rethinking a restaurant’s operational areas, and how does this let it build a highly scalable and profitable business versus a traditional restaurant?
- Reasons traditional restaurants go bankrupt
- Technology for experimenting and iterating
- Expected death of the brands created
- Importance of technology for optimizing and scaling
- The poke bowls case

Foodology’s Brand Creation

[18:50] - Foodology’s brand creation process, from the idea and research through validation before launch
- Data analysis to determine which need to meet
- Global trends
- MVP of recipes and products
- Creation of a ghost brand for experimentation and learning
- Launch of a validated brand
[23:05] - Scaling the team’s creativity to create powerful brands as they move into other countries with different foods and cultures
- Complementarity between the operations, branding, and creation teams
[24:30] - What are the biggest risks new restaurants face, and what does Foodology do differently to reduce them?
- Too much passion versus a focus on data
- High investment and risk in the industry with physical service
- Scalability thanks to being virtual
- Foodology as the McDonald’s of every trend

Foodology’s Customer Acquisition and Retention Channels

[29:20] - Through which channels does Foodology acquire customers, and what role do the apps play?
- Owned channels and channels through apps
- Improving visibility inside the apps
- Social networks and influencers
- A brand with a strong presence no matter the channel
[33:34] - Balance between a channel’s potential (such as apps) and the risk of dependence
- Convenience of the apps for new brands
- Progressive improvement of value through owned channels
[35:45] - How do they measure whether exposure is enough to become independent of non-owned channels?
- The public’s interaction with the brand outside the apps
- The Brunch & Munch brand case
[37:08] - How Foodology’s brands behave by country
- Brands with international potential and global trends
- Adaptation of each brand by country
[39:09] - How does Daniela see the trend of moving away from marketplaces and, from the start, focusing on direct channels?
- A healthy balance between channels
- Multiple channels to give customers greater convenience

Tweet Round

[40:44] -
- Recommended book: Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice, by Bill Browder
- Changes in Latin America’s startup ecosystem: greater diversity in the gender and background of entrepreneurs
- Founders to interview: Brynne McNulty Rojas, of Habi, and Maria Echeverri Gomez, of Muni Tienda

Episode Mentions

You can follow Daniela on LinkedIn.

Founders to interview: Brynne McNulty Rojas, of Habi, and Maria Echeverri Gomez, of Muni Tienda

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