The airplane slowly began to rumble down the runway. As we increased speed, the seats, tray tables, and belt buckles around me began to rattle.
Never a big fan of flying, I took a deep breath and tried to take comfort in the glimmering newness of the Air Asia cabin. The seats seemed new, the wall panels were spotless, and the overhead cabin was well-lit.
As the plane began to angle upward, I kept my eyes focused on the shiny white ceiling.
Suddenly, what appeared to be white smoke began pouring out from behind the luggage racks.
“What is that!” I blurted out through a clenched jaw.
After a few moments, I noticed that I wasn’t smelling smoke. It appeared to be a misting device, probably designed to give passengers the feeling they are breathing fresh air.
As my nerves gradually returned, I began to relax and enjoy the comfort of Air Asia’s two-hour flight to Singapore from Bangkok.
However, what I was really impressed with was the food.
It seems I’m not alone. A recent article in Skift suggests that Air Asia is opening a fast food restaurant called Santan to serve its inflight meals.
Santan means “coconut milk” in Malay. It looks like your single-serving meals in the skies over Southeast Asia will soon be available in a neighborhood near you.
Air Asia’s idea may not be as strange as it sounds.
The company’s use of a centralized food production system to expand its profit margins is part of a larger trend — people cooking less at home.
Outsourcing the Kitchen
Cooking food in your kitchen consumes a lot of resources. Factor in the amount of time it takes to go grocery shopping, to prepare the food, cook, and do the dishes, and eating at home begins to take a big chunk out of your day.
Food storage and preparation at home also leads to 30-40% of all store-bought food being wasted.
The world (and venture capital) is beginning to take notice. India’s startup food delivery service, Swiggy, recently raised $1B during a funding round in December.
This follows the growth of other food delivery startups like FoodPanda, UberEats, and Zomato — all of which are dependent upon a rapid scaling up of their business to achieve “economies of scale.”
Economies of Scale
According to economic theory, the more a company produces of an item the less it costs to produce each item.
This theory is known as “economies of scale.” It is computed by dividing your fixed costs by the number of items produced.
For example, in home economics, whether you are cooking for just yourself or for 20 people, you still need to shop, prepare, cook, and clean up. While cooking for 20 people will take longer, the cost per plate is significantly lower when performed in bulk.
Economies of scale is what is driving the current entrepreneurship boom in food delivery.
If a person at home is making $25 an hour and can save two hours a day of shopping, preparing, cooking, and cleaning up, then to get all three meals a day delivered to you under $50 is worth it.
The Automation Revolution
Robotics is about to further centralize food production and outsource the kitchen. From robotic chefs like Flippy, to self-driving cars that deploy an army of food delivery robots, robotics will continue to lower per unit food costs.
For Air Asia’s new fast food chain based on airplane meals, this could be good news — their compact spicy coconut dishes will be easier to deliver with robots.
But, my question is: If I have Air Asia’s food delivered, when will I get the thrill of seeing mist that looks like smoke?