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Cloud Kitchen – The new restaurant trend?

Cloud Kitchens : How technology changed Restaurant Industry

 

The recent technology allows us to order food right from your Smartphone, the only solution to meet the ever uprising demand are Cloud Kitchens. It’s because Cloud Kitchens don’t require high rents or less margins. According to a report from RedSeer The online food ordering portals in India is growing at the rate of 15% every quarter.¬†With the ever increasing rents for restaurant, costs, cloud kitchen is the smarter way to run a restaurant.

People these days prefer eating at home rather than visiting a restaurant by venturing into traffic filled roads. The comfort of eating food at home is always a step ahead than visiting a restaurant for dining in. ( Atleast according to me ūüėõ ) Not just that, these online food ordering portals also provide us with bunch of offers often which makes us (the end customers) to prefer delivery through these online food portals over dining in as the same food is available for cheaper and is delivered to your footstep.

Cloud Kitchen is actually a thing in India because the old age restaurants & existing restaurants are investing into cloud kitchens in the areas where there are enough orders and demand to run the business. There has been one such case in Chennai, India in a restaurant called Yaa Mohideen who opened multiple cloud kitchens just to deliver to their online food delivery portal UberEats.


What is a Cloud Kitchen?

A¬†Cloud Kitchen¬†is a restaurant that is designed solely for the purpose to fulfill the online delivery orders from Swiggy, Zomato, UberEats, FoodPanda & more (Indian online food delivery portals)¬† and doesn’t have a dine-in option. Even if it has a dine in option, that won’t be bigger than a 2 to 4 seater restaurant as their main focus is to accept incoming orders only.

What is the concept cloud Kitchens?

Imagine Amazon or Flipkart to order food. That’s how.

Cloud Kitchens can run their own website to accept orders. It can be a website or an app for the cloud kitchen or anything that acts as a medium to reach out to people. The revenue for these Virtual Restaurants is through the Online Food Ordering Portals such as Swiggy, Zomato, UberEats, FoodPanda & more (India) ; UberEats , Deliveroo (Outside India).

The Cloud Kitchen functions in Hub & Spoke model where in the Cloud Kitchen/ Virtual Kitchen/ Ghost Kitchen/ Dark Kitchen would be managing the Kitchen centrally being the hub and the delivery options like Swiggy, Zomato, UberEats, FoodPanda would be the spoke where the remaining cooking is done or the final delivery is made.

hub-spoke-model-cloud-kitchensCloud Kitchen Image source: BMT MICRO

 

Advantages of Cloud Kitchens :

Huge initial savings РThe real estate price for any given business is high no matter what. Agreed? Especially considering the most important factor for any restaurant being Location. Whereas Cloud Kitchens can fit anywhere considering the FSSAI standards are met.

Focused goals – In Cloud Kitchens, there are no tension such as customer interaction. Thereby with Cloud Kitchen you get the complete freedom to concentrate on one task, i.e making great food and delivering it on time.

Higher margins РWith Cloud Kitchen business model, you can set higher margins considering the delivery charges are accounted. Higher Margins can be achieved with Cloud Kitchens because there are lots of cost cutting that place that takes place like infrastructural & operational cost which sucks away most of the profit. Whereas in Cloud Kitchen, those cost can be avoided.

Easier expansion – The online world driven Cloud Kitchen can be expanded with just a simple message or an email to the concern customers or notification via app is more than sufficient for such virtual restaurants. The same process for a classic dine in restaurant would have been right opposite since there should be aggressive & huge investments for marketing them.


Reason for Popularity behind Cloud Kitchens :

The reason behind the popularity behind Cloud Kitchens is because of the increasing orders in the online food ordering portals. Not just that, the online food delivering industry has been increasing at a pace of 15% every quarter which kickstarted the food industry startup. Considering the Cloud Kitchen concept doesn’t require much risk & funds required as much as a classic dine in restaurant.

Moreover, Q4 of 2016 had a market reach of Rs.30 Crore for the online food ordering industry which was a 130% growth from the Q4 of the previous year. This has also been an opportunity for the billing solution providing companies to market their Cloud Kitchen Restaurant POS .

Recently, Uber’s CEO Travis Kalanicks¬†also said he will be starting to setup an investment fund called 10100¬†whichwill be pronounced as¬†Ten One Hundred¬†which will fund potential companies in India and China. Considering Uber has already started few “City Storage Systems”¬†which are kitchens inside Containers to create an assembly of Cloud Kitchens in neglected strip malls and parking lots.

 

 

 

They also say that, “We provide infrastructure and software that enables food operators to open delivery-only locations with minimal capital expenditure and time”. Not just that, they have also opened a new website¬†cloudkitchens.com¬†for investing in them. Recent reports from ReCode suggests that former Uber CEO is investing $150 million into City Storage Systems.


Cloud Kitchen FAQs :

Are there Cloud Kitchens in India?

Yes there are plenty of them considering the recent uprise in the online food ordering portals.
Here are some Cloud Kitchens –
Inner Chef, Deliveroo Editions, Eatongo
Here are some of the Cloud Kitchens in India –
Faasos, Box8, Red Box, Fresh Menu, Spoonjoy, Yumist.

Is Cloud Kitchen future proof?

The Cloud Kitchen model doesn’t require much up-front cost compared to a classic dine-in restaurant & takeaway restaurant. This can be an opportunity for the budding restaurateurs to use this opportunity to test out whether their brand is working out or not in a less risky environment.

What are the different names for Cloud Kitchen?

Cloud Kitchen is also known as Virtual Kitchen,  Dark Kitchen, Ghost Kitchen.


Know more about Cloud Kitchens by following my Quora
Read Aksara's answer to What is the concept of cloud kitchen? on Quora

    1. Admin November 10, 2018
    2. KS chowdary November 13, 2018

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