The new normal has changed every industry, and the F&B (Food and Beverage) segment is not an exception. Thanks to social distancing, dining out is not an option anymore. Those who love eating out, unfortunately, have to make do with getting food delivered to their homes. This, of course, has led to an upsurge in the popularity of the concept of cloud kitchens. And the trend is not only here to stay but is all set to get bigger in the coming times.
Even before COVID-19 set in, commercial cooking facilities that lacked a physical dining space were already in. According to RedSeer Management Consulting, cloud kitchens are poised to cross the $2 billion mark by 2024.
As per a research survey conducted during the lockdown, 21% of the respondents said that they were likely to increase online food ordering after the restrictions were lifted, while only 9% would have wanted to visit restaurants more often. With businesses re-opening, these estimates are becoming a reality.
If you are planning to enter the restaurant segment or already run one, embracing a cloud kitchen seems to be the best move right now. However, before doing so, it is vital to understand the technology that keeps them up and running.
Remember, when it comes to cloud kitchens, the tech infrastructure is just as important as the products and services.
Let us first answer a few questions about cloud kitchens to cover some basics.
Essentially, a cloud kitchen refers to a delivery-only restaurant which does not offer a dine-in facility to the patrons. These are known as cloud kitchens as they depend on cloud services that leverage the Internet to take online orders.
More often than not, the food outlet functions from a small kitchen space without any investment in the dining space or restaurant. Businesses can save even more by sharing the same space with other catering services.
Starting up a cloud kitchen business in India is amazingly easy—both in terms of investment and effort, as it does not involve huge infrastructural costs. Instead, all you need is a basic cloud phone system and a kitchen space where you can cook quality food and deliver it to your consumers.
Considering the simplicity and minimal investment requirements of this business model, it becomes an attractive option for new entrepreneurs. At the same time, existing restaurants can easily switch to this model. This will help them counteract the impact of the pandemic and keep operations running while cutting down on various costs.
Pandemic or no pandemic, there is no doubt that cloud kitchens are a profitable business model for budding and established restaurateurs. Here are some reasons why you should consider them today and in the future as well.
This one is a no brainer. You need not buy or rent an expensive place in a prime location, so there are big savings in terms of real-estate cost. You can even start a business from home and expand to a commercial space as the business grows.
Additionally, you can save on wait staff, fancy interiors, and all regular maintenance work. Comparatively, cloud-based solutions cost only a fraction but let you start a full-fledged business.
With a cloud kitchen, scaling operations are simpler and quicker than you expect. Since the investment is smaller, you can open several outlets around the same time even with a limited budget.
Shared spaces and operator-managed kitchens play an important role in helping these businesses achieve scale. The model is ideal for a restaurant trying to enter new markets or expand operations as they only need a small space and can start operations without any delay and hassles.
Another reason why cloud kitchen is profitable is that it offers the ease of experimentation with multiple concepts without burning a hole in your pocket. You can run multiple brands or offer a range of cuisines from the same space while using the same resources.
To start a brand, you only need to get it listed among the food aggregators, and you are good to go. The best part is that the listing is free and you start getting orders right away. If the new brand or scheme does not match your expectations, you have the freedom to remove it from the food aggregator list.
There are several reasons why cloud kitchens are gaining popularity in India. Although services were temporarily shut down during the pandemic-induced lockdowns, these businesses are back with a bang.
And now, it’s food quality over the dining experience as people are more confident about staying indoors and avoiding any exposure. Moreover, the convenience of having food delivered quickly at a reasonable price right to your doorstep is unmatched.
At the end of the day, it is this convenience that working professionals look for, rather than having to cook themselves.
As the demand for cloud kitchens surge, they present a huge business opportunity for startups and even established brands. There are several online aggregators expanding operations across the Indian cities, and this has led to immense growth in the market size.
COVID-19 has also contributed to make cloud kitchens an in-demand business model, even for the restaurants that were flourishing in the pre-pandemic era. Hence, it is an opportunity that no business would want to miss.
Although you may want to capitalise on the cloud kitchen boom in the COVID era, doing so requires an initial infrastructural investment. Beyond a kitchen space to prepare the food and an aggregator collaboration to receive and deliver orders, you will also need some technology solutions in place.
Furthermore, you will require cloud-based solutions to get the operations going.
While your needs may vary depending on the size and scale of the business, a basic setup is a must. Everything boils down to collaborating with a reliable cloud service provider who is capable enough to address all the needs of your virtual kitchen.
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