The Corona Virus outbreak which led to a complete lockdown in March 2020 had severe financial consequences. Millions of people were stuck in their homes, without any means to go outside. With restaurants closed, takeout dinner was the only option which drastically accelerated the adoption of cloud/ virtual/ ghost kitchens in the F&B industry. A thing which started as a trend is now a reality.
Cloud kitchen does not have high-traffic locations, but a huge number of online customers with big delivery radius. The ever-growing technology and increased optionality, transparency, affordability, and convenience that the people experience with cloud kitchen model gives it a further edge over traditional brick-and-mortar restaurant kitchen. Predictions by RedSeer Management Consulting reveals that the cloud kitchens are set to be a $2 billion industry in India by 2024, up from $400 million in 2019. Also the market value of cloud kitchens is estimated to reach $1.05 billion by the end of 2023. With such high numbers and scope of development, food aggregators are extensively moving towards cloud kitchen to cash in.
Here are a few reasons why cloud kitchens are the future of the food industry.
Experiment with low risk: Launching a traditional restaurant requires a strong market capital, it’s a time-consuming process which involves high risk venture. But with cloud kitchens, which are not tied to a physical location, you get an advantage of cutting down unnecessary overhead costs which increases your profit margins. As compared to an expensive brick-and-mortar business model, Cloud kitchens can easily take advantage of on-demand labor and inexpensive location. As long as you can draw people on your website, there is no need to rent a space for dining or pay high rent for a prime location. No need to spend money on interior-exterior, decor, furniture, silverware or plates. With a cloud kitchen you only need to focus on the quality and safety of food delivery.
Increased visibility with less marketing spends: Cloud Kitchens can gain quick exposure through delivery apps, rather than having to market themselves. At Cloud Kitchens, each one comes equipped with the proprietary software to launch new menus & promotion featuring discounted menu. Also, with a digital model it’s easier to make changes and experiment with the menu since the entire menu is always online, you can launch an item or remove one depending on its demand.
Quick and efficient service: One big advantage of running delivery out of traditional brick-and-mortar restaurant is that high customer demand can be handled easily. With online delivery solution, you can centrally manage customer orders onto one single tablet. The more accurate your ETA with delivery, means more happy customers leaving better online ratings. Moreover, through online ordering system, it is easier to gather valuable information about your customers’ choices, preferences, and habits. With digital business model operating on apps, you can understand the pulse of your customers and save crucial data insights that helps you to determine your future courses of action and innovate new ways of attracting new clientele.
Managing your restaurant has become accessible even in tough times. Cloud kitchen certainly gives you an opportunity to build a successful restaurant concept with little capital. Looking further forward, with millennials & iGen demanding digital, mobile-friendly solutions, cloud kitchens will always have an edge over storefront restaurants.