In the fast-paced lifestyle of today, people don’t prefer to invest time in going out to buy things. With the digitization of numerous services, people mostly depend on online services for buying the commodities they want. Food is no exception. More and more consumers are relying on online food delivery services for satisfying their cravings quickly. This has consequently encouraged food entrepreneurs to adopt an online food-delivery oriented system of selling food. Cloud kitchen is such a new age concept of food production and delivery.
Cloud kitchens are commercial food production units where delivery-based menu items are prepared for sale. The most unique feature of a cloud kitchen is that it doesn’t have any permanent physical existence for the customers. Cloud kitchens are only visible online through various partner food delivery apps. Through apps like Swiggy and Zomato, customer reach is widened. This unique concept of food preparation and service is still gaining popularity. A thorough overview of how a cloud kitchen works will be helpful to understand why such a restaurant concept is beneficial and is being opted for by multiple food brands.
The cloud kitchen concept emerged from food truck delivery services. With emerging technologies, the food truck business started gaining momentum, and people initially started ordering food through digital channels. Soon many companies with only food delivery service started operating their cloud kitchens.
How do cloud kitchens work?
Cloud kitchen is a licensed commercial kitchen set-up where one or multiple food brands can rent spaces for preparing food and delivering to consumers through delivery agents. These can also be termed virtual restaurants. One restaurant owner can run multiple food brands operating in one cloud kitchen. On the other hand, one cloud kitchen may be owned and shared by several virtual restaurant owners. Food vendors can take a cloud kitchen on rent for starting their food business at low-cost investment. Several fully equipped kitchen stations are installed in a cloud kitchen where each virtual restaurant takes separate orders through online food delivery apps from consumers. Cloud kitchens take advantage of the delivery history of food delivery apps to identify the demands for various dishes in particular neighborhoods and prepare menus accordingly. The type and method of operation of a cloud kitchen have evolved majorly over the years.
Types of cloud kitchen business models
The concept of cloud kitchen is still new to many. The cloud kitchen model has developed and changed its form over time to make services convenient for end consumers and food producers. Some of the cloud kitchen business models are explained below.
Restaurants linked with delivery brands
With the increased popularity of taking away and online orders, restaurants are showing greater interest in linking up with online food delivery brands. It helps restaurants scale up their business through an increased number of online orders. They can make optimum use of the ingredients, in-house kitchen staff, and physical storage space for delivery of more and more orders. However, the frequent presence of delivery agents at the restaurant waiting to pick up orders can be disturbing for the diners. This model is the first version of cloud kitchen, which has evolved hugely to come into existence in more convenient forms.
Take away and delivery
Take away are small food joints that are built in strategic locations and take orders from customers. Once the order is prepared, the customer can take their food on their own from the respective restaurant and savor the same outside or at home. However, with the emergence of technologies, take away joints are now operating as cloud kitchens too. They can provide online delivery services after partnering with food delivery services. Besides, many food delivery services are also allowing takeaway restaurants to list their businesses for ordering their food online and picking up the orders by themselves.
Virtual restaurants are the most authentic form of cloud kitchen wherein, consumers are unable to see the physical presence of a restaurant or kitchen and can only order food online from that restaurant. Such kitchens are also known as ghost restaurants due to their absence of physical presence. Such virtual kitchens operate in a warehouse or food factory alongside other similar kitchens. For operating in a cloud kitchen, you must have a licensed brand, a commercial kitchen space during times of operation, and should have a constant presence in an online food delivery app. Such cloud kitchens work with on-rent staff and must ensure that they have easy access to all their necessary ingredients for running the business smoothly.
Shared cloud kitchen
Many food entrepreneurs have started their own business of renting commercial kitchen spaces to multiple brands under one roof. Such entrepreneurs run their own food business and also take advantage of their extra space to rent it to other brands for an added earning. As in a shared cloud kitchen, the space owner works as a landlord besides, being a food producer, he needs to maintain the space properly. You need to ensure that high-quality equipment and facilities are present in the kitchen space if you want to succeed in this model of cloud kitchen.
Benefits of cloud kitchens
The Cloud kitchen concept is now gaining popularity among food vendors as well as consumers. There are various reasons for its increasing popularity, some of which are stated below.
Low budget kitchens
Cloud kitchen models cut down the capital requirement for food producers considerably. As in a cloud kitchen, you don’t need to own a lavish restaurant to allure customers to come and try your foods, the maintenance costs automatically reduce. You can easily get a cloud kitchen on rent as per your requirement during operational periods. Also, in a cloud kitchen, you need not keep a line of staff permanently giving them regular wages. Instead, you can opt for a cost-saving option of hiring staff as per your need. Thus, cloud kitchen is an affordable option for small entrepreneurs intending to start a food business without investing a lump sum.
By building a customized kitchen space for aiding faster food preparation and delivery process, a cloud kitchen model can work more efficiently than an ordinary restaurant kitchen. As several food companies can work together in a cloud kitchen, such a kitchen can prepare large quantities of meals at a time to satisfy an overwhelming number of customers at peak hours. You can line up the ingredients according to the meals and their urgency of preparation based on their demand at a particular point in time. The kitchen set up for each food supplying brand comes in the form of compact counters that are easy-to-manage, budget-friendly, and are tailor-made to serve the purpose well.
Cloud kitchens help businesses adopt changes according to demand and consumer base. As such kitchens are not restricted to one particular location, they can cater to a larger number of customers through an online delivery service. Besides, you can schedule your meal preparation according to the demand at different times in a day. You may opt for an increased number of rented staff during a season of high demand to keep up with the increased number of orders. During normal times, you may save money by hiring a small team of staff as per requirement. By keeping track of the dishes that are selling well and the ones not doing so well, you can make changes in your online menu to get better responses from customers. You may even launch demand-based food brands for a particular period to gain higher profit taking advantage of its huge popularity at that time. Thus, cloud kitchens are highly adaptable according to consumer behavior and demands.
Higher branch reach with low investment
Standard restaurants take time to create awareness about their existence among prospective consumers and earn their reputation. However, cloud kitchens just require to ensure their presence on a food delivery app to reach customers. Though brands need to pay for their visibility or to optimize their presence on such apps, the cost is still substantially lower than the investment required to promote restaurants through traditional methods. By achieving visibility on a reputed food delivery app like Zomatoand that of Swiggycan expand their reach to thousands of potential customers in no time.
Achieve a pan India presence
With cloud kitchens, establishing a pan India presence has become easier for any brand. Since, cloud kitchens provide completely equipped kitchens to brand, a brand expand its branches to anywhere in the country without much investment or effort. Needless to say, business expansion is one of the best benefits that cloud kitchens provide. Along with the pan India business and brand expansion, cloud kitchens added to increased revenue.
Main elements to run a cloud kitchen
Given below are the things that are mandatory to run a cloud kitchen successfully.
The basic functionality of cloud kitchen relies on managing orders through online platforms and websites. Entering orders manually takes time and lowers down the efficiency. To streamline things, consider having a centralized ordering system that tracks all orders so you can later draw meaningful insights from that data.
The packaging is a crucial aspect of any cloud kitchen business. Good packaging helps in making a good impression and vice versa. When the food is well packed, it reflects you as a hygienic and reliable virtual restaurant.
It’s all about smooth operations! From receiving the order and preparing it, to packaging and delivering, the less time it takes, the better it is. Your websites and apps should be easy to use, lightning-fast, and user-friendly to get customers.
Cloudkitchens do not require the number of employees as regular restaurants do; however, it is important to maintain protocols and numbers that can handle business fluctuating volumes.
Marketing for the food business is even easier with the cloud kitchen business model. Partnering with popular food delivery services will eventually create a virtual presence for your brand.
Going through these significant benefits of cloud kitchen, it can be concluded that this new age concept is going to flourish more in years to come. Such a commercial kitchen model can be a great ray of hope for small food business aspirants to launch their brand and earn lucrative profits with minimal capital.