If there’s one phrase that’s crossed through every restaurateur’s mind in the last 2 years, it’s “cloud kitchen”. And it’s no surprise that the cloud kitchen concept has taken off so well; businesses are experiencing a paradigm shift where dining has become more personalized and also more home based. Events like the 2020 COVID19 pandemic have only strengthened the cloud kitchen model in India.
The simplest way to define cloud kitchens is that they are entirely internet based restaurants that only deliver food home. The service may either be part of an online aggregator or have their own virtual ordering mechanism, depending on what costs allow. Their main hurdles would be fulfillment and logistics.
Currently, cloud kitchens are valued at USD $700 million globally according to a study done by Goldstein Research, and are expected to have a growth rate of a steady 17.25% over their projected time period. In India alone, new studies predict that cloud kitchens may grow in scale by as much as 5x over the next 5 years. The projected value of these startups? $2 billion.
No dine-in space: Perhaps the most notable difference between a cloud kitchen model and a restaurant model is that cloud kitchens operate without a dine-in space, and thus are suitable for deliveries only. The advantage, of course, is that a lot of overheads are saved in terms of real estate, labor, utilities, and taxes. The only real expense being the cost of production, the cost of operating the service online and logistics cost: Things that a commercial kitchen planner can help out with.
But this model also has a few caveats. Of course, with there being no dining space, you cannot provide a dining experience that would otherwise appeal to potential customers. In 2019, private surveys revealed that 34% of Indians preferred eating outside to dining at home. While these may be pre-COVID numbers, it is still important to understand that some markets prefer dining outside despite the odds.
Then there’s the question of what overheads the commercial kitchen model has. While they may not require a dedicated serving staff and real estate, these kitchens still require a lot of working space and cooking staff (especially if they are considering scaling up quickly), a partnership with food aggregators or proprietary software that lets customers order by themselves.
But overall, the industry is currently shaping out to be an exciting one if you intend to start a cloud kitchen concept of your own. The numbers say cloud kitchens in India are expected only to rise, and a commercial kitchen planner like HPG can certainly help you get on to that bandwagon before it departs. Reach out and find out more about our services today. Fill out our contact form or simply call +91-9311 202 627