Cloud Kitchen also called a virtual kitchen, ghost kitchen, or dark kitchen is a kind of restaurant that provides order-only services without dine-in convenience. Cloud kitchen takes orders by online or phone call. They mainly depend on Food aggregators such as Swiggy, Zomato, etc.
As the demand for online food delivery increases, cloud kitchen is growing rapidly among food entrepreneurs. Because the concept is focused on food delivery, this delivery kitchen doesn’t offer any location for dine-in service. It is resulting that most firms are shifting to cloud cooking spaces for gaining more profit margin and customer reach.
Cloud kitchens use distributed areas where multiple restaurant brands function under one roof to reduce labor and equipment costs. For example, Kitopi, the most popular cloud kitchen company in the UAE, joining with multiple restaurants for boosting its business and expand its customer through online delivery.
So, if you are deciding to construct a cloud kitchen or work in one, it is better to understand the multiple cloud kitchen models that are now available. Let’s discuss cloud kitchen models, why a restaurant needs a cloud kitchen model and its benefits.
Types of Cloud kitchen models:
Cloud kitchen models are in 6 types.
Independent cloud kitchen
This independent cloud kitchen model is commonly used. In this model, a virtual restaurant operates without a physical location accessible to customers. Because of the lack of service and maintenance costs related to a traditional restaurant, this cloud kitchen idea helps small food business owners to decrease capital investment. A cloud kitchen runs in a tiny cooking place of 500 to 600 square feet. Independent cloud kitchens are unique in that they provide services in a single cuisine. These kitchens are equipped with professional cooking tools, for delivery-oriented operations.
Multi-brand cloud kitchen
This is a tech-focused cloud kitchen idea in that a single main brand handles a few food companies, each concentrating on a high-demand cuisine. This model targets to satisfy the demand for familiar cuisine in a particular area. The cost of operation in this cloud kitchen is low because all of the brands run from the same kitchen. To analyze the demand for cuisine in a particular area, the internet ordering record, demographic features of native residents, social listening, and other methods are helpful. Online orders are only accepted by this cloud kitchen and the delivery of food is through an aggregator or their delivery team.
Hybrid cloud kitchen
This model is a little different from a real cloud kitchen. This hybrid kitchen is operating in a physical location of a single food brand. Even though this kitchen has a shop, they do not offer dining service. The brand is having many physical locations visible to customers, but it runs similarly to a standard cloud kitchen. Based on customer demand, food brands may create a multi-cuisine menu using a hybrid cloud kitchen. Seasonal menus are available to fit the demand for special items like biryani, pastries, and pizza.
Delivery App owned shell cloud kitchen
This is a unique cloud kitchen model built on an aggregator. This method needs restaurants to use a particular delivery agent who owns the cooking space they run. Another name for this model is ‘Shell kitchen’. This method enables multiple restaurants to run under one roof, making it an outstanding option for small food entrepreneurs who want to start selling food with no high investment. Additionally, the partnership with a prominent delivery agent helps these partner brands is rising brand recognition through the delivery app.
Delivery app-owned built-in cloud kitchen
This model is nearly the same as the previous one, however, it has more capabilities. A single completely equipped kitchen, Owned by the owner of the app, holds multiple brands. A store is available in this model. While the app owner agent manages the equipment, order reception, and food delivery, the network restaurants have to bother about the food preparation.
Outsourced Cloud kitchen
The concept of this model is a creative one in that most of the meal preparation is done in a centralized cloud kitchen. On the other side, the partner restaurant includes the finishing touches to the dish, which is then supplied through the cloud kitchen owner brand. This kitchen model is an advantage for regular large orders because the work is shared and helped by the cloud kitchen brand.
Why do you need a cloud kitchen model in your restaurant?
Even before covid-19, Cloud kitchens were common. They are huge food preparation facilities where restaurants allot the space for rent to prepare delivery-oriented food. It is a huge relief for the self-quarantine customer who needs to order healthy, nutritious home-cooked food every month, and it is not an income generator in the tough time.
With the decrease of a major operational expense by the cloud kitchen, the cost of a restaurant setup is removed. Coworking and shared kitchen areas help you to save money. Having numerous small kitchens assists to centralize inventories and make the best use of staff.
Some options enable restaurants to upgrade their technology without investing more money. On the other side, the monthly subscription charges destroy the part of the budget of many start-up kitchens. Apart from that, the organization should have an online ordering system, to avoid depending fully on the delivery partner. That’s why a restaurant needs a cloud kitchen model to be economically secured in all situations.
You can select from a variety of food plans ranging from Pan Asian to Continental, unique Indian food to exotic foreign cuisine. During covid-19, cloud kitchens are also known as restaurant-as-service which experienced rapid growth and development. In 2019, the gross market value of the cloud kitchen was predicted to be US$400 million in India. When it is worth $2 billion, it is also predicted to increase at a 35% CAGR from now until 2024.
Advantages of cloud kitchen business:
- Low investment
- Low operating cost
- Experimenting is easy
- High market opportunity.
- Ease in expansion.
Disadvantages of cloud kitchen business:
- High margins charged by the aggregator
- Customer data masking
- Lower average per customer
- Low-profit margins
- Less or no customer interaction
The cloud kitchen business methods are continuously increasing, and multiple convenient cloud kitchens may appear shortly. If you want to start a food business on a lower budget, cloud kitchen is the best way to succeed in the ever-growing food market.