What Is a Cloud Kitchen?
Let’s assume a scenario.
You’re running a big restaurant with a dine-in capacity of 100 people.
The land property where you’re running your restaurant with a 100-people dine-in capacity is on a lease, and you are spending 30% of your revenue on rent only.
So, on one great day, to reduce your operating cost, you decide to close the restaurant’s dine-in area and serve your customers through the home-delivery option only.
Here, you’re technically running a cloud kitchen!
In the cloud kitchen model, you don’t offer dine-in service and only provide food home-delivery service from your food preparation and cooking facility.
So, it is optional to have a professional kitchen. You can run the cloud kitchen from your home too.
A cloud kitchen is often called a delivery-only restaurant, online-only restaurant, ghost kitchen, virtual restaurant, and shadow kitchen.
Cloud Kitchen Market
According to reports, the global cloud kitchen market was valued at USD 29.4 billion in 2020. It is anticipated to reach USD 112.7 billion by 2030 at a CAGR of 13.12% from 2021 to 2030.
If we talk about the cloud kitchen market size by region, the USA and Asia are leading the chart.
The top factors fueling the growth of the cloud kitchen market are,
- Rising adoption of online food delivery platforms
- Eliminating the need for physical infrastructure and equipment
- Increased standard of living and urbanization
- The low-cost implementation
Types of Cloud Kitchen
The cloud kitchen model divides into sub-models according to the mode of operation, revenue streams, and size.
- Uni Brand Cloud Kitchen
- Multi-Brand Cloud Kitchen
- Restaurant Combined With Cloud Kitchen
- Co-Working Cloud Kitchen
- Aggregator Cloud Kitchen
Uni Brand Cloud Kitchen:
Here, a single restaurant with a brand name prepares and delivers food. It is the best cloud kitchen model for beginners as this requires minimal investment and effort.
Multi-Brand Cloud Kitchen:
A single restaurant having several different food menus with different brand names is called a multi-brand cloud kitchen.
Running such a cloud kitchen without experience can be costly as it requires excellent coordination skills, a large fleet of hired drivers, and restaurant industry knowledge.
Restaurant Combined With Cloud Kitchen:
In such a cloud kitchen model, a typical restaurant with dine-in facilities runs a separate cloud kitchen to multiply its revenue stream and utilize its staff in a better way.
Co-Working Cloud Kitchen:
Here, many cloud kitchen owners prepare and deliver food from one kitchen place. They all pay the equal operating cost of the kitchen.
CloudKitchens, Kitchen United, and Food CoWorks are some examples of shared kitchen spaces.
Aggregator Cloud Kitchen:
Many food delivery aggregators, such as Swiggy, Zomato, etc., hosts these cloud kitchens. The aggregators create an ecosystem inviting top-performing restaurants to prepare food from a single co-working space.
Why Cloud Kitchen Over a Traditional Dine-In?
Starting a cloud restaurant is much easier and more cost-effective than creating a dine-in restaurant. Here are some benefits to choosing a cloud kitchen over a dine-in.
Less Staff, Better Customer Services
When a customer enters your restaurant for a dine-in option, you have to allocate one of your floor staff members for your customer until he finishes with his meal.
In other words, you have to invest more time, money, and effort to deliver good customer service to the customers visiting your restaurant.
But in the case of the cloud kitchen, you need to allocate your staff only when the customer has some query related to a payment dispute or the order is misplaced (which happens rarely!)
Less Investment, More Revenue
“Your revenue will not be limited to the seats.”
It is one of the most significant benefits of a cloud kitchen. Since it does not require ample space for a dine-in option, you don’t need to buy or rent a large property and pay huge.
The ‘rare’ advantage of a cloud kitchen is that you can also start it from your home, as it requires only enough space to cook and pack food properly.
How to start a cloud kitchen?
Starting from scratch when you are planning for a business is challenging. But if you make a perfect plan on paper and keep everything accountable before leaping, the odds of challenges in your path decrease. Here are some essential steps to get started.
A Cooking and Food Preparation Space
Location. Location. Location.
It is the most basic requirement for a cloud kitchen. However, the best part about this is that you only sometimes require a professional kitchen to start it.
You can even begin from your home. However, taking a small property on lease from where you can cook professionally and manage the fleet of drivers is advisable. It will also help you get the required permits from the government efficiently.
Delivery Drivers
Since cloud kitchens are “delivery-only restaurants”, you would require a fleet of drivers to deliver the food to your customers.
The best plan is to hire your drivers rather than going for a gig model where drivers work independently regardless of working time and method. It helps you gain control over them and utilize them in the kitchen.
Licenses and Permits
To start a cloud kitchen, you need to receive various essential licenses or permits, which vary depending on the country. If we talk about India, you will require FSSAI, GST registration, and Health/Trade approval.
App for Your Customers
The customer is the king, and you must offer them the best.
Also, your business will be compared directly to the aggregators in this particular element. So, this is your chance to conquer them in their own game by providing exceptional.
The basic functionality of this app is that your customer can explore your menu, place orders, manage the addresses, track the driver, pay for the food, and give ratings to both restaurants and drivers.
App for The Delivery Drivers
An app makes it easy for drivers to receive delivery jobs from you, get delivery instructions from customers, navigate to customers’ locations, communicate with customers, etc.
The other very significant benefit of having an app for delivery drivers is that you and your customers can track the live location of the drivers while they are on delivery.
App for Admin or Cloud Kitchen
To receive orders placed by customers, assign delivery jobs to drivers, track drivers’ locations, update the menu, validate the payment, to communicate and coordinate with drivers & customers, you will seriously need an app.
It helps you to manage a cloud kitchen very effortlessly and profitably. And the best part is that everything from customers to their orders, delivery drivers, and payments comes to your fingertips.
Here, it is worth mentioning that we provide apps for delivery drivers, customers, and admin in a single package. We don’t charge individually.
Benefits of Developing a Mobile App for Cloud Kitchen
Cloud kitchen itself is an optimized business model. It gives you the flexibility to experiment with your business accordingly. So, an app would act as a cherry on top.
A mobile app and a website will help you to receive & manage orders and payments and efficiently operate the cloud kitchen. Here are four noticeable benefits to choosing your cloud kitchen app or web platform.
Robust order & delivery management:
Cloud kitchens with custom food delivery apps are more likely to give a great customer experience, giving them a further edge over traditional cloud kitchens in alliance with the aggregator apps.
Not being tied to any aggregator or physical location, you can experiment with your menu and operating time as per your business needs without impacting customer satisfaction.
As tech-dominant, the custom cloud kitchen app can efficiently optimize the model and be smarter with your ordering and preparation decisions over time, suiting your scheduling and consumer behaviour and increasing margins.
Commission-free with your custom branding:
Let me tell you one thing straight. If you want your business to be successful, then it is not advisable to rely on one source for customers, like an aggregator app.
With your custom cloud kitchen app, you can explore many untouched areas to get new customers through branding and marketing.
Additionally, the higher commissions on the aggregator app can eat up your margins and leave little (or no) control over last-mile food delivery, which ultimately puts your brand reputation at risk.
With your custom cloud kitchen app, you can limit such negative impressions on your brand, and by being tech-independent, you can map and trace the changes needed.
Though it comes with slightly higher marketing costs and higher costs for logistics compliances, trust me, it will all be worth it in the coming future in terms of higher sales and profits.
Access to user data and real-time adaptability:
DATA is the new oil, and when I say it, I mean it.
Who are your regular customers?
Which is their preferable cuisine?
Which food item is their favourite?
These are one of those many questions which are very important for the decision-maker of the business. They can only be answered by your customers’ order patterns and behaviours. With an app, you can analyze the user data in real-time and alter your business strategies accordingly.
Digital brand awareness without high marketing spend:
You can get quick exposure & visibility in the market for your cloud kitchen business through your custom cloud kitchen app without indulging in many of the costliest expenses of conventional marketing. You will also get benefited from online presence, reviews, and ratings. This data from your app will help your digital strategies to be more refined.
Here, it is worth mentioning that we also provide digital marketing services to those who are passionate about their business growth and looking for some “creative-cum-effective” ways for it.
We have got you backed!
Having teammates who are foody and passionate about development is a deadly combo. So, delivering a business solution becomes an out-of-box solution for your restaurant business.
Our white-label cloud kitchen app solution can offer advanced features like
- Boost Zone – that identifies areas with higher demand and diverts more drivers there.
- Advanced Job Allocation Algorithm – that reduces gathering at the restaurant.
- Smart Selfie – that validates driver’s identification.
- Three-way Review System – with which drivers, users, and restaurant customers can rate each other.
And many more.
Leave all your Mobile App Development worries with us. Reach more customers in your locality for your cloud kitchen business with a feature-rich food delivery app.
Plan a virtual meeting, or come over for a cup of coffee!
FAQ’s
Can I run my cloud kitchen manually?
Your cloud kitchen will only walk without an app; it will not “run”. I am just kidding. Yes, you can run your cloud kitchen without an application but having an app opens up new doors for better customer service and experiences.
Why hustle for an app when you can associate with the aggregator apps?
It is appropriate to list your cloud kitchen on various 3rd-party aggregator apps. However, these 3rd party apps charge a significant amount of commission (almost 25-30%) on each order. So, the best strategy is not to keep your eggs in one basket.
Is cloud kitchen can only succeed if they offer fast food?
It is not the truth at all. You can successfully run your cloud kitchen by offering multi-cuisine options other than fast foods, including single-portion foods, regional foods, healthy foods, meal boxes, grandmother recipes, small eats, etc.
Is it expensive to set up a cloud kitchen app?
I must tell you that creating a cloud kitchen app is not very expensive. It is way cheaper than establishing a full-fledged restaurant business. It is a worthful “Technology Investment.”