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Why Your Restaurant Needs A Cloud Kitchen Business Model: A Complete Guide

May 02, 2022

Raman Sama

Ever wondered why your restaurant needs a cloud kitchen business model? Cloud kitchen is a modern food business strategy that attempts to satisfy customers' culinary needs by delivering food to their doorstep. Due to consumers' lack of actual sight, such a kitchen is sometimes known as a "ghost kitchen" or "virtual kitchen." As a result, cloud kitchens do not require a lavish set up in the shape of a restaurant to attract guests.

Cloud kitchen is gaining popularity among food entrepreneurs as the demand for online meal delivery grows. Because the concept is centered on food delivery, the delivery kitchen does not provide locations for dinners to dine in. As a result, more and more food firms are turning to cloud cooking spaces for increased profit margins and consumer reach. Before considering constructing a cloud kitchen or working in one, it's a good idea to familiarize yourself with the various cloud kitchen models that are now available.

Cloud Kitchens use shared areas where numerous restaurant brands generally operate under one roof to cut labor and equipment expenses. Kitopi, for example, is the most well-known cloud kitchen company in the UAE, partnering with several restaurant brands such as Papa John's Pizza, Right Bite, Mix 'N' Match, and others to boost its business and expand its client base through online delivery.

Why Your Restaurant Needs a Cloud Kitchen Business Model: Understanding its Impacts

Cloud kitchens, which were common even before COVID, are big food production facilities where restaurants rent space to make massive amounts of food for delivery alone. It's a tremendous relief for self-quarantined people who want to order wholesome, nutritious home-cooked food on a monthly basis, and it's not only an income generator in tough times.

The cost of setting up a restaurant is eliminated with the use of a cloud kitchen, which reduces a significant operational expense. Coworking and shared kitchen areas might help you save money. Having multiple tiny kitchens under one roof helps to centralize inventories and make the best use of staff.

There are cloud-based options that allow eateries to become high-tech without having to spend a lot of money upfront. The monthly subscription charge, on the other hand, burns a hole in the finances of many start-up kitchens. Apart from that, in order to avoid relying entirely on the delivery partner, the organization must have its own online ordering system. This is why your restaurant needs a cloud kitchen business model, well, to be financially secured under all situations.

With cloud kitchens, you may choose from a variety of meal plans ranging from Pan Asian to Continental, unique Indian delicacies to exotic foreign cuisines.

During the pandemic last year, cloud kitchens, also known as restaurant-as-a-service, experienced rapid growth and development. In 2019, the gross market value of the cloud kitchen market in India was predicted to be US$400 million. It is predicted to grow at a 35 per cent CAGR from now until 2024, when it is worth $2 billion.

Six Types of Cloud Kitchen Business Concepts That You Must Know

1. Independent Cloud Kitchen

The most common type of cloud kitchen is an independent cloud kitchen, in which a virtual restaurant runs without a physical storefront accessible to consumers. Due to the absence of service and maintenance costs associated with a traditional restaurant, this virtual kitchen concept assists small food business owners to reduce capital expenditure.

A cloud kitchen runs in a small cooking space of 500 to 600 square feet. Independent cloud kitchens are distinct in that they specialize in a single cuisine. For delivery-oriented operations, these kitchens are fully equipped with professional cooking tools.

2. Multi-Brand Cloud Kitchen

This is a tech-focused cloud kitchen concept in which a single mother brand manages several food companies, each specializing in a high-demand cuisine. This cloud kitchen model aims to meet the demand for popular cuisine in a certain area. Because all of the brands operate from the same kitchen, the cost of operation in such cloud kitchens is kept to a minimum.

The internet ordering records, demographic characteristics of native residents, social listening, and other methods are used to analyze the demand for cuisine in a specific area. Only online orders are accepted in this delivery kitchen model, and food is delivered either through an aggregator or by their delivery team. Understanding why your restaurant needs a cloud kitchen business model requires the owners to first understand multiple types of cloud kitchen models that can help them stand apart.

3. Hybrid Cloud Kitchen

This model differs slightly from a genuine cloud kitchen model. It's a hybrid cloud kitchen with a single food brand operating out of a physical location. Even though such kitchens have a store, they do not provide dining services. The brand can have many physical locations visible to customers, but it functions similarly to a standard cloud kitchen.

Food brands may create a multi-cuisine menu using a hybrid cloud kitchen based on customer demand. Seasonal menus are also available to suit the demand for specific items such as biryani, pastries, and pizza.

4. Delivery app owned shell Cloud Kitchen

This is a one-of-a-kind cloud kitchen model built on an aggregator. This strategy requires restaurants to use a specific delivery agent who owns the cooking space they operate. 'Shell kitchen' is another name for it.

This strategy allows numerous restaurants to operate under one roof, making it an excellent alternative for small food entrepreneurs that want to start selling food without making a large upfront investment. Furthermore, the partnership with a single reputable delivery vendor aids these partner brands in increasing brand recognition via the delivery app.

5. Delivery app owned built-in Cloud Kitchen

This app-based cloud kitchen is nearly identical to the previous model, although it has a few extra capabilities. A single fully equipped kitchen, owned by the proprietor of a delivery app, houses various brands.

A shop is also available in this cloud kitchen model. The network restaurants only have to worry about the meal preparation, while the owner delivery agent handles the equipment, order reception, and food delivery. When determining why your restaurant needs a cloud kitchen business model, one must keep in mind all the necessary advantages it can bring to your business in no time.

6. Outsourced Cloud Kitchen

The notion of an outsourced cloud kitchen is an innovative one in which most of the food preparation is done in a centralized cloud kitchen.

On the other hand, the partner restaurant adds the finishing touches to the dish, which is subsequently supplied through the cloud kitchen owner brand. Because the work is shared and assisted by the cloud kitchen brand, this kitchen concept is beneficial for regular large orders.

Final Thoughts

The Cloud Kitchen Business Strategies are continually growing, and newer and more convenient cloud kitchens may appear shortly. If you want to start a food business on a shoestring budget, cloud kitchen is the greatest way to succeed in the ever-growing food market.

Raman Sama