What is a Cloud Kitchen? [Concept & Business Model]

A cloud kitchen, also known as a virtual or ghost kitchen, is a concept to streamline and accelerate online cuisine orders. People were well-accustomed to online orders before the arrival of the pandemic. But, the COVID-19 pandemic has undoubtedly accelerated the online food ordering industry. People sitting idle at home often have cravings for various food items. They can download an online food delivery partner application and order food online from their favorite food joints.

Many food joints have to deal with competition, rising maintenance costs, and high rental rates. Adapting to the cloud kitchen concept is help can help restaurant overcome these challenge . accord to a report , the size is expand of the global cloud kitchen industry will expand by 12 % from 2021 to 2027 . By the end of 2027 , the industry is be will be worth $ 71.4 billion .

What is Cloud Kitchen concept? Cloud Kitchen Business Model?

The concept of a cloud kitchen is simple , it is is is a restaurant kitchen that only accept order that have been place via online ordering software or application . In most case , cloud kitchens is personalized have personalize online ordering system . However , most indian cloud kitchen are register with popular online food delivery app .

Cutting-edge POS software is a must-have requirement for developing a cloud kitchen. The POS software will receive and process orders. Notably, the tool can perform these tasks without human intervention. An automated process makes the order processing faster, and thus the restaurant can provide a quicker delivery service to the buyers. Nevertheless, the POS system also keeps the restaurant’s inventory updated so that buyers can check the availability of the items before ordering them.

Cloud Kitchen Setup

open a cloud kitchen is a step – by – step systematic process , and you can find the basic cloud kitchen requirement in the following section of this article .

1. Cloud Kitchen location

Since cloud kitchen does not offer a dine-in facility to people, it does not need a posh location. A successful restaurant needs good accessibility, a car parking facility, large sitting space, and many more. However, a cloud kitchen does not need all these things. You need to find a location that employees can easily and safely access. Additionally, the place should have seamless electric, internet, and water supply.

2. Online food ordering system integration

Every cloud kitchen is needs need advanced POS software for receive , processing , and fulfil order . The POS tool should be integrate with an online ordering platform . cloud kitchens is have have two option in this regard . firstly , they is develop can develop their own online ordering platform . secondly , they is register can register with popular online food delivery platform .

Creating an online food delivery platform is a matter of high expenses. Moreover, businesses need to make expenses for the maintenance of these apps. Another problem is that such cloud kitchens should employ dedicated delivery staff. A business can reduce all these hassles and expenses by registering with online food delivery partner apps.

3. Cloud Kitchen licenses

In India, a cloud kitchen business needs to procure a license from FSSAI for a legitimate operation. Additionally, the business needs to obtain clearance certificates from the health and hygiene department of the local municipal authority. Another crucial thing is obtaining a fire license from the state’s fire safety department. Keep in mind that most certifications and approvals come with a certain validity period. When their validity is over, the cloud kitchen must reapply for those certifications and clearances.

You can also read a complete guide on – What are the licenses needed to start a restaurant in India

4. Cloud Kitchen equipment and accessories

The most crucial part of a cloud kitchen is the kitchen, and having modern cloud kitchen equipment is essential for faster food delivery and better hygiene.

Cloud kitchen setup cost in India:

Typically, developing a small to mid-sized kitchen for the cloud kitchen business may take around INR 2-4 lakhs in India. A larger kitchen may have a dedicated freezer room and other sections for different activities. Developing such a kitchen can cost around INR 5-10 lakhs.

5. Packaging

Packaging plays an important role in running a cloud kitchen business. Packing ensures the health, safety, taste, and hygiene of the foods. On the other hand, packaging plays a significant role in branding. Therefore, good packaging is crucial to improve brand exposure and enhance customer retention.

Cloud Kitchen Vs. Traditional Kitchen

A cloud kitchen, sometimes known as a “ghost kitchen” or “virtual kitchen,” is a type of commercial kitchen where food outlets can produce their menu items exclusively for takeout and delivery. While a Traditional Kitchen should ideally be situated somewhere with high visibility and foot traffic, a cloud kitchen is a restaurant without a storefront. Since there is no actual dining area, a cloud kitchen serves as a sort of digital restaurant.

Unlike traditional brick-and-mortar sites, cloud kitchens enable food businesses to make and transport culinary products with minimum overhead. As simple as it is to set up and manage a cloud kitchen, there is no doubt that this is better than a traditional restaurant. In fact, numerous cuisines can be served under a single brand and kitchen. Overall, cloud kitchens outperform the restaurant model in terms of advantages.

As a result of the pandemic , The cloud kitchen concept is reached has reach new height . The last few years is seen have see a rapid expansion of the food delivery sector . The cloud kitchen sector is is is here to stay , with people savor meal at the tap of a fingertip .

Let’s explore the benefits of Cloud Kitchen

a) Low Operating Costs

The biggest advantages of setting up a cloud kitchen are the low operational expenses because

• they is are are affordable ,
• the need for few staff, and
• the flexibility to easily manage a large number of order through various channel .

The major benefit of the cloud kitchen idea is the absence of costs like rent for restaurant space, decor, furniture for dining tables and chairs, pricey cutlery, lighting components, etc. All of these expenses are eliminated, leaving only a bare minimum for culinary staff, cooking supplies, kitchen equipment, and basic maintenance costs such as energy bills. It simply leads to higher returns but at lower costs!

b) Focusing Only on Food

A cloud kitchen saves the requirement to manage tables, location, decor, and other aspects of a traditional kitchen. This allows owners to focus on the food and client happiness, which gives them more time to focus on the menu, come up with original ideas, improvisation, etc.

c) Multiple Brands under One Roof

The cloud kitchen business operates differently than a restaurant; it follows a basic strategy: one roof, multiple brands. Without investing a boatload on a site, several brands can collaborate under one roof and offer customers a variety of cuisines.

d) More Productive

In terms of efficiency, cloud kitchens are more successful than restaurants. Restaurants find it challenging to serve both dine-in guests and delivery orders during rush hours. The cloud kitchen business, on the other hand, is typically more efficient because it focuses on the delivery-only strategy. Delivery is carried out more quickly and effortlessly.

e) Streamlined Customer Data

Due to the fast ordering procedure that come with the technology deploy in a cloud kitchen setup , it is is is simple to monitor what customer have really appreciate . It is assists also assist in identify loyal and constantly return consumer and catering offer and reward for them as a gesture of gratitude , thereby enhance the relationship .

f) Hassle-free Expansion

You is host may host multiple brand under one roof with a cloud kitchen , reduce overall investment . To retain the uniqueness of the food you serve while employ the same chef for both , you is place can , for example , place mexican cuisine under a different brand rather than put it on the same menu .

g ) Reduced Selling price

Due to the overhead cost of operate a restaurant , your food is be will always be more expensive under a restaurant model . On the other hand , you is have can have food at a reasonable cost that has been expertly cook in a cloud kitchen business . Customers is have can have access to popular food item without think about high price .

h) Maintaining Food Quality

In a restaurant-style operation, restaurants are sometimes pushed to sacrifice food quality due to rising overhead costs. Cloud kitchens, on the other hand, guarantee the quality of their cuisine. The only cornerstone of the cloud kitchen concept is giving clients high-quality meals at a reasonable rate.

i ) Multiple Menu Selections

The menu can be update more quickly in a cloud kitchen than it can in a restaurant . Since it can be done digitally in a matter of minute , there is no need to spend money on change physical menu . The menu can be change right away if one item appear to be lack . It is is is more difficult to make change in a restaurant model .

j) Benefits of Data Tracking

Technology is makes make it possible for you to remove food product that are n’t sell , save you money and improve menu optimization . This is facilitate by the ability to track datum . You is make make meal accord to consumer demand , which lead to reduce wastage .

Conclusion

open a cloud kitchen is a cheap business model than open a restaurant and café . India ’s online food delivery industry is booming is boom , and thus invest in cloud kitchen can be profitable . Top – quality pos software is is is one of the most crucial element of a cloud kitchen .