Homebusiness News

How cloud kitchens are transforming the future of food industry

This article is more than 1 year old.

How cloud kitchens are transforming the future of food industry


Dark kitchens seem to be the future of dining. Will traditional restaurants get replaced?

How cloud kitchens are transforming the future of food industry
As restaurants gear to reopen following an extended shutdown due to the coronavirus pandemic, a majority of the population remains sceptical about dining out and would prefer either home cooked meals or takeaways.
As the food industry has undergone a tectonic shift which is likely to continue in the near future, the option of ordering food through apps has boosted cloud kitchens.
Cloud kitchens are licenced commercial food production facilities where multiple restaurants rent space to prepare delivery-optimised food, from an existing menu.
So, will cloud kitchens transform the conventional dining pattern? 
According to DataLabs by Inc42, the food ordering market in India is expanding at a CAGR of 16 percent to reach $17 billion by 2023. The market size of a cloud kitchen is expected to reach $1.05 billion by 2023. Evidently, food aggregators are aggressively investing in cloud kitchens to cash in on the frenzy.
1.  What is a cloud kitchen?
A cloud kitchen, also know as a ghost kitchen or dark kitchen refers to a place where food is prepared and delivered at the doorstep by taking orders on calls or via online platforms. This implies that cloud kitchens rely on third party delivery platforms such as Swiggy and Zomato.
In simple terms, these cloud kitchens act as large kitchens for restaurants to prepare food and keep ready for pickup by a customer or delivery personnel. Various restaurants can operate from the same ghost kitchen, either working from the same facility or breaking the space into separate areas.
2. How are cloud kitchens different from restaurants?
Ghost kitchens do not provide dine-in services. They mainly prepare food and package it for delivery.
Unlike these virtual kitchens, restaurants are traditional brick and mortar outlets that have their distinct branding. Restaurants also need to focus on ambience and service.
3. Why is a cloud kitchen deemed a smarter choice?
For starters, dark kitchens cut operating costs drastically by hiring fewer employees. A company has the luxury of focusing on a quality menu rather than washing serving dishes or setting up tables. This platform is a better opportunity for new entrepreneurs as the initial investment is smaller, when compared to a dine-in restaurant.
Additionally, dark kitchens are based in non-premium locations and command less rent.
Cloud kitchen have the ability to simultaneously target multiple segments of the market. There is an option of running multiple brands out of the same kitchen and serving different demographics at the same time.
But can it still beat and replace the loyalty of customers towards some popular food giants where dining- in and interaction are a key feature? Only time will tell.
next story

Market Movers