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One question that arises is that do cloud kitchens, which came up as an aftermath of the pandemic, have a future or not? The answer is yes.
COVID-19 took a toll on every industry but the food and beverage industry (F&B) industry is one of the hardest hit. Numerous restaurants shut down due to the ongoing pandemic. Many cafes, restaurants, and bars shut shop as they failed to survive the second wave of COVID-19. But as we moved further, almost every industry learned to cope with the pandemic, and living with the virus became the new normal.
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Similarly, the F&B industry also came up with new ideas to deal with the losses incurred over the last two years during the lockdowns. “Cloud kitchen” came out as the weapon with which the F&B industry set out to win the COVID-19 battle.
That is why cloud kitchens have witnessed astronomical growth in India. Indians are known for their love for food and that is why even the pandemic couldn’t deter us from ordering in our favourite food. This motivated many chefs to open cloud kitchens.
According to a report by RedSeer Management Consulting, cloud kitchens are set to be a $2 billion industry in India by 2024, up from $400 million in 2019. Not just that, the market size of cloud kitchens is expected to reach $1.05 billion by 2023. Food aggregators are aggressively investing in cloud kitchens to cash in on the frenzy.
Cloud kitchen is basically a setup where food is prepared in one place and delivered at the doorstep of customers who order via calls or online ordering platforms. The best part about cloud kitchens is that they don’t offer dine-in services so there is no need for them to invest in infrastructure and furniture. They are mainly into food preparation and delivery or tie-up with food ordering portals like Swiggy, Zomato, Uber Eats, etc.
Reasons behind success of cloud kitchens
● One of the prominent benefits of a cloud kitchen compared to a conventional restaurant is the lower barrier to entry and lower ongoing costs.
● Cloud kitchens enable one to target multiple segments of the market simultaneously. It has the potential to run multiple brands out of the same kitchen and to serve different demographics at the same time while benefiting from economies of scale across brands.
● Cloud kitchens allow flexibility. One can keep track of what is working and what’s not, and then reevaluate the menu.
One question that arises is that do cloud kitchens, which came up as an aftermath of the pandemic, have a future or not? The answer is yes. I won't be exaggerating if I say that cloud kitchens are the future of the F&B industry. Numerous factors justify their bright future. Let’s understand these factors one by one.
1. Technology is king:
The success of cloud kitchens is technology-driven as they need a quicker and better return on investment (ROI). Technology enables cloud kitchen operators to know more about their customers’ likes and dislikes and then they can alter menus accordingly. Customer satisfaction is critical for long-term success and technology has made that possible for cloud kitchens. Therefore, such kitchens are bound to grow rapidly in near future.
2. D2D model is in demand:
With the popularity of food delivery apps, cloud kitchens can make a huge mark in the F&B industry by creating an efficient connection with some D2C channels such as websites, social media, and messaging platforms. Online ordering and food delivery apps are everything today because of the convenience they provide to customers and this will make the future of cloud kitchen more robust.
Cloud kitchens are cost-efficient and much easy to maintain than conventional restaurants. This aspect will give a boost to self-employment, especially to women. As it doesn't require much investment, such kitchens have the potential to fulfill the dream of young chefs who want to own their eateries.
Cloud kitchens are the present as well as the future of the F&B industry. As the way of living life is changing, customers' demands are also changing and increasing. The change of paradigm in the F&B industry can only be survived through cloud kitchens as they are tailor-made for the fast-paced life of people. And, as the pandemic has accelerated the pace of change and technology adoption, cloud kitchens become the answer to all the worries of the F&B industry.
The author Prerna Kalra is CEO and co-founder of Daalchini Technologies. The views expressed are personal.
(Edited by : Kanishka Sarkar)