In 2020, several businesses were ravaged because of the onset of the Covid-19 pandemic. It is hard for businesses to bring back their place in 2021. Notably, this crisis forced the restaurant industry to take a shift to go digital. This is when the concept of Cloud Kitchen has become the talk of the town. Here’s a way to know how to start a Cloud Kitchen.
What is Cloud Kitchen?
Cloud Kitchen is also known by the terms: Ghost Kitchen, Virtual Kitchen, and Shared Kitchen. Unlike restaurants, it does not give the options like Takeaway and Dine-in to the customers. Amidst the pandemic, the concept of Cloud Kitchen has become indispensable. Without establishing infrastructure, business owners can start a food business with less investment and, in turn, can earn more upon increasing their customer base.
Ghost kitchen market stats – Future scope
- According to Statista, the global ghost kitchen market’s net worth in 2019 was $43.1 billion, which is forecasted to touch $71.4 billion by 2027.
- According to Grand View Research, the global Cloud Kitchen market’s value in 2020 was $51.96 billion, projected to increase at a compound annual growth rate of 12.4%.
- According to Allied Market Research, the revenue of the global Cloud Kitchen sector will grow at a rate of 12% from 2021 to 2027.
These prospects indicate that starting a Cloud Kitchen or Ghost Kitchen business will be a breakthrough. Doubtlessly, it will be a profitable niche compared to initiating a restaurant business.
Key benefits of Cloud Kitchen over the restaurant business
Not everyone can afford to start a food delivery business with huge investments. Here a Cloud Kitchen comes into play, which is a great opportunity for them. Here we have discussed some of the prominent advantages of establishing a Cloud Kitchen business.
- Low operating & rental costs
Restaurants with physical presence require a considerable percentage of the amount for the infrastructure. Contrary to that, you can save an adequate amount of money to pay rental charges for fancy infrastructure by starting a Cloud Kitchen business. Notably, there will be no maintenance charges for cleaning and fixtures.
- Promote & expand your business
A new restaurant requires a proper marketing strategy to mark business presence which is quite expensive. Instead of going for conventional marketing practices, going ahead with a delivery app for Cloud Kitchen will be budget-friendly. By the way, the app will become a marketing tool. Moreover, with the inclusion of new strategies, you can expand your business.
Unlike traditional restaurant businesses, there is no need to operate round the clock as Cloud Kitchen can function whenever the demand arises. For instance, if there are no orders, it is of no use to function. In case of an increased number of orders, it has to function over time. In a nutshell, it depends on the number of orders placed by the customers.
- Competitive edge
The offering of competitive pricing for the food with the additional charges for delivery fees will set Cloud kitchen apart from traditional restaurants. The initiative of Cloud Kitchen is trending nowadays, with many entrepreneurs showing interest in it.
Observing these benefits, take a chance to start a Cloud Kitchen business with a food delivery business in no time.
- Diversified business models of Cloud Kitchen
As mentioned above, there are different names given for the concept of Cloud Kitchen. Nevertheless, it can be a single restaurant owning multiple virtual restaurants or different vendors managing the business operations from a single space. Here are the different models which you could consider adopting.
- Ghost restaurant
It is the basic model, which is mostly operated as a single business. Moreover, this itself has a brand. The concept of Ghost restaurant involves its own kitchen space and operational requirements, including staff. At the same time, it does not provide the customers a destination spot to pick up their orders.
- Hybrid Cloud Kitchen
It holds the concept of Cloud Kitchen but with a physical space for a restaurant. So, it provides both delivery and takeaway services to the customers. This model aims at easing the process of customer relationship management.
- Shared Cloud Kitchen
This model will let the food producers have their own segment in the entire kitchen space. Thereby, the rental fee & facility cost will be less considerably.
- Aggregator Cloud Kitchen
Delivery services partnering with various restaurants, sharing a kitchen space. This is to fulfill the needs of the customers with a wide variety of cuisines. It is the choice of delivery services to build their own kitchen for the conversion to Cloud Kitchen. In such a case, the kitchen will regulate the process of food preparation and delivery services will take the responsibility of managing orders & customer acquisition.
- Outsourced Cloud Kitchen
This model will act as an intermediary in which it receives the order requests from the customers and these will be allocated or distributed to the restaurants. After that, the prepared orders will be handled by the delivery services who take full responsibility for delivering these to the customers on time.
Look at these points before you proceed further!
- Once you have decided on the business model, it is imperative to determine the marketing strategy in which ways you can get the attention of larger customers and boost sales.
- The foremost thing is to decide on the targeted region. Unlike restaurants, there is no necessity for you to fix a prime location.
- Even though it does not require much space as big business needs, you should own the staffing for inventory and order management.
- Most importantly, hire chefs to deliver good-quality food with better tastes. The truth is that customers rely on it when the food taste & quality is the best of all compared to your competitors.
- The very next big thing is to approach an app development company for developing your app for Cloud kitchen. It comprises one app for Customers, one app for Kitchen, and one app for a Delivery person.
How does a Cloud Kitchen operate?
The functionality of Cloud Kitchen is easy & straightforward. Here it is explained in simple steps.
- Initially, the customers place their orders through the online ordering & delivery platform.
- The orders which are confirmed will be passed on to the restaurants or kitchens.
- The food being prepared will be packed and then these will be handed over to the delivery person.
- Now, its delivery executives’ responsibility to deliver the orders to the customers’ hands on time.
Features that make the function of Cloud kitchen seamless
The features included in the online delivery platform will play a vital role. This is because it only determines how Cloud Kitchen will function.
- Quick registration
The registration process is mandatory upon installing the app. To do so, customers have to fill in the necessary details. Make sure the onboarding process is as simple as possible. This is because they wouldn’t like the lengthy onboarding process.
- Browse for food items
The search filter option will enable the users to browse their favorite food items without any hassle. This is because the food items or cuisines will be categorized in the app.
- Tracking of delivery status
Permitting the users to know the delivery status of the order will give a better experience. Besides this, it is useful for the delivery executives to know the customers’ exact location (delivery location).
- Discounts and rewards
To capture the users’ attention, it is imperative to introduce the loyalty program, provide discounts, coupons, offers, and rewards to loyal customers. This will eventually increase the user base.
- Secure multiple payment options
Give a choice to the customers for payments, providing COD and digital payments. The varied digital payments include UPI, credit cards, debit cards, and e-wallets. Ensure that the transactions made via the app are safe, secure, and seamless.
- Push notifications
This feature will keep the users informed regarding the new deals/offers, order status, and other required details in order to improve engagement.
- Ratings & Reviews
It is the most indispensable feature for business growth. Gather customers’ feedback regarding the delivery service and get ratings for the ordered food items or cuisines. Analyzing these and taking necessary actions will give you the path to success.
Starting a Cloud Kitchen business is a wise decision in this technology-driven digital world where people usually rely on technology to get whatever they need. As we all know that the market value of Ghost Kitchen has good scope, the startup owners or business owners will ensure to have a considerable return on their investment. If you are determined to start a Cloud Kitchen business right away, contemplate the recent market trends and launch your app to ease the business operations.