What is Cloud Kitchen?
A cloud kitchen, also known as a “ghost kitchen” or “virtual kitchen” — is a commercial kitchen space. These kitchens provide food businesses with the facilities and services needed to prepare menu items for delivery and takeout. Unlike physical food business locations, cloud kitchens allow food businesses to create and deliver food products with minimal operating expenses.
The concept of a cloud kitchen has spiked recently. However, in just a few years there has been a blooming of this business across the globe. Do
you know, experts have predicted that by 2030, it will hold 50% of the market share and it may reach $1 Trillion? Another study by Statista predicts that the market size will double and reach $112.53 Billion by 2027. This industry is growing at a growth rate of 13.78%.
Who Can Start a Cloud Kitchens Business?
Cloud Kitchens have arisen from the tiffin services that were a very important part of the food business. It is a similar culture where there is a kitchen where food is cooked by the customers who can not dine in but they can only order through some food delivery service providers. Anyone can start a cloud kitchen business with little investment.
Many already existing food business persons use cloud kitchens as a means to diversify and spread their business. Some of the best examples of this case are:
- Delivery-only kitchens
- Caterers
- Meal preparation companies
- Packaged food producers
- Food product testing
Benefits of a Cloud Kitchen
Cloud Kitchen is a low-risk, low-investment business plan that has many benefits. Some of the most prominent benefits are mentioned below:
1. Affordable Startup Cost
Cloud kitchen or Ghost kitchen is the best way to start an affordable food startup. In this type of business, you don’t need to invest a huge amount in choosing a big shop at a prime location, taking care of aesthetic infrastructure, or hiring many staff.
People can even start this business in just a few days or weeks. You just need a Kitchen, kitchen equipment, and collaborate with the delivery partners and you are good to go.
2. Lower Overhead
The restaurant businesses have to struggle through various problems such as expensive staff payrolls, high property taxes, and huge maintenance costs. While cloud kitchen eliminates all these expenses and also does not need any time-consuming administrative work. You can start with just 2 cooks and share expenses.
3. Added Convenience
It’s not just about saving money, but it is also about owning a hassle-free business where you can focus on food quality. This is because there are many virtual kitchen providers who can take care of administrative tasks for you such as
- Health inspections.
- Equipment repairs.
- Janitorial services.
- Security monitoring.
- Property taxes.
- Utility bills.
Taking off the burden of these tedious tasks can allow you to put your maximum time into offering the best of your service.
4. Optimized Delivery Experience
Traditional food businesses get started without understanding the importance of wide-ranging delivery services. The Cloud Kitchen ensures far-reaching deliveries that are known to increase revenue and also make a great brand presence. If someone already has a brick-and-mortar restaurant, they can add a cloud kitchen and this will allow them to increase demand and boost branding.
5. Increased Reach
Traditional restaurants get to attract an audience from only one area. However, when it comes to cloud kitchens, the marketing and delivery channels are wide and far-reaching. This gives a greater exposure, offering new areas of targetted audience and eventually strengthening the brand identity.
What are the Disadvantages of Cloud Kitchens?
At par, we have seen the far-reaching benefits. But like everything has pros and cons, and cloud business too has some disadvantages. Let’s look at some of them:
1. High Competition
The market of Cloud Kitchen has already bloomed and there are hundreds of this business in even a small area. However, you can beat the competition by choosing the right delivery partner and marketing strategy.
2. Missing Out on Walk-in Traffic
Tradition restaurants have an advantage over the cloud kitchen in that they get customers who dine in. But when you own a cloud kitchen, you don’t have the option to cater to the dine-in customers.
3. Attracting customers through Taste and Quality
When you are running a cloud kitchen you don’t have any other means to retain your customer, than to offer high quality and great taste. Restaurants and cafes get the advantage of luring customers through their ambiance.
4. Packaging and Delivery
The sole of Ghost’s business is packaging and delivery. You need to have a top-notch delivery service and packaging. Ensure on-time deliveries and the best quality of packing that ensure your food remains safe to eat.
How To Set Up Your Own Cloud Kitchen
Setting up your own Ghost kitchen will require a little investment and great planning. Here is all you need to do:-
1. Business Concept & Branding
2. Select The Location
3. Develop Your Menu
4. Choose Your Cloud Kitchen Provider
5. Hire Staff
6. Subscribe To Best-In-Class Restaurant Software
7. Choose Your Delivery Partner
8. Measure The Feasibility Of Your Business Model
9. Promote Your Business
10. Monitor Customer Feedback & Overall Operations Performance
The Bottom Line:
Ghost Kitchen, Virtual Kitchen, or Cloud Kitchen, you call it anything but we all are familiar with this concept. When we order on Zomato or Swiggy we get to see some of these. If you are planning to start your own business, analyze the pros and cons and have a great panning. Start your business with very low Cloud Kitchen costs.
Also read our blog: Mouthwatering Tacos Recipe to Try at Home