The reality of the situation today is that many traditional restaurants are floundering or folding up permanently. Based on the analysis and the evaluation of the market in a post-Covid-19 world, it is estimated that the size of the food delivery market is expected to be about $8 billion by 2022 with a healthy double-digit growth rate every year. A key contributor to industry is the business model from startup companies, ‘the cloud kitchen.’ -
So what is a cloud kitchen?
A cloud kitchen is an innovative business that streamlines the preparation of meals with the power of ubiquitous apps to enable delivery without a dine-in or takeaway option. Restaurants around India have been leveraging the delivery option for decades without food apps. But cloud kitchens ‘deliver’ on their promises in a unique manner.
Cloud kitchens let you roll out multiple food brands to cater to the different needs of the customers. The owner of the cloud kitchen chain ‘Faasos,’ Mr. Jaydeep Barman, who also rolled out cloud kitchens for ‘Behrouz Biryani’ and ‘Oven Story’ believes that the power of the cloud kitchen lies in its flexibility. It creates opportunities to produce new brands with a focus on marketing, and minimal captial expenditure. With a new brand, & a new story, customers get enticed into trying the product, even though it might be produced from the very same kitchen. The key takeaway here is that: there is no absolute limit to how many brands you can launch through a cloud kitchen.
Equally important to note is that the price that all players pay for the rent of the cloud kitchen falls around a low CapEx - approximately 1/3rd of the investment required to open a restaurant. A low investment does not stop cloud kitchens from achieving their target goals.
But before you say you have the DNA to run the operations in a cloud kitchen, remember that for investing in a cloud kitchen unit, consistency is key, and a crucial part of consistency is automation. Easier said than done!
When a cloud kitchen business is set up, new players MUST work out the cash-burn for 8-10 months to 2 years max, as that is the time it takes for customers to start noticing a new listing on aggregator apps, provided that digital efficiency is maintained. Imagine how you would tough it out when all you have is a kitchen and no customers; or rather, people who live in a virtual world and don’t know your brand exists.
All you have is the power of the cloud to find customers in your vicinity; of course, it is very hard. Once you do have customers, isn’t it hard to go to each and every partner portal and update stock for items? Finally, did you know it costs a business about 5-10X more to acquire a new customer than it does to sell to an existing one? But with UrbanPiper’s powerful integrations layer, all of this can be maintained very seamlessly.
Take your online business full-throttle across all aggregators. Get orders from aggregators such as Swiggy, Zomato, UberEats, Foodpanda, Dunzo directly into your POS, stay on top of new features introduced by the aggregator to stay ahead of your competition, and take advantage of a 360-degree analysis of your complete online business for you to draw key business insights.
Cloud kitchens are certainly the kitchens of the future and you can expect them to drive innovation in the restaurant industry for years to come, but for this industry to prosper, it is imperative that they take advantage of solutions provided by food-tech experts such as UrbanPiper. UrbanPiper is trusted by 10000+ restaurants across the globe including Pizza Hut, McDonald's, KFC, Subway, Taco Bell, and many more. Further, it powers successful cloud kitchens such as WarmOver, KaatiZone, Box8, InnerChef, Mojo Pizza, Maverix, and others.