Isn’t it surreal to think of starting a restaurant business without planning to offer dine-in? Yes, you guessed it right. I am talking about the recent buzzword cloud kitchens, aka Ghost kitchens. The concept of cloud kitchens has stuck with the world in recent times. And for anyone who’s been lately thinking of trying your luck in the restaurant industry, this could be your triumph card.
The rise of cloud kitchens:
As the pandemic expanded its tentacles, the food industry was the first to suffer. Restaurants had to shut their dine-in services and stuck to take away options. That’s when the cloud kitchens started to thrive. Slowly many such restaurants began to conquer the top spots in the food ordering apps. To much of everyone’s surprise, a few new ventures appeared on the list. How did they manage to grow amidst the pandemic?
A report from CRISIL shows that dine-in restaurants have seen a drop in 40-50% of their revenue in the pandemic period. Cloud kitchens have as well seen a dip in their revenues of up to 30% during the initial months of the lockdown. However, they recovered quickly from the fall. Not having to pay rents for dine-in and parking spaces, these restaurants had little to lose.
Although the concept of cloud kitchen model restaurants is not new to the food industry, their growth has been exponential during recent years. Research shows that India alone houses 5000 cloud kitchens. And the numbers are expected to grow at the rate of 50-60% in the future.
Cloud kitchens as a small business:
For many of us wanting to get into a restaurant business, affording commercial spaces for dining and parking has been a concern. Whereas starting a cloud kitchen-based model restaurant doesn’t attract such costs. And it is beneficial in many ways. Its advantages could possibly explain why it is a potential small business idea.
Advantages of cloud kitchens:
- Low Operational Cost: As we all know, it saves real estate costs. If you have the capital to afford a kitchen space and inventory, that would be enough. However, you would still have to spend on labour and operational cost. But the silver lining is, you are saved from paying high rents.
- Competitive Pricing: Competitive prices attract customers. As you save up so much on operational costs and real estate, you could use a part of your profit margin to offer competitive prices.
- Expand your territory with ease: Being a business whose success depends on its online visibility, reaching out to customers far from your location is so easy. Unlike conventional restaurants, expanding a cloud kitchen model is easy and less expensive.
- It is the best time to be in business: The post-Covid-19 period is favourable for cloud kitchen models. Above all, we are living in a digital age. People prefer to order food on apps rather than visiting the facility. And the online food aggregators market is expected to grow consistently. So is the future of cloud kitchens that rely on these apps for business.
A survey shows that around 67% of the restaurateurs would prefer cloud kitchens as their next investment. Times are changing, so are the restaurant business models. This could be your next best investment.