Emergence of cloud kitchens post-Covid
The lockdown led to the closing of offices and other places of employment, the shutdown of restaurants, and the widespread move to work from home.
In addition to the lack of domestic help owing to Covid-19 limits, these circumstances boosted takeaways and the home delivery model, bringing food closer to diners in the comfort of their own homes. Indeed, food technology saved the city restaurant business.
According to a recent Red Seer Management Consulting analysis, cloud kitchens will be worth $2 billion by 2024, up from $400 million in 2019. So-called cloud kitchens are commercial kitchens that exclusively accept delivery orders via their own app or third-party platforms like Swiggy and Zomato.
As a result of these third-party apps, restaurants can easily transport food right to their customers' doorsteps in Tier 2 and Tier 3 cities. Restaurant operators have joined on board, hoping to expand their customers by using app-based meal discovery and delivery.
Cloud kitchens, also known as virtual restaurants, are gaining popularity due to inexpensive capital investment, short turnaround time, low overhead, focused client conversion, and low marketing expenditures.
To be lucrative, a cloud kitchen business requires large order volumes and tailored marketing to attract targeted diners. Also, the service provider must plan their approach for a certain audience and design a menu accordingly, while maintaining food quality and presentation. Above all, client feedback and concerns should be tracked.
Because technology aggregators charge large royalties, cloud kitchen operators on third party application platforms must scale their businesses to survive. Due to the D2C business model, brand loyalty and client retention are significant corporate considerations.
Food service provider aggregation applications are now limited to offering technical platforms. Diners must be reminded to order from kitchens or restaurants that fulfil basic food safety and cleanliness requirements, as well as their USP, and have the relevant certificates and standard operating procedures.