The cloud kitchen business model aims to
fulfill consumers' craving for fresh and hot meals through doorstep delivery.
It is also known as the "ghost kitchen" or "virtual
kitchen" as they don't have physical visibility to the consumers.
The cloud kitchen needs to have a lavish setup
online, helping to attract food lovers to have their food delivered to their
doorsteps. Are you searching for a guide to starting a cloud kitchen business
and want to know which cloud kitchen business model is best to choose? This
blog can help you have every detail on-hand.
The cloud
kitchen market globally was valued at
$29.4 billion in 2020. The market is expected to reach around $112.7 billion by
2030, growing at a 13% CAGR between 2021 and 2030. With growing online food
delivery demand, cloud kitchen is gaining popularity among establishments. The
concept is meal delivery-oriented; business owners don't provide spaces for
dinners to dine in.
Source: (Allied
Market Research)
Cloud kitchen, ghost kitchen, or dark kitchen
are similar words. They all have the same thing: meal production built
exclusively and optimized for food ordering and delivery, where there is no
dine-in area. Before developing a cloud kitchen or working via this kitchen,
it's advisable to learn about the cloud kitchen business model.
What is Cloud Kitchen?
A cloud kitchen is a digital space used to
prepare meals specifically for delivery orders. This concept acts as a virtual
restaurant with no dining space. There are lots more names given to the cloud
kitchen concept, including:
- Virtual Kitchen
- Ghost Kitchen
- Shared Kitchen
- Virtual Restaurant
- Commissary Kitchens
- Dark Kitchen
- Shadow Kitchen
Let's understand the concept of a cloud
kitchen. Have you ordered hot meals online that you like? Do you need to go to
the space to dine in? Are you surprised to find no people sitting in front of
the establishments? It's a place that provides the delivery-only option; this
is where cloud kitchen comes into the spotlight.
Source: (ResearchGate)
The cloud kitchen market contributes around 200
million dollars, and the revenue of
the online food ordering and delivery market is expected to jump higher in the
future.
Source: (ResearchGate)
The restaurant that offers an online option
works on a cloud kitchen business model. So you can follow the same flow for
your delivery business to drive more customers and bring more profit to your
establishment.
Benefits Cloud
Kitchens Provides for Your Establishment
The cloud kitchen business model is very
beneficial and helps brands to experience 30%
revenue growth. Let's have a quick
look over cloud kitchen business benefits:
- Overhead costs/lower investment;
- Competitive pricing
- Manage and run multiple brands smoothly
- Shared kitchen for various businesses
- Easy to start a business
- Improved efficiency
- Menu flexibility
- Scalable
- It helps to build trust
Understanding the dark kitchen business model
can help you know how much scalability this concept provides. No matter how
small you want to start, you can quickly scale up your business easily. Looking
at the growing popularity of cloud kitchens, it is a wise choice to invest in
the dark kitchen concept. Check the demo to know how it works: https://whitelabelfox.com/food-ordering-app-live-demo
Top Examples of Cloud
Kitchen Startups to Look into!
There are lots of examples of successful cloud
kitchen startups; these include Behrouz Biryani, Fassos, Oven Story, Firangi
Bake, Sweet Truth, Mandarin Oak, The Good Bowl, MOJO pizza, EatClub's Box8,
Swiggy, Foodpanda, and Zomato.
Which Business Type
Can Choose to Go Ahead with the Dark Kitchen Business Model?
There are lots of business types for which you
can consider the dark kitchen business model, these includes:
- Catering business
- Restaurants offering takeaway/delivery option
- Meal-kit offering or preparing companies
- Food truck business
- Packaged food sellers
- Home-based food business
- Tiffin service business
You can consider many business types to start
your cloud business in today's competitive market.
Primary Idea Behind
Ghost Kitchen Business Model
The idea of ordering and delivery only
facilities is not new. Seamless and Grubhub have been operating almost 10% of
their New York-based business from cloud kitchens since 2015. With the pandemic
and lockdown spread, customers' dining habits have changed. More people now opt
for online food ordering rather than dining out.
Moreover, the dine-in business gained massive
popularity due to pandemics, and the on-demand and ghost kitchen business model
saw a surge in demand. Food delivery startups such as Swiggy, UberEats, and
Zomato saw a significant jump in recent times.
It has accelerated its growth plans by
including ghost kitchens in its portfolio. This has also accelerated the growth
of cloud or dark kitchens. Today, most companies might run more than one cloud
kitchen to deal with different cuisines out of location.
Customers of Virtual
Kitchen Business Model: Check What Value it Offers to Them?
Gen Z and Millennials are conditioned to
technology-enabled convenience. They demand a variety of food quality but don't
have enough time to spend time cooking themselves or go physically to eat hot
meals. They are ready to pay increased service charges that come with dine-in
options.
And here is where cloud kitchens come into the
spotlight. Combined with an on-demand economy, they offer an effective solution
that is tailored to the requirement of the targeted audience. It provides
excellent value to customers like:
- Customers get meals with few simple clicks;
- It is less costly than a dine-in alternative
- There are lots of cuisines to choose
- The process is easy and simple
- Operational 24*7
- Customers get hassle-free payment options like Credit
or Debit cards, internet banking, UPI, etc.
Cloud kitchens target to garner an outstanding
share of youth and professionals willing to spread high-quality meals delivered
to their doors. The cloud kitchen targeted those customers who love to enjoy
hot meals out of their house and depend heavily on third-party apps for meal
delivery.
Top Cloud Kitchen
Business Model: Check Every to Find the Best One
Cloud Kitchens or ghost kitchens have grown
huge in popularity these days. They offer lots of benefits over the traditional
dine-in restaurant campaign. There are lots of ways to operate cloud
kitchens.
It can range from delivery-only brands to a
restaurant kitchen that is operating a purpose-built commissary kitchen housing
various brands. Moreover, the main reason for the virtual kitchen's success is
its ability to generate significant money through its business models. Let's
explore different cloud kitchen business models to find the best one.
Independent Cloud
Kitchen
This model is perfect for those who don't want
to own a physical establishment. With the growth in online meal delivery,
independent cloud kitchens also grew faster. It has a single brand that
prepares meals based on online orders. Kitchens can focus on a single cuisine
in this concept. It's a self-sufficient business model for acquiring orders and
delivering packed meals.
Multi-brand Cloud
Kitchen
This business model was first introduced by
Rebel in 2011. The multi-brand cloud kitchen is slightly complex and employs
information to build a business approach. It's primarily based on an assessment
of food trends in a specific location. Shared commercial kitchens are used to
prepare and pack meals. It's an efficient model that makes profits while
decreasing operational costs.
Hybrid Cloud Kitchen
A combination of a cloud kitchen and takeaway
restaurant is known as a hybrid cloud kitchen. It operates as a cloud kitchen
but also has a store where food lovers can visit to collect their meals. The
hybrid model employs a single brand in only one kitchen. It has multiple
walk-in outlets that offer delivery and takeaway services for meal orders.
Co-working Cloud
Kitchen
Entrepreneurs make a great living by leasing
out space to other cloud kitchen business owners. Physical space is rented to
third-party brands, which acts as an incubator or co-working space for cloud
kitchens. The business owner acts as a landlord instead of a business owner.
Additionally, the establishment provides supplies and utility services that
make cloud kitchens operational.
Delivery App-owned
Cloud Kitchen
The company with an all-in-one
delivery app leases a kitchen
space and allocates it to different emerging meal brands. Those food delivery
apps manage online orders and delivery fleet as well; the food brand and
delivery app have a symbiotic relationship in the delivery app-owned cloud
kitchen delivery model. This model is used by food aggregators apps like Swiggy
and Zomato.
Fully Outsourced Cloud
Kitchen
It is a novel concept, a fully outsourced
cloud kitchen was introduced by Kitopi, a food delivery aggregator. Food
preparation is delivered and outsourced to the kitchen. The chef adds the
finishing touch, and the order is delivered to customers' doorsteps.
Shared or Commissary
Cloud Kitchen Model
In this model, multiple brands take a
commercial kitchen space for rent. In the shared or commissary cloud kitchen
model, multiple businesses operate under the same roof. Cost is comparatively
less as a person takes space on lease with other establishments instead of
giving an entire place on rent.
Aggregator Model
Those who are interested in earning on a
commission basis can consider an aggregator model for their cloud kitchen
business. In this model, the business owner provides an online food delivery
app to cloud kitchens to facilitate them to accept orders and manage delivery
efficiently. The business owner doesn't own these kitchens; they charge a fee
from the kitchen owners for selling food on their platform.
Now you might have understood each cloud
kitchen business model well, so now it's time to start your cloud kitchen
business and make money. If you're looking to launch your dark kitchen, White
Label Fox can help you with the same. Check price quotes: https://whitelabelfox.com/online-delivery-service-app-price
Dark Kitchens Revenue
Model: How Does it Make Money?
The dark or cloud kitchen revenue model is not
much different from other delivery business models. They generate sales from
food orders. It also helps brands to earn revenue based on subscriptions. For
example, food lovers who choose the subscription from cloud kitchen for meals
can pay at regular intervals, including weekly or monthly. Additionally, cloud
kitchens that have independent operations can charge delivery fees from
customers.
Steps to Follow to
Start Your Cloud Kitchen
There are a few steps that you need to take
into consideration when you are thinking of starting your dark kitchen, these
includes:
- Pick a location
- Don't forget to get a license
- Launch your cloud kitchen online with the right tech
partner
- Hire professionals as per your business requirement
- Partner with the right vendors
There is a lot more to consider when you are
thinking of starting your ghost kitchen; ensure to complete step by step
process to eliminate future hassle.
Cost to Launch Your
Cloud Kitchen
Launching your ghost or virtual kitchen is not
a quick affair. There are numerous things to do and pay for. The cost of
starting a cloud kitchen depends on multiple factors; these include:
- Location you choose
- Payment for cloud kitchen software
- Electricity and taxes
- Platform and technology choices
Many factors affect the cost of launching your
ghost kitchen. The Cloud kitchen business model enables individuals and
startups to start a food business at a lower cost. Now you don't need a
full-service restaurant to provide your delivery service; just get a delivery
app and start offering your business service online.
Food companies are opting for the cloud
kitchen concept as it helps them to provide amazing service to food lovers on
their demand. However, it enables establishments to acquire customers across
boundaries.
Bottom Line
Cloud kitchens or dark kitchens are disrupting
the food industry as more customers are increasingly shifting towards ordering
food and delivering it to their space. However, establishments have a
stronghold due to their dine-in experience; virtual or cloud kitchens are
emerging as powerful competitors due to their variety and convenience.
Undoubtedly, cloud kitchens are here to stay.
They have started capturing the piques investors' interest and market. If
you're also looking to grab the opportunity, White Label Fox can help you with
the same. Specify your requirement, and we will help you to make your dream
come true, contact us today at sales@whitelabelfox.com.
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