Cloud Kitchens, likely to be a new way forward for restaurant and business owners alike. A not-so-new concept but made popular with the rise of the ‘COVID 19’ pandemic, Ghost kitchens or dark Kitchens, is said to have originated back in 1889 in Italy, where restaurant delivery meals emerged. The onset of it, however, took up in the ’90s with the world wide web.
New Culture in North East and other parts of Guwahati
With that in mind, Guwahati, although a distant place from Italy, has always seen people with interests’ in culinary art forms try to start a business by initially starting with food trucks and small cafes. With the hit of the global pandemic, which seems bad for business as people have avoided dining-in in restaurants which directly impacted sales; most people around the world have hit gold with a new business model in culinary specialties with the help of delivery partners such as Zomato, Uber Eats, Deliveroo, etc.
In foreign countries such as the US, UAE, UK, and EU, we have heard of well-organized “ghost-kitchens”, like Cloud kitchen, Kitopi, and so on, on the rise. Offering kitchen spaces to restaurants and start-up business owners so that brands and restaurants alike can keep up with their business as times and circumstances change to dire straits. These so-called Cloud Kitchens are a meal preparation outlet that only focuses on ‘delivery-only meals’ with no sitting capacity for walk-in customers. This results in restaurants and franchises reducing the expenses in renting huge spaces and maintaining a large staff.
In light of this “business model”, we in India aren’t as far behind with the entire concept of the business. Many businesses in Guwahati itself, deliberately or not, often start in this manner to test the depth of the water there to swim in. Thanks to the rise of delivery services like Zomato, Uber Eats, Swiggy, and independent businesses providing their delivery services. Assam’s outskirts towns are deprived but we can’t say that business owners aren’t vaguely aware of this business model in some form or the other since we do see a businessman or two try it out. We have already seen businesses such as ‘Stayfit Kitchen’ in Guwahati implement this idea and are still running strong enough to open different outlets to reach wider customers.
Growth of Cloud Kitchens
The nature of Cloud Kitchens business model is set to make this business very lucrative in the future, primarily due to two reasons. Firstly, they allow restaurants to deliver straight to customers at home. Secondly, they operate in a fraction of traditional restaurant space, utilizing resources more efficiently through optimized kitchen workflows. Other factors such as the model being driven by technology and so the businesses’ can be instantly altered to cater to their customers as they seem fit for the best outcome and long term. The faster and better a business can understand the technologically based relation it has with the customer and the delivery partner the faster the “Return-Of-Interest” would be.
Restaurants, on the other hand, will increasingly explore D2C channels (Direct-to-consumer) in 2021. A growing percentage of their orders already come from direct channels. This is a shift coming on the back of a change in customer behavior and lucrative deals restaurants offer to customers on orders from their owned channels.
Cloud kitchens will help create an efficient connection to some of the D2C channels such as websites, social media, and messaging platforms that will allow restaurateurs to set up their digital storefront, customize the guest experience, save commission charged by aggregators and manage online orders, ultimately enabling them to adapt to a new normal of dining. Also, restaurants are constantly looking for ways to control their operating expenses, such as electricity costs, rentals, and staffing expenses.
In such times, a blend of business models is something that can potentially be an innovative business model to explore for fine-dining restaurants. The model combines elements of both dine-in, delivery, and takeaway into one experience. The emergence of the fast-casual category is an excellent example of this strategy; they offer quick service with a casual restaurant, combining speed, and convenience with the experience of dine-in and managed delivery.
So, according to a report by RedSeer Management Consulting, with cloud kitchens set to be a $2 billion industry in India by 2024, up from $400 million in 2019; by exploring investments in ghost kitchens and building an efficient delivery setup, the business model will potentially increase unit growth not only to fill the void left by closed restaurants but safeguard it against a volatile industry.