Afraid, that your investment will go up in smokes? Well, being cautious is not a bad idea, given the current climate of instability in the investment market. I know one thing for sure and that is, cloud kitchen is here to stay for a long time. It’s not some wispy concept which will blow away with a gust of wind. Cloud Kitchen is a recipe for success, only, if you sprinkle the right amount of salt!
Cloud kitchen, What is it?
Technology has reshaped the food industry a lot of times in just a few years. The most recent and proven business model to come out is Cloud Kitchen. It is a model where there is no physical dining area and consists of a primary kitchen from where the orders are directly delivered to the customer’s doorstep. The incoming orders are accepted through a dedicated mobile application or the restaurant’s website.
A cloud kitchen is like a production unit. In the sense, it just produces the orders and sends them off for delivery. In a cloud kitchen, multiple brands operate from the same kitchen space. Now, there can be different chefs for a different brand or one single chef for all brands. Again, different brands may have the same or different owners.
For instance, an outlet selling biryani decide to sell pasta. Instead of adding pasta to the menu of their current brand, they open another brand and sell pasta through the new brand. Because customers are more inclined to buy pasta from an Italian sounding brand than a biryani serving one. This will consequently increase the profits and bounce rate of the customers.
Why cloud kitchen holds an edge over other models.
- less investment needed. – It’s common sense that if the only requirement to start a cloud kitchen restaurant is a physical kitchen. Then, as a result, it eliminates the cost of setting up a dining area. Likewise, it cuts down the need to have the restaurant located in a prime area. This brings down the cost as the kitchen can be set up in a closed-off area. The total cost may come up to 5 to 6 lakh rupees.
- Fully automated. – Since this model heavily depends on delivery partners and online food ordering site. A cloud-based POS system is compulsory. A POS system will record all the transactions. It will automatically update all the records. This will eliminate the manual need of having to calculate the invoices and bookkeeping. So a fully automated cloud kitchen will save you time and money.
- Less staff. – A select number of employees are needed for a fully operational outlet. Namely, a Chef and a Sous Chef. This is due to the fact Servers and cashiers are not required for this model. There is no need for delivery agents, as these services are provided by the online food ordering companies. One thing to remember is to hire skilled Kitchen staff as the only contact between the customer and your brand will be through your food. And as a result, the food should be exquisite with no chance to complain.
- Increase in productivity from one unit. – For the simple reason that multiple brands can operate under one roof, the productivity of the kitchen increases. This is hugely profitable for the investors as one kitchen churns out so much profit by catering to different tastes and housing multiple brands. In a nutshell, one kitchen, housing multiple brands, and serving plethora of different customers is much more productive.
- A higher rate of ROI. – Well, it should be obvious by now, due to such low investments, the ROI will be high. But it’s not all walk in the park. It will take time in building up a loyal customer base and a stable supply chain of vendors.
Things to keep in mind
The type of food on offer should be according to the area the kitchen is based in. For instance, a brand should not offer western cuisine where south Indian food is in demand. The demography of the area should also be taken under consideration, before deciding on the brand and cuisine.
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