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. However, the concept is meal delivery-oriented; business owners don’t provide spaces for dinners to dine in.
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. However, 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. However, 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.
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.
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
- 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 food app demo to know how it works.
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. However, 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. However, 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 use 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. However, 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.
Those who are interest 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.
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
Additionally, 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
However, 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
Additionally, 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. However, 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.
However, 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.
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. However, 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 [email protected].