Concept and Introduction:

Cloud kitchens are also called ghost or virtual kitchens that are basically in an online mode, working commercially using third parties to complete their services. They use such parties to receive orders, place them, and deliver them. These kitchens do not include any dining services and they work completely on an online basis and use online platforms to reach the people. In a cloud kitchen, different restaurants and cafes can work or operate simultaneously.

For customers to order the food there are different online platforms like delivery apps or you can directly call such places and place their order on an on-call basis. The cloud kitchens prepare and package and deliver the food products. Delivery is done either through in-house logistics or through a third-party service.

When we hear of cloud kitchens, the major and primary difference between a cloud kitchen and a traditional modern restaurant is that they have a physical store where you can come, dine in and hang out and the services are offline as well as online whereas in cloud kitchen the operation is online and they only work on a delivery mode. These cloud kitchens give you the benefit of a delivery model so that you can enjoy the food in the comfort of your home at any time of the day.

They are frequently referred to in Silicon Valley’s pop culture, are small shared spaces that are meant for cooking food which makes them economically affordable as compared to other restaurants. These spaces are rented by food chains, restaurants, and chefs to boost their businesses by helping them locate their operations in close vicinity to their customers. The ghost company was started by Diego Berdakin and EarthLink founder Sky Dayton in 2015. Travis Kalanick, the co-founder of Uber, bought control of the company in 2018.

Evolution (cloud kitchen - past and future):

History: This well-known concept of cloud/ghost kitchens was traced back in the early 90s when the food truck services commenced. During that time, food trucks and vans began to gain a large amount of popularity among people since they were convenient, all time available and affordable. These trucks used to maintain their placements near areas such as universities, colleges, companies, etc where high traffic was popular at almost every hour of the day.

A while later, when delivery companies started to flourish, there was a surge in food trucks because now people could directly order at the comfort of their homes, anytime of the day and they do not need to step out. The advancement of technology and gadgets such as mobile phones and computers further increased this demand online.

Much later in the 2010s, there was a new type of food delivery service that came into the business market with a unique strategy and supply chain which were known as Cloud Kitchens. They came with specific demands related to only food delivery services. They used a concept where they build a plan to be based in industrial areas rather than homely neighborhood areas and operate with lower overhead costs, which can be passed on to customers in the form of lower prices.

Cloud kitchens quickly and specifically expanded to areas of Europe and United States and their growth is being driven by the increasing popularity of food delivery services, the rising cost of real estate, and the need for restaurants to be more efficient. Cloud kitchens are disturbing the legacy created by revolutionary online food ordering apps and is therefore in demand for the success of various businesses in and around the country and at an international level.

Future: The cloud kitchen business demand is bright and increasing widely due to a number of factors that are as follows:

• The global and international level food delivery market is expected to reach $266 billion by 2025. This market growth is being driven by the increasing convenient services of food delivery, the overly large popularity of online food ordering, and the growth of people who live in urban sectors.
• The cost of real estate in urban areas is rising, making it very difficult for big or small cafes and restaurants to open and operate in such locations. Cloud kitchens offer a more affordable and easy option, as they do not need to rent a large space for a dining area.
• Cloud kitchens can help restore the efficiency of restaurants by reducing food waste, optimizing their operations, and increasing their delivery speed.

In India, the food delivery market space is expected to increase to a reach of $100 million by the year 2025 according to the researchers and the advancement of technology plays a vital role in this success. Although cloud kitchens are still in the early stages of its development but it has come a long way and with the benefits and large number of advantages that it offers as compared to the traditional restaurants and cafes, it is expected to rise to a higher level of income and fame.

Navigating the cloud kitchen business landscape:

Navigating the cloud kitchen business landscape focuses on being aware of the challenges and advantages of this vast growing industry. Also, this is a very time-consuming and competitive business field and this particular area can be challenging but it can also result in reward if you take care of a few challenges which are as follows:

• Rising competition: Since the competition is extremely growing amongst the cloud kitchens, it is necessary that your brand stands out and makes its unique style or advantage for the customers buying from you.
• Evolving and changing: Every time there are new rules and regulations that operate and function in a business world which are required to be changed from time to time in order to develop with the fast pace.
• Adaptation to technology: The cloud kitchen business operates online and therefore the people in the market field should be prepared at every step and adapt to the new technological aspects.

Except challenges, there are also several advantages or opportunities that comes with this business which are –

• Efficiency: cloud kitchens are more efficient and reliable than traditional restaurants which provide them an opportunity to increase their demand supply chain among the audience.
• Lower overhead costs: with smaller places vans and only delivery services, cloud kitchens require less space as compared to the traditional dining restaurants and thus require low cost budget.
• New opportunities: with rapid growth and an increased change in demographics, there are opportunities for cloud kitchen businesses to expand to bigger levels and create a legacy for themselves

Success Stories:

Cloud kitchen meaning is well explained and understood to you by now which explains how cloud kitchen business operates in a modern era. Let us now have a look at some of the successful cloud kitchen businesses that have grown in the market:

1. Rebel Foods: it is India’s largest cloud kitchen company with a turnover of 400 cloud kitchens in 30 cities of the country. The company increased its funding to $300 million and is involved with some of the major investors from the international market such as the tiger global management and sequoia capital.
2. Faasos: this is a special brand that focuses and specializes in Indian cuisine. It was founded in 2011 by Ankit Oberoi and Kallol Banerjee. Faasos has over 200 cloud kitchens in over 20 cities in India. The company has raised over $100 million in funding from investors such as Sequoia Capital and Tiger Global Management.
3. Wow! Momo: Wow! Momo is a cloud kitchen brand in India that specializes in momos, a popular Chinese-Indian snack. It was founded in 2015 by Sagar Daryani and Saurabh Misra. Wow! Momo has over 500 cloud kitchens in over 50 cities in India. The company has raised over $100 million in funding from investors such as Sequoia Capital and Light speed Venture Partners.
4. Eat Club: Eat Club is a cloud kitchen company in the United States. It operates over 100 cloud kitchens in over 20 cities in the United States. The company was founded in 2018 by Andrew Rosoff and Luke Saunders. Eat Club has raised over $100 million in funding from investors such as Sequoia Capital and Accel Partners.
5. Eat Sure: Eat Sure is a cloud kitchen brand in India that specializes in home-cooked meals. It was founded in 2016 by Sahil Chadha and Abhishek Nagpal. Eat Sure has over 50 cloud kitchens in over 5 cities in India. The company has raised over $10 million in funding from investors such as Accel Partners and Blume Ventures.
6. Fresh Menu: Fresh Menu is a cloud kitchen brand in India that specializes in healthy and affordable meals. It was founded in 2014 by Ankit Gupta and Karan Singh. Fresh Menu has over 100 cloud kitchens in over 10 cities in India. The company has raised over $50 million in funding from investors such as Sequoia Capital and Accel Partners.

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