Everyone in the world knows India as the BreadBasket of the world. The total agriculture commodities export of India was US$ 3.50 billion in March–June 2020. Crazy number, right? Imagine how much the country would be producing and consuming if it can export such a large amount of agricultural produce. With an abundance of food resources but space constraints, it needed a revolutionary idea that could boost up the Food Industry, and that gave rise to the “Cloud Kitchen”.
What is the Cloud Kitchen Business Model?
Firstly, let us understand what a cloud kitchen is: Cloud kitchen is an innovative concept that is gaining ground rapidly in the F&B industry. It is a delivery-only restaurant that has no physical space for the traditional dine-in. The food preparation happens within the kitchen, while the procurement, the sale, and the functionality are managed virtually, with the help of technology.
What are the Benefits of Cloud Kitchen?
Builds An Online Presence
The world is going digital. With the help of technology, a cloud kitchen can attract customers sitting in the comfort of their homes to try out their dishes. Also, the automation of the ordering process helps to be listed at the various food delivery apps like Zomato and Swiggy and build an online presence.
Low Investment Costs
The only real investment cost here would be the setting up of a kitchen and a smart POS system that allows you to manage the stock and inventory requirements of multiple brands with ease. That’s it! No need to set up high-cost infrastructure or wait staff. This makes Cloud Kitchen one of the most sought-after business models.
Multi Brand and Outlet Setup
As mentioned above, Cloud kitchens come with the flexibility of setting up different brands, each with its own U.S.P. and personas that define them. Along with it, they can also set up different outlets and provide franchise rights to generate more revenue.
How Do You Run A Cloud Kitchen Restaurant?
Managing a Cloud Kitchen Restaurant is easier said than done. Though it may look lucrative on the monetary front, you must run it efficiently to reap the profits. Let us guide you to 3 important steps you need to take care of while running a Cloud Kitchen.
- Setting up a standardized process for procurement of raw materials
The most important aspect of cloud kitchen is the food. The quality of the food holds more weightage here due to the fact that there’s no dine-in or customer experience. Customer retention only happens if they like the food. Hence, there must be standardization in the procurement of raw materials so that the quality and consistency remain the same.
It will also help you on the supplier side as building cordial business relationships with the vendors can help you facilitate timely deliveries, quality products, and the best services possible.
- Automation Of Technology
The order collection in a cloud kitchen is similar to a standard ordering process. Just that instead of manually collecting the orders, the customers go on a designated food ordering app to place their order.
Accepting and managing the orders becomes a hassle since each online food aggregator provides an individual tablet for order-taking. It is virtually impossible to keep up with different orders pouring in from various sites without a POS. Hence, the business requires an efficient POS system to be set up for the smooth running of the business.
- Quality Staffing And Management Of Inventory Levels
Due to takeaway orders, there’s no dine-in facility available at the outlet. Because of this, there’s no need for the wait staff, but it does require a highly efficient and skilled kitchen staff to optimize the management of the multiple orders within the same kitchen space.
The cloud kitchen model gives the business the flexibility to launch more than one brand using the same kitchen infrastructure. However, the kitchen space used for all the different brands is the same, and hence, maintaining the inventory levels is necessary to prevent stockouts or overstocking.
What Are The Challenges While Setting Up The Business Model?
The Number one challenge is to get your phone ring, and getting people to order from you. Where there’s a lucrative business set up, there ought to be competition and that makes customer acquisition one of the most difficult things.
What works for you, might go against you as well. With the kitchen your only area where you need to spend, you can’t attract customers based on the ambiance or dining experience. Hence, you need to be highly proficient in serving the best food to retain your customers.
Having a Unique Selling Proposition (USP)
If you try to emulate what others are doing, you are most likely to fail. You have to be different and be an out-of-the-box thinker to acquire the market proposition. This will only happen when you have a strong USP that guarantees you customer visits standalone.
While there are challenges in the way, Cloud Kitchen is still one of the most rising business models. Just overcome the challenges, make “Serving a Purpose” your primary objective and the monetary success will follow. We wish you Goodluck in your Food journey, cheers!