In the recent few years, the foodservice
industry has made various technological advancements in order to expand the
business worldwide. Cloud kitchen, also known as virtual kitchen or ghost
kitchen, is one of the major technological advancements that has emerged to fulfil
the growing demand of consumers for convenient food products across the regions.
Unlike traditional
brick & mortar establishments, cloud kitchen
does not require a dining area, a host stand, a bar, a waiting area, and
restrooms for employees and patrons. It is
only divided into two categories i.e. kitchen type and delivery type. It provides
food enterprises with the tools and resources that are require to prepare menu
meals for delivery and takeaway with minimal overheads. The main difference is
that in a cloud kitchen, a restaurant’s focus is on delivery rather than
dine-in.
Fortunately, the outbreak of the COVID-19
pandemic has accelerated the demand for cloud kitchens to a huge extent. The
popularity of online food delivery has skyrocketed due to the temporary closure
of all hotels & restaurants during the global lockdown. In order to
maintain the social distancing norms, people started to order food online.
Cloud kitchens facilitated this growing demand for online food delivery, which
in turn, significantly driven the growth of the cloud kitchens market.
With this drift on board, many traditional
restaurants around the world have switched to cloud kitchens with a
centralized, licensed commercial food production facility. Numerous benefits associated with cloud kitchen such as
lesser investment, increased efficiency, easy expansion opportunities, multiple
brands under one roof, and more have increased the demand for cloud kitchens in
more than one way.
According to a report published by Allied
Market Research, the global
cloud kitchen market size is registered to reach $71.4 billion
with a considerable CAGR from 2021 to 2027. North America is currently holding
the highest market share, owing to fast
paced lifestyle of consumers in developed countries like U.S., Canada and
others. The Asia-Pacific region, at the same time, is growing at a fastest rate,
due to modernization, urbanization, and increase in disposable income in
emerging economies like China, India, and others.
Moreover, the demand for cloud kitchens
will continue to increase post-pandemic as it is more convenient
for customers as well as for the restaurant workers than traditional
restaurants. Several key cloud kitchen companies are now focusing on automating the kitchens with advanced technology and
establishing solid supply chains to improve the
whole consumer experience. An advanced cloud kitchen integrates supply chain
management based on data analytics and inventory management processes that can
identify demand-supply gaps, can reduce food waste and the risk of stock out.
Also, there is a plenty of space for other innovations in terms of how food is cooked,
packaged, and delivered. The more technologically oriented a cloud kitchen
business is, the greater or faster the return on investment is likely to
be.
Furthermore, cloud kitchen is a wonderful
method for restaurant owners to grow into new markets without having to invest
much time and money in a regular restaurant. In fact, investments in real
estate and paying a premium for renting space is not necessary. While starting
a food business with traditional leases or building mortgage needs
months or years, cloud kitchens can be installed in a matter of days or weeks.
With cloud kitchen business models, the profit margins are going to be better
even if the menu items are lower priced. Here, it is worth mentioning that,
with the rise in demand for cloud kitchen, the market is anticipated to grow
exponentially in the near future.
Author
Bio
Suchita
Gupta is an explorer, musician and content writer. While pursuing MBA, she
found that nothing satisfies her more than writing on miscellaneous domains.
She is a writer by day, and a reader by night. Besides, she can be found
entertaining her audience on social media platforms. Find her on LinkedIn &
Instagram.
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