Cloud Kitchens - Everything that You Need to Know
- Date: 10 Jan, 2020
The food industry is in a constant state of evolution. Every day, people come up with unique concepts and unconventional ideas. These differ vastly from the traditional definition of a restaurant we’ve been familiar with all our lives.
In the last decade or so, one of the more popular trends in the Food and Beverage Industry has been opening up Cloud Kitchens. You might have read about Travis Kalanick betting big on cloud kitchens.
What is the basis of this? On demand. People prefer ordering food from their living rooms rather than stepping out of their houses just for a quick bite, cloud kitchens are the perfect fix.
Now, What Exactly Does a Cloud Kitchen Mean?
A Cloud Kitchen is a restaurant that operates almost entirely online. It does not offer a dine-in place to its customers. It is a commercial kitchen where dishes are prepared and then sent off for delivery. There is no seating arrangement or takeaway. Customers can order food from these Cloud Kitchens online- through websites, third-party apps or the cloud kitchen’s app.
When the advent of Cloud Kitchens began, it was seen as a highly unconventional business model. Compared to running a full-fledged kitchen and restaurant, operations are much easier to deal with, customers are happier and costs are much lower-these are just some of the advantages of having a Cloud Kitchen.
Why Should You Open Up a Cloud Kitchen?
You might be a little hesitant to opt for a business model like this one. After all, it is extremely different from conventional restaurants that are out there. Not everyone is familiar with this concept. But the truth is that Cloud Kitchens offer a plethora of advantages.
High rental costs, expensive staff management, processing orders are all some of the difficulties that restaurants face on a daily basis. With a Cloud Kitchen, the burden of these issues is enormously reduced.
- Lower Costs
Let's face it- running a full-fledged restaurant comes with endless expenditure. You have to first pick a location in a suitable neighborhood. You need to make sure that the neighborhood is set close to where your target audience is. Then, you have to invest in finding the right décor, furnishing it with chairs and tables, getting the right lighting and so on. It is a time-consuming process and not a cheap one. Added to this are sky-high rental costs, depending on your location. And, of course, the costs that come along with paying servers, cleaners and other staff. However, with a Cloud Kitchen, you don’t have to worry about most of these factors. All you need space for is a kitchen where your equipment can be stored. You don’t have to invest in a dine-in place. This reduces the costs of utilities such as water and electricity. Next, you don’t need servers since you only have to get food delivered. Your rent will also be lower since you have to run a small space. There is also the added benefit of not having to go out of your way in finding just the right location in a fancy neighborhood.
- Higher Flexibility
While running a traditional restaurant, making changes to the current set-up can be a little challenging as well as time-consuming. However, having a Cloud Kitchen means that your entire presence is on the Internet. So, if you want to change your menu a little, introduce new dishes, raise or lower prices for certain items- it can all be done with one simple click. You don’t have to worry about printing more menus. You can constantly make changes based on what you think your customers like and don’t like.
- Opportunities for Expansion
A Cloud Kitchen is essentially just a kitchen. Customers order food from you, you prepare their dishes and send them out to them. Why not use this same kitchen for another restaurant name as well? Think about it- you can use the same space and the same kitchen equipment for more than one restaurant. So, in essence, you can run two or three restaurants from one Cloud Kitchen. You can market these two or three brands individually and avoid exorbitantly high rental costs for each of them.
- Higher Profits
If you run a Cloud Kitchen, you avoid incurring many overhead costs that one has to account for in a traditional restaurant setup. This includes paying staff as well as water or electricity bills. When you don’t have to pay for these expenses every single month, it leads to higher profits for your business. In this way, running a restaurant becomes much more feasible in the long run too. When you have higher profits, you can invest more money in expansion, marketing or simply offering better prices to your customers.
- Quick Service
If you have a successful business in the running, you can open Cloud kitchens in various locations all over town. These locations are based on where you expect to generate the most traffic from your target audience. If your presence is in different hubs, it makes service much quicker- which ultimately leads to more customer satisfaction.
- Data Collection
You have to rely on different kinds of technology if you want to run your cloud kitchen well. This means having a strong online presence that most people know of and increasing your reach on food review sites as well as third-party apps. Your website and app need to be as customer-friendly as possible. Given that maximum interaction with customers is through these apps, it becomes much easier to collect information and compile it to make future operations better. You could also use this data to market yourself in more efficient ways.
Cloud Kitchen is the answer to the lazy modern day consumer who prefers to sit at home and order rather than stepping out. It enhances the customer experience by simplifying the dine-in process. Whether cloud kitchens are here to stay is something that remains to be seen in the coming years. Over to you!