The COVID-19 pandemic has given a big push to the concept of cloud kitchens. While people had been dining out the last few decades, the trends are increasingly changing towards ordering food at home, according to RedSeer Management Consulting. As per its report, the domestic cloud kitchen market is likely to surge to $2 billion by 2024 from $400 million in 2019.

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What are cloud kitchens?

Cloud kitchens, also known as ghost kitchens, are different from the regular brick-and-mortar stores. Instead of dine-in services they take orders via food delivery apps -- Swiggy or Zomato or maybe on their own. They also have the capability to operate as multiple food brands.

Also read: GST on food delivery apps: Step out or eat at home?

The food delivery boom

In India, an average person orders 6-7 meals per month while the global average stands at 16 a month. Indian restaurant owners are trying to tap into this segment which has a huge growth potential in the coming years.

Riyaaz Amlani, CEO and MD of Impresario, told The Hindu, “The restaurants have tripled their delivery business over last couple of quarters.” He clarified that delivery is not competing with the dine-in business, and said that both the businesses have their own stakes and they could co-exist and evolve.

“When it comes to cloud kitchens, it’s the packaging that matters and perhaps the only way to enhance customer experience,” he said.

How profitable are cloud kitchens?

The National Restaurant Association of India (NRAI) recently held a workshop on cloud kitchens to help create awareness and make restaurant owners keep up with the speed of this ever-evolving industry.

Also read: Zomato IPO: Delivering the India consumer story on your plate!

NRAI chief Kabir Suri told Business Today that the revenue from delivery business is now at 40 percent while it was just 5-6 percent before the pandemic.

But not all cloud kitchens are successful. Suri said, “The biggest mistake that cloud kitchen owners could actually make is to operate multiple brands from one unit.”

He said, “Equipment used to prepare one cuisine may not be suitable for the other and the manpower should be well-trained to make sure the listed variety of cuisine comes out well.”

His suggestion to existing brands is to build a cloud kitchen vertical which is far more profitable than building a chain of brands under one kitchen.

Also read: Online food orders strong amid COVID-19 pandemic; aggregators doing well: Report

(Edited by : Shoma Bhattacharjee)