Are Cloud Kitchens the Smarter Way to Run Your Restaurant Business?

Taking a leaf out of the Internet first restaurants such as Yumist, HolaChef, Petoo, etc, several restaurants are now shutting down outlets, and moving towards cloud kitchens. Mast Kalandar has shut down its restaurants in two of the four cities it was operating in, and Ammi’s Biryani has converted some of its outlets into cloud kitchens to cut down on the cost.

A cloud kitchen is basically a takeaway outlet that provides no dine-in facility. They function as a production unit with a space for the preparation of food.  The food can be ordered online, hence, the name cloud kitchen.

Stiff competition in the restaurant industry, along with decreasing margins result in the shutting of restaurants as they are not able to cover their costs. It has been noted that the number of dine-in customers has decreased significantly over the last few years, with customers mostly opting for home delivery of food.

Also Read: How To Open A Cloud Kitchen Restaurant

As the number of delivery orders increases, restaurants are now moving towards cloud kitchen operations. According to a report, the market share of delivery restaurants in 2013 was 15%. The rise of food tech startups has made it much easier for consumers to order and pay for food online, thus increasing food delivery orders. Currently, the market share of delivery orders is 35%. The market size of cloud kitchens is expected to reach Rs 300-400 crores by the end of 2016.

Cloud kitchen restaurants focus on maximizing the number of orders per day, by focusing on mass production of food and decreasing the overall production and packaging time. Restaurants are now also looking to automate the preliminary aspects of food production to cut down time. This would be achieved by adopting the Hub and Spokes model and Central Kitchen Management. Food is prepared preliminary at the central kitchen, called the Hub, and then delivered to the spokes, or the food outlets, where the remaining cooking is done.

Are Cloud Kitchens the Smarter Way to Run Your Restaurant Business?

The packaging of the food is also an important aspect of food delivery, as they take about 25% of the time. Food businesses are also looking for tools and methods to automate and optimize packaging.

Source: Economics Times

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