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Is the Growth of Cloud Kitchen Bound to the COVID-19 Pandemic?

by Emma Lewis - 14 Dec 2021, Tuesday 269 Views Like (0)
Is the Growth of Cloud Kitchen Bound to the COVID-19 Pandemic?

From regular meals to Chinese and Italian, cloud kitchens have taken a new pace in catering to the public demands. Moreover, the desire to get hot tasty food within 25-30 minutes is rising globally. The cloud kitchen concept ensures safety and convenience for both service providers and consumers. 

Foodpanda, a prominent food delivery platform, signed a pact with Rebel Foods to enhance revenue streams and help other service providers.

Reasons why cloud kitchens are growing in popularity

The initial cost to set up a cloud kitchen is significantly lower than establishing a restaurant. In addition, business owners face fewer barriers than traditional systems. Cloud-kitchen does not include dining facilities, so the business owners need not maintain an excellent interior to attract the audience. In addition, the concept offers flexibility to track the statistics and acknowledge what factor is providing success. 

The cloud kitchen business gained significant traction during the pandemic. But the question arises, will this industry continue to grow even after the pandemic? The answer is yes. The Cloud kitchen market might be growing rapidly during the pandemic, but it will keep rising even after the pandemic. Pre-COVID, companies like Deliveroo and Uber Eats have witnessed an abrupt rise in demand for food deliveries. This estimates that the concept of cloud kitchens has been in demand pre-COVID. 

Technology fueling the industry growth:

Technology has been a prominent reason behind the growth of cloud kitchens. Cloud technology helps establish effective communication between service providers and consumers. Moreover, it enables cloud kitchen operators to obtain information about consumers' likes and dislikes. Furthermore, it is essential for third-party service providers to acknowledge the needs of companies. As a result, companies are developing favorable solutions to boost their growth. For instance, Door Dash is an American company that offers online food ordering and food delivery platforms. The company recently launched the Restaurant Advisory Council (RAC), a program to gather feedback from restaurant operators about functionality, policy, and upcoming launches.

Through this, the service providers can get a chance to attain 100% consumer satisfaction which will fuel their revenue generation. Such factors will fuel the industry's growth even after the pandemic. 

Considering the future potential of the cloud kitchen market, businesses are investing highly in the industry. Moreover, companies are also introducing innovative schemes and brands as their private labels, which are forecast to continue in the coming years. In 2017, Swiggy, a good delivery platform based in India, launched Swiggy Access. The aim of this initiative was to help restaurants operate delivery-only kitchens even in locations where they do not have access to operations. Through this model, the company is providing free real-estate infrastructure to restaurants. The charges will be made through the revenue-sharing model.

Internet Penetration: The advent of the internet has helped businesses gain a large consumer base with fewer expenses. The use of online platforms has become a new normal for the majority of the population. Recognizing the potential of the technology, companies have begun their promotion on social media platforms. Considering this, cloud kitchen market players strategize the promotion of services. In addition, it offers users a platform to share their reviews related to their likes and dislikes. 

Recently, the Triffle Dal Bukhara, a dish by Junglee Kitchen, went viral. As a result, the popularity of the business increased significantly. 

Cost-efficiency:

Cloud kitchens cost much lower than traditional restaurants. The installation and maintenance cost associated with dining restaurants is higher than the cloud kitchens. It is the prominent factor that will boost the market growth in the coming years.  Moreover, the concept has also helped women globally who were earlier catering to the limited circle.

Safety of customers

COVID-19 has developed significant panic amongst people around the globe. COVID-19 is contagious, which has raised awareness about social distancing among people. Due to this, customers had no choice but to stay at home. In addition, governments of various countries implied stringent restrictions prohibiting dining services. Thus, several businesses started offering cloud-kitchen services to survive in the market. This era is expected to grow further due to rising awareness about social distancing and the convenience of services. 

Enhanced customer services

Cloud kitchens offer faster home delivery services. Moreover, efficient food delivery applications offer affordable coupons to users. As a result, the market players will witness favorable growth opportunities in the coming years.  In addition, customers can also order food from their favorite restaurants by using third-party applications. Panda, a China-based cloud kitchen platform, has opened 103 kitchens by considering the benefits of cloud kitchen. 

The cloud kitchen has helped businesses or consumers. As of now, the sky is the limit for this thriving industry. Players in the industry are introducing innovative solutions to boost their revenue and help other businesses. For instance, Deliveroo unveiled a team named “Restaurant Revival Team.” The aim of this initiative is to list down restaurants that have closed or are suffering from any financial difficulty. This team will further help these businesses to reset their businesses.

???????Future Potential

According to Astute Analytica, the global cloud kitchen market is forecast to grow significantly at a compound annual growth rate (CAGR) of 13.4% during the forecast period from 2021 to 2027. 

The cloud kitchen market seems rapidly growing in Asia-Pacific, in which China and India make up most of the revenue. The high consumer base and presence of prominent players are driving the growth of the region in the market. 

Swiggy and Zomato have been inevitably growing in India. The companies are witnessing a growing number of app installations on a regular basis. 

Starbucks and Alibaba signed a pact to operate Star Kitchen and offer services to the population of China. The partnership between these companies aims to cover delivery, a virtual store. Apart from that, companies like Kitchen United, Rebel Foods, DoorDash Kitchen, Ghost Kitchen are some of the prominent players thriving in the market.  Recently, Kitchen United announced that the company acquired Zuul, software solutions, and ghost kitchen developers. This first acquisition made by Kitchen United will help the company expand its portfolio and bolster its growth in the market. This deal is forecast to transform Zuul’s ghost kitchen facilities into a Kitchen United MIX kitchen center.