Cloud Kitchen: Meaning, Concept, Business Models, Benefits & Resources
You have probably heard about cloud storage. It allows you to store the data at an off-site location that you can access through the internet.
Cloud Kitchen is a similar concept, but for accessing the food through the internet.
What is Cloud Kitchen? [Definition or Meaning]
Cloud kitchen is a space that is used to prepare food specifically for delivery orders only. A cloud kitchen acts as a virtual restaurant with no physical dine-in space.
There are various other names given to cloud kitchen concept: Virtual Kitchen, Virtual Restaurant, Shared Kitchens, Commissary Kitchens, Ghost Kitchen, Shadow Kitchen & Dark Kitchen, etc.
Let us understand the idea of cloud kitchen with this example-
Did you ever order some food online that you liked so much and so you wanted to go to that place to dine in? And to your surprise, you found that it has no front-of-the-house setting for people to dine-in? It is a place that offers the delivery-only option. That is what a cloud kitchen is.
By now, you might be thinking that this is what the food delivery apps do. And it means that the restaurants which offer delivery option, also act on a cloud kitchen model. You are thinking in the right direction.
Let’s have a look at the simple/advanced cloud kitchen business models.
The 7 Cloud Kitchen Business Models
1. Independent Virtual Restaurant Model
It is the original and the simplest cloud kitchen business model.
- Single Kitchen
- Single Brand
- Low investment: Because no seating place to dine in and front-of-the-house staff is required.
- Suitable for: Startups, small businesses, and people who want to start a home-based food business.
2. Shared Cloud Kitchen Model
It is also known as Commissary Kitchen Model. In this type of model, multiple businesses take a commercial kitchen space on rent on sharing basis.
- Single kitchen
- Multiple Businesses operating under the same roof
- Low investment: Costs are less as a person takes space on a lease on sharing basis with other businesses instead of giving the entire rent of the place himself/herself.
- Suitable for: Startups and small businesses
3. Traditional Brick-And-Mortar Restaurant integrating Cloud Kitchen Model
This model is for the restaurants that want to expand their customer base online by offering the delivery option with the traditional dine-in option.
Based on the kitchen location, we can divide this model further into two types:-
(A) Managing delivery from the restaurant itself
In this type of business model, the restaurants prepare and serve online delivery orders from the in-house kitchen itself. This in-house offering model is helpful for the restaurants that want to earn extra incomes from the same kitchen area, staff & other business resources.
(B) Managing Dine-in at Restaurant, and Delivery from the separate Cloud Kitchen
This model is suitable for businesses that want to manage their in-house and online delivery orders at separate places. This business model is helpful because of two main reasons.
As the kitchen at the restaurant is not custom-built to cater to delivery-only orders, it can affect the order fulfillment efficiency.
During the busy hours of the restaurant, preparing & delivering the online orders and the dine-in orders at the same time can be difficult. Longer waiting times for their orders can impact the experience of both dine-in and online customers.
4. Single Brand, Multiple Cloud Kitchens Model
In this type of business model, a single brand owns multiple cloud kitchens in different areas. This model is suitable for businesses that receive online food delivery orders in bulk. For the efficient management of these orders, they use more than one kitchen to prepare the orders faster.
This model is also helpful to the businesses that offer food delivery services at many different areas/locations. By setting up cloud kitchens at the nearby location to the service area, businesses can ensure the timely delivery of the orders.
5. One Business, Multiple Brands, Single Kitchen Model
This cloud kitchen model is for businesses that offer different types of cuisines. With this model, they can sell each cuisine type with a separate brand name without being worried about the extra costs of a different physical setup for each brand.
6. Ghost kitchen offering Takeaway/Drive-through Model
In this type of business model, ghost kitchens or virtual restaurants have a storefront to give customers the food pickup/takeaway option with the delivery option.
7. Aggregator Model, Offering A platform to different Cloud kitchens
This model is for anyone interested in earning through the cloud kitchens concept on a commission basis. In this type of model, a business person offers an online platform to the restaurants or cloud kitchens to let them accept online orders for food and manage delivery. The business person doesn’t own these kitchens, he/she just charges a fee from the kitchen owners for selling food on his/her platform.
After understanding the different business models, it is time to know the benefits or advantages of a cloud kitchen.
Benefits Of Cloud Kitchens
a) Lower Investment/Overhead Costs
With the cloud kitchen concept, the operational costs of the business are reasonably low. As there is no need for a dine-in setting, one can save money on the seating space, maintenance/interior designing of the place, front-of-the-house staff, and the equipment (like table, chairs, expensive cutlery/utensils, etc.).
b) Competitive Pricing
As the operating cost of a ghost kitchen is relatively lower than a restaurant offering delivery along with the dine-in option, the dark kitchen business can provide quality food at a much lower cost. It helps virtual kitchen businesses to gain a competitive edge and increase their profit margin.
c) Run & Manage Multiple Brands Easily
Running multiple brands with a physical dine-in space for each of the brands requires a large amount of money/a big budget. But, with the concept of dark kitchens or virtual restaurants, one can run multiple brands under a single roof without much financial investment.
d) Shared Kitchen For many Businesses
As no one would visit the place to dine in, many businesses can share a single cloud kitchen. It helps these businesses to cut costs.
e) Easy To Start A Business
As shadow kitchens are based on the delivery-only model, starting a business is so easy that one can even launch the business from his/her home kitchen.
f) Improved Efficiency
Ghost kitchens are specially designed to cater to delivery-only orders. So one can easily place tools, equipment, or packaging material at hand, do batch meal prep and complete orders at a much faster speed than the traditional restaurants offering delivery.
g) Menu Flexibility
A menu available on the food ordering website/app is much easier to update than the physical menus available in the restaurants. For even a minor edit in the physical menus, one has to reprint the new menus, which is both time-consuming & requires extra printing charges. But, the menus of the cloud kitchens can be easily updated on the website/app within minutes, with no extra cost involved. It allows the cloud kitchen business owners to experiment with the menu according to the changing consumer trends.
h) Increased Brand Reach
With the virtual kitchen concept, one can reach a large customer base online. The traditional brick-and-mortar restaurants that optimize their business for delivery can get good business exposure with their website/app. The additional marketing channels lead to more customers and hence increased incomes.
After looking at the different cloud kitchen business models, you can see how much business scalability this concept offers. No matter how small you start, you can scale up your business with ease. Looking at the immense growth potential, it would be a good idea to invest in the dark kitchen concept.
Famous Examples of Cloud Kitchen Startups:
Cloud Kitchen brands by Rebel Foods:- Fassos, Behrouz Biryani, Oven Story, Firangi Bake, Mandarin Oak, The Good Bowl, Sweet Truth;
EatClub’s Box8, MOJO pizza;
Swiggy, Zomato, Foodpanda
Which Businesses Can Use Cloud Kitchens?
- Catering Business
- Restaurants offering delivery/takeaway option
- Meal-Prep Companies or Meal-Kit offering Businesses
- Packaged food sellers
- Food truck businesses
- Home-based food businesses
- Tiffin service businesses
Start Your Food Delivery Brand
Do you want to build your online food delivery business?
Get Resources to Run a Successful Cloud Kitchen Business
(I) Launch Your Online Food Ordering Website
Launching a website to accept orders online is the first step to start your business on the cloud kitchen model. For that, you need to connect with the top company/developers to get the best website design & development services.
(II) Capture On-Demand Market With a Food Delivery App
Get your business ready for mobile users by investing in an app.
Watch the video to know how our food delivery app works.
Want more information about our food delivery app solution?
(III) Integrate in-house and online sales data with POS system
Having a POS system software can make your life much easier if you handle the offline/in-house orders along with online orders.
Watch this video to know how our pos system works.
Want to know more about the pos system?
Do you still have any queries about the cloud kitchen concept? Or are you interested in starting your business on the cloud kitchen model? Get in touch with us now!