Why Cloud Kitchen is a Recipe

for Success (And How You Can

Start Your Own)
From productivity to customer satisfaction, a cloud kitchen solves for
everything.

Imagine: not having to pay high rent for better locations or not worrying
about more parking space and better ambience.

With cloud kitchens, you have the power to focus on just two things:
making great food and delivering it quickly.

People now prefer the comfort of eating food at home rather than
venturing into long hours in traffic. Combine this with the advent of
technology, and you realise how cloud kitchens are a major game changer
in the restaurant industry.

What is a Cloud Kitchen?

It’s an easy concept. Think about a fully-equipped commercial
kitchen in a restaurant, except it doesn’t have any restaurant
seating or even a takeaway counter – that’s a cloud kitchen for
you. They’re a crowd pleaser because of convenience-driven choices and
also prove to be beneficial for restaurants wanting to reach a large
customer base.

Not just new entities but even age-old restaurants and QSRs are now
venturing into having cloud kitchens. Even various restaurants consultants
agree that the cloud kitchen model presents a massive opportunity because
of its operational efficiency and low starting up costs. So is it beneficial for
you to open a cloud kitchen as well? Let’s find out!

Business Viability of the Cloud Kitchen

Here’s a fact: in a survey conducted for our Online Food Delivery
Report, we found out that

67% of restaurants would prefer opening a cloud-kitchen over a dine-in

as their next outlet. Get access to the full report here.

The major reason being that kitchen only units come as a far more viable
option for saving on high rentals and the requirement of client-facing staff.
We further go deep into these points below:

Savings on infrastructure

We all understand that the costs of maintaining a full-fledged restaurant

are sky high. To add to it are the real estate prices for these locations.
Kitchen-only units come as a far more viable option when it comes to
infrastructure.
Shourrya Sachdeva, founder of Crepe-fe, a dessert delivery brand says –
“While I would want retail outlets, the major reason we prefer cloud
kitchens is to avoid the challenge of high rent and deposit. They have
become an industry norm because of their affordability.”

Cloud kitchens can be optimised for making food in the most hassle-free
manner and also ensure better quality control.

Reduction in service time

The best thing about a cloud-kitchen is that it lets you enjoy the power of
distributed cooking. If you’ve kitchens in multiple locations, the food
can be served hot and fast with a much lower delivery time.

More contextual customer data

Collecting customer feedback to improve performance

Cloud kitchens work the best when combined with technology. Having
your own order online system or a mobile app lets you collect crucial
customer data that helps in further engagement with your customers as
well as newer menu planning.

Flexibility in menu

Another crucial value that cloud kitchen model provides is the flexibility to
keep experimenting with the menu. It’s easier to respond to new food
trends and fads by quickly adapting them in your delivery menu rather
than alternating the processes at a traditional setup of the restaurant. It
also means more versatility in the food you can offer.

Wish to optimise your menu to increase orders? Here is a resource you can
read.

Higher margins and competitive pricing

The cost of delivery has to be accounted for when running a cloud kitchen
but it still is much more affordable than running a brick-and-mortar
restaurant place, where infrastructure and operational costs suck away
most of your margin.
Ultimately, with higher margins, you’ve the ability to offer competitive
prices and test them to see the market’s response.

Better expansion opportunities

With cloud kitchens the opportunity of rapid expansion is massive. You

can either open and run multiple bands from the same kitchen or expand
geographically with kitchens in more kitchens. In some cases, you can even
do both. Depending on your market strategy and the response
For example, Faasos runs 160+ kitchens and 4 brands including Faasos,
Behrouz Biryani, Oven Story and Firangi Bake – all offering a distinct
menu.

Now that we know all the wonders cloud kitchen can do for a food business
let’s understand all that you’ll need to start your own cloud kitchen.

Deciding on the Cloud Kitchen Business

Model
Cloud kitchens bring with themselves category innovation and newer menu
choices. You’ve heard of a ghost kitchen or a dark kitchen – all these
variants including cloud kitchen are great for setting up quickly and
getting immediate access to a growing digital market, without
the risk or expense of opening a full-scale traditional restaurant.
These kitchens usually start focusing on a particular theme or model. Be it
Asian Haus focused on Asian cuisine or Crepe-fe – made for desserts. The
other way around is to focus on packages like Box8 that provides a range of
meals. Some popular options for today’s cloud kitchens include:

Healthy Food

Consumers today are conscious of their food choices. They don’t just want
to eat good, they want to eat smart. More and more cloud kitchens these
days opt for a healthier menu and are even transparent about the calories
added.
Regional Cuisine

Regional menus like Rajasthani or Punjabi cuisine are also a popular

choice for cloud kitchens. At times focusing on a particular dish like
Biryani also works great for the business.

Indulgent Food

How can we not mention some indulgent food like waffles or crepes, these
work great too in a cloud kitchen model and can be optimised for quicker
delivery. all these variants including cloud kitchen are great for setting up
quickly and getting immediate access to a growing digital market, without
the risk or expense of opening a full-scale traditional restaurant.

Meals

Meal boxes are a great option for the customers that are always on the
move or require a variety of food options every day. Brands can innovate in
various cuisines for these meal options.

Getting Resource-Ready for Your Cloud

Kitchen
Online Ordering Website

Your online food ordering website is like your silent server. It will be the
first thing people notice about your brand. It becomes even more
important for cloud kitchens as instead of a physical entity, your website
becomes your main connection with the customers. It should always be
updated with enticing images and descriptions. Having a website helps in
maximising your sales opportunities and increasing the customer base.
When you invest in your restaurant’s website, it’s like investing in a long-
term promotional and business tool which should not be neglected in any
case.

POS & Order Management System

When running a cloud-kitchen, speed, automation and optimisation are

three main things you need to excel at. Having a restaurant POS that helps
you integrate with different tools and runs on cloud-tech will make your
life much easier. Another thing you must-have is an order management
system that can bring orders from different third-parties into one place for
faster processing. With high-volumes of orders coming your way, it’s
important the time they take to get in your POS and kitchen is significantly
optimised to seconds.

[Also read: How your POS can act as a central unit for your restaurant
business]
Tip: Always integrate your POS with your CRM for effective management.

Engagement and Feedback Tools

When running a cloud-kitchen with no or very less direct contact with your
customers, it’s important to engage with them through different mediums
like SMS or email. This is where getting orders on your own platform
helps. You get to have customer details and send them meaningful
communication for long-term relationships and some hot orders.
Different mediums for sending campaigns

Using a feedback tool to ensure you’ve a correct picture of how your service
is being liked by the customers and what you can improve on also helps in
the longer run. Also, don’t neglect having a strong loyalty program. It’s of
utmost importance when you want to convert more third-party customers
to your own platform and saving so much on commissions.

Look no further for the right tips to send great CRM campaigns and get
loyal customers

Kitchen Location & Licensing

For your cloud kitchen’s location, you can opt for any place that’s nearby to
your target delivery areas. Now that you don’t have to think about
accessibility, parking, stunning interiors etc it’s much easier to find a
location and at a much cheaper price. You can even partner with fellow
restaurant owners who plan to enter the cloud kitchen space. The good
thing about having a kitchen-only setup is that it provides a huge
collaboration and cost reduction opportunity.

Getting an FSSAI license is also mandatory for any food business. You’ll
have to make sure your kitchen fulfils all the requirements for the same.

Cooks, Raw Material and Menu

Crafting the right menu and using quality equipment and raw materials is
something that’s important for any kind of restaurant. This should be the
first step in your planning process. Cloud kitchen owners these days spend
a significant amount of time and budget setting these three things right for
their business. Some even build their own machinery or grow their own
produce. This further acts as a great addition to the brand story and is a
major marketing point.

Delivery Partners

Whether you plan to deliver by yourself or use third-party services, it’s

really important to ensure quick delivery of your food. Partners like
Zomato, Swiggy or Uber Eats are popular choices for a fast delivery
experience. Having your own set of delivery boys is another popular model
that cloud kitchens experiment with.

Strong Packaging

Even though they’re ordering food for delivery, people want it as hot and
fresh as they would get while sitting in the restaurant.

When all your orders are delivery focused, packaging can either make or
break the game. It can also act as an addition to your brand value if
designed with great interest. Overall, it should be strong enough to avoid
any spilling in transit and also keep your food warm.

Marketing Your Cloud Kitchen Right

Online Presence

Salad Companyʼs Instagram feed to engage with customers

Since your online presence is all the contact you’ve with your customers, it
needs to reflect your brand, menu and marketing offerings well. Using your
social media platforms to communicate new offers, messages, and
driving sales is what a lot of cloud kitchen owners give the first preference.
When thinking about your social media strategy, ask these questions:

Who are my target customers?

Where do they hang out the most online?
What pleases them the most?
What do they want from your restaurant?

Offline Presence

Building an offline presence in your target delivery areas either through

distributing pamphlets, participating in community events or
partnering with local influencers – all this will help in spreading a
word about your brand out and ultimately increasing sales.
When your brand is focused on a cloud kitchen model it is important to
take the opportunities to showcase your brand offline wherever possible.
Food festivals, fleas and carnivals are a great way to do this and reach new
customers. They’re great to tell the market you’re here and delivering. Also,
to present your signature menu items.

Here’s how to stand out when participating in a food fest.

Over to you:

We hope with all this information in place, you’re armed to get started with
your own cloud kitchen or improve on an existing one.
With the online food delivery market expected to hit a market volume of
$11,137 million by 2022, the potential of cloud kitchens getting a major
chunk of this market is huge. This is rise is supported by the lower meal
production costs, increased logistics scale and strong demographic trends.

What do you think about the future of cloud kitchen in the restaurant
industry? We believe it’s definitely more than a fad – it’s the
future. We’d love to hear your thoughts in the comments.

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