PESTEL ANALYSIS OF CLOUD KICTHEN INDUSTRY-

PESTEL Analysis encompasses following factors Political, Economic, Social, Technological,

Environmental and Legal. These above stated factors are explained below:
1. POLITICAL- Government all over the country have created frameworks or policies to
comply with for any company dealing with food related items like cleanliness of kitchens,
transporting and storing standards, minimum requirement of labourers to encourage
employment also. Tax Reforms/Policy related to online delivery might also affect the Cloud
kitchen industry.
2. ECONOMIC- Economic Factors include Inflation rate, consumer disposable income and
exchange rate
Inflation rate - Inflation rate affects the cloud kitchens, as it increases the cost of
production basically the cost of raw materials. With the rise in inflation rate, Producer is left
with less proportion of Profit to keep with him. This below graph depicts the data which is
related to “India’s Inflation rate” since February 2021 to January 2022. As you can see from
October 2021 inflation rate has increase which has affected the prices of raw materials
significantly.

Consumer Disposable Income – Consumer Disposable Income shows a direct

proportional relation when we consider consumer is willing to spend. As more disposal
income left with consumer people tend to order more from the online kitchens and vice-versa.
Exchange Rate- It also affects Cloud kitchen in terms of raw material and food processing
machinery and equipment’s which are being imported in the country from rest of the world.
The value of imports are pegged to common trade currency (dollars) which is the exchange
rate for trade purpose. Exchange rate keeps on changing leading to which fluctuating price of
raw materials and machinery and equipment for food processing. By looking at the past 5
years data of USD to INR we see that from January 2018 there has been a significant
deprecation in rupee and since mid-2020s rupee kept being quite volatile.
3. SOCIAL- Social factors also affect this industry in terms of cultural aspects,
demographics, health consciousness, lifestyle, etc.
Health consciousness Now days, people are becoming more health consciousness, they
tend to prefer healthier options like organic food over junk food. This has changed cloud
kitchen increased cloud kitchen scope of offering foods and added different food preferences
to their offerings.
Diversity- Increase in participation of women in the workforce has increased diversity
which are being involved in factors of production in cloud kitchen all over India. Even with
rising participation of transgender in workforce have created even more diversity in the
workforce involved in cloud kitchen.
Lifestyle – Lifestyle determines people tendency to order from Platform-to-customer
delivery. Those people whose lifestyle is quite busy tend to order-in more frequently or in
some cases daily from platform-to-consumer delivery.