Cloud Kitchen: Concept and their Business Model
A few years ago the idea seemed far-fetched that you would be accepting food from an unknown fellow at your door. This is the power of technology you can place an order in a matter of clicks and without any interventions, the food will simply arrive at your door.
Cloud kitchens have become popular after the success of the food delivery model. The idea was based on the observation that more and more people are willing to enjoy hot food at the warmth of their house.
This observation has done wonders in the restaurant industry. It gave an opportunity to many young entrepreneurs to enter the business. The hypothesis based on observation was if people like to eat at home why do we need to have any dine in the facility at the restaurant.
This Hypothesis resulted in cloud kitchens. In terms of space requirement, a restaurant needs a cooking space, counter well that’s it. This and many other factors have reduced the cost of establishing a restaurant.
Business Model:
Simple Model- In simple model cloud kitchens have one kitchen, one brand, and no storefront.
The working is fairly simple:
Order Comes through an online source ( Aggregator, restaurants website or mobile application).
Depending on which channel the order is received in case of an aggregator like zomato a zomato delivery guy will come at the restaurant and deliver the food to the end consumer. In the case of a restaurant’s website or mobile application, the delivery responsibility will be of the restaurant where their personal delivery mechanism takes place and one of their delivery guys goes and delivers the food to the end consumer.
Complex Model- In complex model cloud kitchen have one kitchen, Multiple brands and can have a storefront.
The difference in this model is that brands like rebel foods have multiple brands and they accept orders under different brand names from aggregators or from their own website/mobile application and then there is one kitchen who makes all the orders and it is then picked by the relevant delivery person and reaches to the end consumer.
In some cases restaurants have a storefront too like Freshmenu which acts as a takeaway, customers can physically visit the store and place and pick up their orders from the store itself.
Outsourcing Model- This model is relatively a new concept in the cloud kitchens. As a restaurant think of this way that there is an aggregator who is storing your inventory and as and when the orders are received it pre-prepares the food from its central kitchen then the food is brought to your chef where they put in the final touches where the aggregator picks up the order again and deliver it to the end consumer.
