World Is Moving From Dining-In To Cloud Kitchens

This is a story about how the COVID-19 pandemic has changed the restaurant industry and people’s behaviour towards going to the restaurants.

When the pandemic hit the world, lockdowns were imposed everywhere to curb the spread of the virus. The lockdown came with several restrictions, leading to the temporary shutting down of restaurants, theatres and more but that didn’t stop people from ordering food online. In August, Zomato released a study which said that Indians ordered food online 20 crore times during the lockdown. With all the other industries struggling, India’s food delivery industry already recovered 75–80% of its pre-COVID Gross Merchandise Volume (GMV).

This shows that the pandemic is not stopping many people from ordering out and this has also led to the growth in cloud kitchens. But what are cloud kitchens anyway? Cloud kitchens are commercial facilities built to produce food specifically for delivery, and they do not have the dine-in facility.

Wendy’s Expansion In India

On Tuesday, Wendy’s Co signed a deal with India’s Rebel Foods to open around 250 cloud kitchens around the country. The U.S company said that it believes its cloud kitchen alliance is the largest yet in India. Abigail Pringle, the chief development officer of Wendy’s said, as quoted by Bloomberg, “India is one of our high-growth, high-potential markets” and added, “I don’t know of any other global brand that has announced this kind of significant multiyear, multi-unit commitment.”

Ordering In Is Here To Stay

You might be thinking that once the virus goes away, people might be going back to eating at restaurants. But a survey carried out by RedSeer Management Consulting says otherwise. The survey said that 21% of the respondents were more likely to increase their online ordering of takeaway food after the lockdown. However, only 9% said they were more likely to visit restaurants more often.

There is a valid reason to avoid eating at restaurants — According to a US study, among adults tested for the coronavirus at 11 healthcare facilities in July, those who were infected were around twice as likely to have dined at a restaurant in the previous 14 days. In September, the findings from the Centers for Disease Control and Prevention (CDC) said that eating out may carry a higher risk of catching COVID-19 than riding public transportation or getting a haircut at a salon.

Apart from being less risky, cloud kitchens are set to become a big thing in the country. According to RedSeer Management Consulting, cloud kitchens are estimated to become a $2 billion industry in India by 2024 and that’s up from $400 million in 2019. The MD of Sierra Nevada was quoted by Bloomberg, saying, “India is one of the most under-penetrated markets on earth” for quick-serve restaurants. So, there it is — Cloud kitchens have a huge potential in India and the lockdowns have accelerated their growth journey.

This brings us to the most important question — Will there be a change in this pattern once there is a vaccine for COVID-19 or will people continue to order online even after the pandemic? And that is food for thought for everyone…

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