The world is moving to more agile and online systems and cloud kitchens are part of that.
What are cloud kitchens?
Cloud kitchens are a growing phenomenon in the UK and around the world as consumers are increasingly opting for deliveries over eating out. The cloud kitchen model has developed to take advantage of this demand without the additional costs of the traditional take out or eat in services. Businesses that might once have offered deliveries on the side are now focusing exclusively on these services.
A cloud kitchen is a professional kitchen that only produced food for delivery. Unlike a traditional restaurant there is no associated dining area where customers can eat in. Customers won’t usually have the option of picking up their orders either, so cloud kitchens are distinct from the more conventional take out. Customers don’t visit the cloud kitchen at all so it consists solely of a food preparation area with no tables, waiting areas, or service counters. You might also hear these kinds of businesses referred to as ghost, virtual, commissary, satellite or dark kitchens.
How Common Are Cloud Kitchens?
Food delivery is the main area of growth in the restaurant sector. Deliveries now make up around 30% of sales and this is expected to double over the next five years. More people will be buying food for delivery than going out to eat. Hundreds of cloud kitchens are now operating in London and there are growing numbers elsewhere in the UK.
Technology has played a key role in the development of cloud kitchens. While takeaways have been taking telephone orders for years, smartphones have provided a faster and more convenient way of placing orders. It has also helped to cut staffing costs for businesses by replacing them with automated services.
Some businesses are even beginning to tap into the trend by providing kitchen spaces for delivery businesses to rent. Deliveroo now has its own shared kitchens and Uber is starting to invest in commercial kitchens that can be rented out by businesses selling through Uber Eats. Deliveroo Editions has even begun sending kitchens set up in containers around the UK to offer cloud kitchen spaces in different cities.
Benefits of the Cloud Kitchen Model for Businesses
The biggest benefit of the cloud kitchen model is that it can dramatically reduce costs for businesses. Cloud kitchens eliminate the need for dining spaces and service staff. The kitchens are often rented part time, which further cuts down on the costs.
The lower costs are particularly important for start-ups. The food and restaurant sector has always been notoriously risky, with many new businesses failing within a year. Cloud kitchens don’t come with the same risks as there is no need to invest in real estate or equipment. There is no need to spend more to base your business in the perfect location as cloud kitchens can operate from anywhere. Smaller businesses can even benefit by joining services such as Deliveroo or Uber Eats, which means that there is no need to develop their own apps for sales.
Businesses can also benefit from increased efficiency due to the automated sales process and the ability to focus on food preparation rather than service. The greater efficiency can be particularly important for growing businesses or larger companies. It is easy for these businesses to introduce new products or expand to meet demand. The biggest businesses can even develop their own delivery apps or open up multiple kitchens or delivery stations using a hub and spoke model.
Potential Issues for Cloud Kitchens
- The same low costs and flexibility that can be the biggest benefits of the cloud kitchen model for businesses can also be responsible for some of the potential challenges. Businesses utilising this model may find themselves confronting a certain amount of distrust or prejudice.
- Some people see cloud kitchens as a threat to traditional businesses and there can also be concerns about how well these kitchens are regulated. Cloud kitchens can pop up quickly, move around, and shift identities, so it can be harder for consumers and regulatory authorities to know who they are dealing with.
- Another issue is that customers don’t feel the same connection to your business when they only order through a faceless app. Customers are less likely to become regulars, especially if you’re selling through an app that lists all of your competitors too.
Businesses that are investing in the cloud kitchen model need to be aware of these issues so that they can take steps to overcome them. Creating a trustworthy brand is essential when your customers aren’t able to visit the premises where you’re preparing their food. Building relationships through social media and having a responsive system for complaints and reviews can make all the difference. With the right technology to manage sales and communication, the cloud kitchen model can be a great success for you while providing your customers with a service that they love.