For the past two years, if we see the records of the Food and Beverage industry, it is not that good. Restaurants, cafeterias, bakery shops, everything has come to standstill as people in this era live in this digital world where they want everything at their doorstep.
Cloud kitchen is a means of the kitchen where people do not have to visit the place to have their food. Cloud kitchens are fast becoming the go-to business model for many food businesses. They can simply order and enjoy it in their homes.
Now, which seemed better? Going to a restaurant, burning petrol, wasting time on traffic, and paying extra service tax or order from home and sit back and relax?
So, the answer to whether it is profitable in India is a definite YES!
Over the years, cloud kitchens have emerged as the popular investment choice for both established as well as new restaurateurs for opening a food business. Starting from restaurant owners, caterers, bakery shop owners, everyone is shifting their businesses to cloud kitchens.
What are the reasons that make it profitable?
a. Efficient
- Can change location whenever you want
Being a ghost kitchen, none of your customers neither visits your kitchen nor see your kitchen. So, if you are having some trouble in the existing place and want to shift it to the next street, you can do that easily.
- Investment is low
Investment in interiors, furniture, decorations, managers, staff, security, big space for dine-in, high-end equipment can be saved when starting a cloud kitchen.
A minimum of 180sqft to 350sqft is required to start a cloud kitchen with one chef and one assistant and no fancy interiors or furniture. So, the investment for starting a cloud kitchen is less.
- Flexible timings
For a cloud kitchen, there’s no specific timing to be followed. Unlike restaurants, which have their time limit to get closed by 12 am, cloud kitchens can run up to 2 am late.
b. Starting of multiple brands
Under the same roof, more than one cloud kitchen brand can be operated. As none of your customers visits your kitchen, they are also not aware of two different brands serving them food from the same cloud kitchen. One highly skilled chef can prepare at least two different cuisines and each cuisine food can be considered as one brand.
For Example, Rebel foods being the parent company of Faasos, lunch box, sweet truth, etc operates all these brands from the same cloud kitchen.
c. Better profit margin
Compared to restaurants, cloud kitchens tend to earn more margin as various additional costs such as interior designing, waiters, managers, high electricity bills, is saved. As the operational cost is reduced, direct profit is earned except for the essentials.
The higher rent can be saved that is required for a restaurant to accommodate many people for the dine-in purposes.
d. Menu and pricing experimentation
Cloud kitchens can experiment with new dishes at times by introducing those items as special deals. Also, existing items can be discontinued from the menu when it is not being ordered by people.
Similarly, the pricing of certain dishes that are frequently ordered can be increased to make more margins. The less selling dishes can be priced low or can be served as combos with high-priced dishes.
e. Market opportunity
An avg person orders food online 3–4 times a week. The online food delivery industry is booming in this generation. Cloud kitchens are said to grow 5 times in these 5 years by researchers. The home delivery option has gained a lot of momentum than dine out restaurants.
Cloud kitchens have a better future as compared to restaurants, cafeterias, and bakery shops. People can start their cloud kitchens with the less initial investment and even from their homes, unlike restaurants.
I hope this article will help you in understanding the practical reasons how cloud kitchens are considered as profitable in India. If the blog is worth enough to read, then do give a thumbs up and share it with your mates. And do comment below your feedback!
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