The future of cloud kitchens looks promising and brighter than ever. In the last two decades, we have seen people dining out more often for a change from home-cooked meals. But in recent times, there’s been a gradual shift to ordering food at home and an increase in take-out options. Moreover, the Covid-19 pandemic changed the complete economics of food and restaurant businesses. While dine-in trends will continue to exist, the industry is focusing a lot more on food deliveries.

With just three ingredients – a great menu, a kitchen space, and smart packaging, you can create and run a successful cloud kitchen. Its simplicity and low-cost model have pushed hundreds of people over the last two years to jump onto the bandwagon. The domestic cloud kitchens market is expected to grow from $400 million in 2019 to $2 billion by 2024. Cloud kitchens are leading from the front to bring about this change.

But what exactly are cloud kitchens? Unlike brick-and-mortar restaurants, cloud kitchens don’t have a dine-in facility. They take orders via apps, in-house or through delivery partners like Swiggy and Zomato and operate single or multiple food brands.

A booming cloud kitchen in Delhi

The perfect recipe to run a successful cloud kitchen is by selling an amazing food product. Cloud kitchens are popular because of the food they offer. Unlike a restaurant with a great dining experience where people go for the service and ambience, a cloud kitchen’s only value is its food. So, the food on the menu is the most important ingredient of a cloud kitchen, and not working on the product well enough and creating a good menu will most certainly not work. Cloud kitchen owners should work on their food to make it stand out. They should master the recipe and find a niche over their competitors.

Cloud kitchen rely on their delivery and take-out format

For cloud kitchens to be able to sustain, they need to keep their costs low. They must be careful not to spend too much money on packaging. The cost of packaging for cloud kitchens should not be more than 5 per cent of total expenses. Kitchen experts suggest that the cost of goods sold should ideally be around 25 per cent of total costs. Although food packaging is one of the most important parts of a cloud kitchen, one has to ensure that the packaging ensures safe travel of the food from the kitchen to the consumer, while also offering hygiene and taste.

Packaging is also a great way to market your cloud kitchen

The biggest mistake that cloud kitchens do is operating 6-7 brands from one location. When there are 10 different cuisines in one kitchen, the manpower has to be trained specifically. The equipment used for one cuisine might not work for the other. That’s why a lot of cloud kitchens have a problem making money. Being particular about locations can be a bad decision as Profitable cloud kitchens can flourish even in tier 2 cities more than in fancy urban hubs.

So, what’s fuelling this growth in cloud kitchens? In India, a person on an average orders 6-7 meals per month at home, which is far lower than the global average of 16 orders a month. Hence, the scope to expand this segment is huge and it is important that those looking to start a successful venture or business capitalise on this opportunity.