Cloud Kitchens: A boon in times of Covid-19 pandemic

Since over a year, dining out has not really been an option, globally. With the pandemic sniping at our heels, most of us have turned to food delivery apps to satiate our hunger. And in these testing times, what has emerged as a massive relief is the popularity of Cloud Kitchens, also known as virtual or ghost kitchens.

Prevalent in pre-COVID times as well, cloud kitchens are essentially large food production facilities where restaurants hire space to prepare massive quantities of food for delivery only. Not just an income-generator in testing times, is a big relief for self-quarantined people who prefer to order in healthy, nutritious home-cooked food on a monthly basis.

Chitra S Iyer, who started operating from her home on a small scale in 2008, today sees her son — Srinath Iyer — launch a virtual kitchen, Shree Radhe Krishna Refreshments, from Navi Mumbai, which has a city-wide reach. “We specialise in pure veg festive cuisine from the South. Apart from breakfast and meals on a daily meal plan basis, we provide dishes for Pongal, Diwali, Vishu and Onam sadhya. Delivery charges are extra,” she explains. According to her, the response has been encouraging.

Vishu sadhya from Srinath Iyer
Vishu sadhya from Srinath Iyer

Chef Nilesh Limaye of All ‘Bout Cooking, which operates Annapurna Snacks & Meals, a ghost kitchen from Vikhroli, says, “Spending money was hit suddenly after demonetisation and GST implementation. However, entertaining couldn’t wait so the next best thing was ensuring that people get a variety of cuisines to taste, yet not burn a hole in their pocket.”

Workspace sharing

A major operational expense is cut down as a cloud kitchen eliminates the cost of setting up a restaurant. Co-working and shared kitchen spaces help reduce unnecessary costs. Various mini kitchens under one roof help the centralisation of inventory and use manpower to the optimum level.

The focus, clearly, is on producing quality food. “When home delivery and corporate events became the norm, there was perfect harmony between demand and supply, with the realisation that various kitchens under one roof was a good business idea,” states Limaye. 

Not all rosy

Abhinav Raja and Vivek Singh, co-founders of Powai Ranch, add, “The biggest problem with the cloud kitchen model is that it has replaced real estate costs with technological costs. Cloud kitchens have astronomical technical costs as they have to communicate with numerous food delivery apps. The orders have to be received and communicated to the kitchen which is nearest to the customer’s location.”

Non veg platter from Powai Ranch
Non veg platter from Powai Ranch

There are cloud-based solutions available that allow restaurants to go high-tech without any major upfront costs. However, the monthly subscriber fee also burns a hole in the pockets of many start-up kitchens. Apart from this, company-owned online ordering is also necessary to avoid depending solely on the delivery partner.

Cuisine variety

Thanks to cloud kitchens, options of varied meal plans - from Pan Asian to continental, specialty Indian dishes to exotic global meals - are just a click away. “What we have learnt over the last three months is that foodies crave for variety. It is imperative to provide customers with varied options to succeed in this space,” says Raja.

Satish Venkatraman from Prasadam-the H-Iyer Taste, operates from Govandi and charges as per actuals for delivery. Specialising in pure veg south Indian meals and with a customer base of largely senior citizens who opt for monthly meal plans, he also offers traditional tiffin like rice dumplings, string hoppers (sevai) and bhajjis. These are quite popular for those who hanker for home-cooked food in today’s ‘work from home’ era.

Success mantra

According to Nilesh Limaye, the combination of specialised dishes, customised menus and team players are crucial to make a cloud kitchen popular. With the rise in social media marketing and cheaper options for promotions, it is imperative for cloud kitchens to leverage the reach and potential it has to offer. “Creating brand awareness without high marketing spend is possible with the rise in such innovative digital marketing methods,” says Abhinav Raja.

The way ahead

Cloud kitchens or restaurant-as-a-service, witnessed accelerated growth and development amidst the pandemic last year. “The gross market value of India’s cloud kitchen market was estimated at US$400 million in 2019. It is expected to grow at a CAGR of 35% and be worth US$2 billion in 2024. A report by BCG and Google indicates that the reach of food-tech apps such as Swiggy and Zomato grew over six times between 2017 and 2019,” informs Deepak Bhawnani, CEO and Founder, Alea Consulting, one of India’s first (homegrown) private global risk and fraud mitigation and investigative consulting firms.

Sustainable and easy to organise, with the right kid of investment and focus, cloud kitchens have a bright future and are here to stay!

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