How often have you returned home after a tiring, long day at work and decided to just order in food? Or subscribed to those meal delivery plans where the food comes packaged and ready to eat or prepped with all ingredients ready to be cooked?
Young working couples and single working professionals are increasingly eschewing cooking at home and opting to order food through delivery apps or subscribing to meal service plans to avoid the hassle of grocery shopping, cooking and cleaning. However; opinions are divided: whether these options are economically viable and healthy in the long term when compared to cooking at home. Whatever may be the reason; there is a growing demand for food delivery among youths in India. 60 percent of smartphone users have a food-related app on their devices and 50 percent of this use it to order online.
The rise of food delivery gave birth to an entirely new concept: the ‘Cloud kitchen’. Multiple successful cloud kitchens are operating throughout the world. The concept is getting popularity like never before. This is a very young industry and still evolving. ‘Faasos’ (known as Rebel Foods) had started in 2011 by two young entrepreneurs of India. They have established ‘Faasos’ in one of the top cloud kitchen companies in the world. ‘Faasos’ till now has garnered a total amount of $276.1m in investment, expanding its empire globally. Swiggy Access, which launched only in Bangalore last year, has expanded to include 30 restaurants with 36 kitchens in 4 new cities including Delhi, Mumbai, Kolkata and Hyderabad. Both, food delivery aggregators Swiggy and Zomato are renewing focus on their cloud kitchen restaurants to start open up amid the COVID-19 pandemic.
While a growing number of consumers order their food through third-party delivery apps like Zomato, Swiggy and so on, most of the foodies might not even know that their meal was prepared in a dark kitchen also known as Cloud kitchen. Customers can order food like Indian meal boxes, Chinese, South Indian, Rice & Biryani combos, variety of wraps, and desserts from mobile app or website. So, what are these ‘Cloud /dark kitchens’?
ONE CONCEPT WITH MANY NAMES:
Cloud kitchens, sometimes called ghost kitchens, dark kitchens, virtual restaurants, or restaurant-as-a-service (RAAS for short), are designed exclusively for online ordering and delivery. There is no brick-and-mortar location. There are no servers. There’s just a shared kitchen, with staff cooking top-notch meals and a delivery crew distributing the food to hungry patrons at home or at work. Rather than cooking for eat-in dinners expensive to the pockets, cloud kitchens cook purely for delivery. So the food that is produced there can only be consumed either at the office, home –depending on the choice of the customers. Working couples, single, bachelors, or oldies can benefit. In a broader sense, it is a delivery-only restaurant.
It is the success of online ordering players, such as, these third-party delivery channels through which food businesses connect customers and quickly deliver meals to their doorstep. Getting food out to the customer has become easier, even for smaller, single restaurants – a change that has led to an increased offer to match the ever-growing demand.
COMPENSATING LOSS:
Cloud kitchens are helping restaurants to compensate for their losses since the time of the pandemic. While everything was shut down due to the COVID pandemic, working with 25% of the skeletal staff was difficult. But with few available staff, this food business model gave a new lease of life to many restaurateurs not only to continue functioning but to even set up another community kitchen to feed those in need.
A PROFITABLE MODEL:
Many see it as a profitable model since it requires no physical space to operate from beyond a kitchen and is solely dependent on third party integrations, orders placed on calls, apps, and websites for functioning. While the trend was becoming increasingly popular in pre-COVID times, its relevance has increased manifold during the pandemic, since was the best way to keep the food business afloat while maintaining social- distancing guidelines. These kitchens are of a delivery-only format, hence there is no need to spend big on infrastructure cost. Instead, one can focus on your food quality, quicker turn around and providing faster delivery to your customers. This may make Cloud Kitchen a popular food startup idea. All that is required is a good chef.
Not having to provide customers seating and waiting areas, it significantly lowers the cost of the rent. Additionally, there is no need to hire serving staff either. Cloud restaurants are therefore a great way for restaurant owners to reduce overheads while increasing their capacity to cater to the increased food delivery market.
As per the latest guidelines, the restaurants may resume function but it will take a while before they operate in full capacity. This leads to an alternate option explored; cloud kitchen is one such solution to keep the business going. It helps restaurants to compensate for the losses suffered during the time of the pandemic.
Many see it as a profitable model since it requires no physical space to operate from beyond a kitchen and is solely dependent on third party integrations, orders placed on calls, apps and websites for functioning. While the trend was becoming increasingly popular in pre-COVID times, its relevance has increased manifold during the pandemic, since it’s also the best way to keep the business afloat while maintaining social- distancing guidelines.
IN TIER ONE & TIER TWO CITIES:
The concept of the Cloud kitchen has taken imagination in Tier one and Tier two cities. One such example of the Cloud model is ‘Go Litti’ outlet in Ranchi, Jharkhand. Food & Beverage Entrepreneurs, Sameer Kataruka and Ankush Raj, founders of ‘Go Litti’ outlet, had a vision of turning Litti Chokha, the street food of Bihar -Jharkhand, into an impactful brand around the country. They were driven by the passion that led to ‘Go Litti’, a restaurant chain, which they started in 2016.
At ‘Go Litti’ outlet, the entire concept of Litti has been moulded into a new avatar. Apart from being deceptively delicious, it has cooling properties and keeps one active throughout the day in summers. Raj and Kataruka, founders of ‘Go Litti’, have been constantly experimenting with the product by keeping in view the customer tastes and preferences. They have segmented the customer base on the basis of their age groups and choices. This helped them in customizing products. Ranchi, not being a metropolitan city, has currently ‘Go Litti’ three physical outlets. According to Raj and Kataruka, three outlets are more than enough for the entire city as they are catering to almost all segments of the city. Litti is now gaining momentum all over the country due to ‘Go Litti’.
LAST WORDS:
This proves how startups can do wonders if one has a passion and drive to do. The rest is history.
(The author is an Associate Professor & Dean of National University of Study & Research in Law, Ranchi. Views are her own)
