A Guide to Cloud Kitchen – Business Model, Kinds & Prospects

Cloud kitchen is a new concept in the restaurant business, renowned with other names such as virtual kitchens, delivery-only restaurants, shadow kitchens and commissary kitchens. This kitchen concept backs up the idea of home delivery of food without relying on the in-dining facilities. Under the cloud kitchen framework, one is the owner of the restaurant, who has a brand name and brand identity but with very little physical infrastructure. This is a brand new concept of setting up a restaurant that needs little investment with the chance of higher returns. 

Let us delve into more details about cloud kitchen and how it works. 

How Does Cloud Kitchen Work?

Different types of cloud kitchens exist that have their own working principles. However, one common principle of all cloud working models is that it only provides home delivery of food products. Cloud kitchen is a concept that facilitates the establishment of a restaurant in a cost-efficient way. The primary need you have is kitchen space. After having a kitchen space, you can install all the cooking facilities. 

You can take online order from your customers, cook the dishes in the kitchen, utilize branding on the packaging and deliver it to the customer at some time. The most amazing benefit is that you can run several brands from a single kitchen and entice the consumer base without the need to invest a lot. 

Business Model of Cloud Kitchen:  

Cloud kitchen is a burgeoning concept in the market. People are doing experiments on their own. Therefore, there are a number of business models which people count on. 

The following cloud kitchen models are discussed for your reference. 

1. Brand-Owned Cloud Kitchen

If a brand in one particular location runs a kitchen, it is referred to as the brand-owned cloud kitchen. By brand, we do not only mean huge food chains but also the new entrants setting up their own kitchens. 

2. Spare Kitchens of Well-Established Restaurants

A lot of kitchens offer dining facilities at one location and open the cloud kitchen in other locations. This is basically the extra hustle of some popular restaurants to expand their reach in their market. 

3. Side Hustle of Established Restaurants

Some established restaurants also opt for the side hustle of cloud kitchens. They create a menu that is dedicated to delivery purposes only. The order is made ready in the exciting kitchen of the restaurant only. 

4. Shared or Business Owned Kitchen 

Capital owners have always liked to offer physical infrastructure. It has made it possible for businesses to set up kitchens in outer areas and rent them to the owners of restaurants. Some may have different kitchen portions for brands and others exist in the same space.

Types of Cloud Kitchens:  

We have discussed different types of cloud kitchens. 

1. The Independent Cloud Kitchen 

The independent cloud kitchen term refers to a single brand with no physical entity owning a kitchen space. 

Operational Process 

• Order online 
• Dedicated to a specific cuisine 
• offers delivery only
• Self-delivery as well as aggregators 

Examples: UberEats, DoorDash, and Grubhub

2. Multi-Brand Cloud Kitchen

This is the concept of a single kitchen that is used to run several cuisines on distinct brand names. 

Operational Process 

• Order online
• Multiple brands from single kitchen
• Provides the delivery only
• Self-delivery as well as aggregators

Example: Rebel foods (Faasos)

3. Hybrid Cloud Kitchen 

This is a single brand that operates from a single kitchen that has different outlets with a storefront as well.

Operational Process 

• Order online 
• Multi-cuisine seasonal menu
• Delivery and takeaway
• Self-delivery as well as aggregators

Example: Zomato or Swiggy

4. Delivery App Owned “shell” Cloud Kitchen 

Aggregators own this type of cloud kitchen with multi brands with no storefront of their own. This is known as a delivery app owned by shell cloud kitchen. 

Operational Process

• Online orders from particular owner aggregator 
• Multiple brands in partnership
• Delivery via aggregator only

Example: Zomato or Swiggy

5. Fully Outsourced Cloud Kitchen

This type of kitchen outsources cooking as well as delivery. The kitchen is pre-prepared in the central kitchen and wholly prepared in the kitchen near the customer. 

Operational Process 

• Order from all sources
• Cloud kitchens store the raw materials
• Pre-prepared food is sent to the cloud kitchen in neighbouring areas. 
• Food is prepared in the secondary kitchen and delivered to customers. 

Example:  Kitopi

Guide to Develop Cloud Kitchen Apps: 

This is surely a good business opportunity. We have here enlisted some steps you need to take while developing the cloud kitchen app. 

Opt for An Integrated Restaurant Management System 

In order to make the app development optimal and avoid the chances of missing something crucial, one should choose an integrated restaurant management system. This system is responsible for performing an array of tasks, so you have no need to install the individual software. RMS helps you to regulate billing, loyalty programs, marketing, developing online platforms, accounting, managing orders and many more.

Some of the most prominent RMS you can use are Toast POS, 7shifts, TouchBistro, Clover, CAKE, Oracle Hospitality, etc.  

Proper Planning for Inventory Management 

Though not a traditional restaurant, you still have to manage your inventory.  If you integrate the POS and SCM systems into your app, it will help you to track the inventory. In addition, you can go through the old inventory consumption and order further accordingly. 

Focus on Frontend

If a person visits your app as he wants to eat something, it is your responsibility to persuade the person to order something. It has some enticing images of delicious food and a menu that helps users to place an order. 

Online Food Ordering

The main purpose is to get orders. Make an online food ordering portal in your app that permits the users to incorporate many recipes and order them with one tap. 

Multiple Payment Methods

This app should have multiple payment methods. Online and offline payment methods should be installed. Keep the options flexible with the choice of cards and UPIs for customers.

Feedback Forms 

Have the aim of developing a good relationship with your customer and developing feedback forms. This way, you will get feedback about your food. 

Order Analysis 

You can also have the option to analyze your order. This helps you get an analysis of the eating habits of your customers. You can make better decisions to achieve success. 

Option for Advance Orders 

Make room for bulk orders via advance orders. Allow customers to place big orders for upcoming parties, events, or gatherings. These kinds of deals are going to act as a catalyst for the performance of your business. 

SSL (Secure Socket Layer) Certificate 

This certificate enables you to make your online communication secure and safe. You need this certificate as search engines now penalize websites that are non-secure. 

Integrate the CRM System 

The CRM system, if integrated into the app, will help to engross the customers with the brand and make them feel connected. Some of the best CRM that you must opt for our Apple CRM, Coca-Cola CRM, Amazon CRM, Salesforce CRM, etc.

Promote Your App and Business 

Promotion of your app and business is imperative to let people know about your business. You can conduct marketing campaigns and opt for billboards, social media and hoardings to inform people about your restaurant. 

To Sum Up 

Cloud kitchens are going to be prevalent in the times to come. So this has given rise to a new business opportunity. App development is an inseparable part of cloud kitchen business ideas. A mobile development company in Australia like Elephy Tech is the best option to consider.