Cloud kitchens, virtual restaurants are the next big trends in food delivery
Wednesday, August 14, 2019
Co-working spaces have changed the way many people work, and now it's time for cloud kitchens to do the same for the food business.
Statista reports that the online food delivery segment will have $107 billion in revenue in 2019. Some of the industry's rapid growth is attributed to the advent of cloud kitchens, which have helped businesses stay ahead of high rents and employee turnover.
Cloud or centralized kitchens have been quietly revolutionizing the business, as is evident by India-based Rebel Foods' story. TechCrunch recently reported how one of the largest internet restaurant companies in the world raised $125 million with the cloud kitchen business model.
Rebel Foods prepares a variety of foods in its 235 cloud kitchens across 20 Indian cities. It processes 2 million orders a month, which is equivalent to running 1,600 restaurants. The fast-moving operator was one of the first to leverage cloud kitchens and is now poised to build 100 cloud kitchens in Indonesia and 20 cloud kitchen facilities in the United Arab Emirates.
Others are not too far behind. Food delivery companies Zomato and Uber Eats are racing headlong into the area with the former planning to open more than 100 cloud kitchens by the end of this year. It plans to rent the facilities and kitchen equipment to restaurants along with the software they need.
While some say that cloud kitchens are the next evolution of food delivery, others are not sure whether all effects will be positive. Traditional restaurants and grocery channels see cloud kitchens a threat to their business.
But despite detractors, these delivery-only restaurants with their on-the-go focus have allowed food businesses to cut down on overheads and survive. Some have proprietary apps to take orders, on-demand delivery services with marketing assistance, and data analytics to manage the processes.
Another related concept that is making waves is the virtual restaurant. Also called Uber cooking by some due to its initiation by Uber Eats, these businesses take orders through online apps and prepare food exclusively for takeout, pickup, and delivery customers. Food tech companies are excited about this concept and are looking to this sector for investing.
For detractors, it's time to accept that this phenomenon is here to stay. Changing consumer habits have led to the growth of food delivery systems. Busy lifestyles will lead to less in-home preparation of food and fuel further growth of the emerging ghost kitchen industry.
In the future, there will likely be robotically equipped ghost kitchens, smartphone "storefronts," and delivery services operating fleets of drones and self-driving vehicles to replace both home cooking and even the traditional dining-out experience. It's not just restaurants that are going to be impacted by these trends, but food producers, retailers, and real estate businesses as well.
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