ADVANTAGE: CLOUD KITCHEN

Many restaurants shifted towards cloud kitchens during the pandemic, using their existing kitchens for takeaway and delivery orders. This trend is likely to continue as customer footfalls remain dismal

- PRANITA BHOSALE

Even before the pandemic struck, food delivery was a successful business for most hotels and restaurants. 2020 ended up accelerating its growth as customers started ordering in with gusto. F&B establishments, which were battling curfews, restricted timings, social distancing limitations along with curtailed manpower found it a viable revenue stream, at a time when customer footfalls were a bare minimum. This shift in business models also led to the emergence of cloud kitchens, which focus solely on fulfilling online food orders and delivery.

According to industry reports, India had around 5000 cloud kitchens in 2019. Redseer expects this number to grow at 50% to 60% year-on-year. In terms of the gross merchandise value (GMV), the cloud kitchen sector is likely to become a $3 billion industry by 2024, up from about $400 million in 2019. Another report by Allied Market Research valued the global cloud kitchen market at $43.1 billion in 2019, which is likely to reach $71.4 billion by 2027.

Karan Tanna, Founder and CEO, Ghost Kitchens is unsurprised by these numbers. According to him, the cloud kitchen and food delivery business has been disrupting India’s food ecosystem for three main reasons – convenience, choices and cost.

“The end-to-end food delivery experience of aggregators like Swiggy and Zomato has made customers dependent on convenience of ordering food at home. Moreover, factors like improved packaging, delivery time and quality of food are encouraging the rise of food delivery,” he opined. “The growth of cloud kitchens is a global phenomenon. Even high street restaurants are depending on food delivery as a major revenue source.”

SHINING THROUGH THE CLOUDS