Nowadays, Cloud Kitchen is the latest trend that has rapidly established itself in the restaurant space as a strong restaurant format. With the ongoing condition in the restaurant industry, extreme competition, rising costs, and high rental, Cloud Kitchens seem like a smarter way to start a restaurant business. As per the reports, the Cloud Kitchen Market size globally is estimated to reach $71.4 Billion by 2027 with a CAGR of 12% from 2021 to 2027. In India, there are more than 3500 Cloud Kitchens and by the year 2024, the Cloud Kitchen Business in India is expected to become a $2 Billion industry in India. This shows the immense potential of the Cloud Kitchen Business. Scroll down to check more information regarding Cloud Kitchen Business in India.
What is a Cloud Kitchen?
Cloud Kitchen, also known as Ghost Kitchen or Virtual Restaurants, is a restaurant kitchen that only accepts incoming orders through online ordering systems and offers no dine-in facility. All the Cloud Kitchens in India have their online ordering website & online ordering app or they accept food orders via various food delivery platforms like Swiggy, Zomato, etc. and also vital to have Point of Sales Software to accept such orders from various sources. Some famous examples of Cloud Kitchen Businesses in India are Faasos by Rebel Food, Biryani by Kilo, Hoi Foods, etc.
Different Types of Cloud Kitchens in India
Following are the different types of Cloud Kitchens in India:
- Hybrid Cloud Kitchen: These types of Cloud Kitchens can be visualised as an extension of the regular Cloud Kitchen. Instead of being stuck in a space with Kitchen equipment, these types of Cloud Kitchens also have a storefront that allows customers to get their takeaway parcels.
- Multi-Brand Cloud Kitchen: This Kitchen is a combination of different brands under the same Kitchen. This type of Cloud Kitchen utilises resources effectively & keeps operational costs low. Flexibility is one of the vital parts of such Multi-Brand Cloud Kitchens as they facilitate to the local food demand in any area & use marketing data insights to include various types of cuisines and to maximise profits.
- Independent Cloud Kitchen: The Cloud Kitchen is a single brand that is totally dependent on an online ordering system for their orders. With a small team of chefs, definitive working hours & a brand name, independent Cloud Kitchens have a self-reliant business model and are hosted on various food aggregators to acquire customers.
- Outsourced Cloud Kitchen: This type of Cloud Kitchen is solely dependent on outsourcing the food & delivery services. A restaurant/any other business can outsource almost part/all of the menu such that the prepared product is received at the restaurant. Then, the restaurant packs the product and hands it over to the delivery personnel. The operational or functioning cost for the in-house team is significantly reduced as everything from preparation to delivery is handled by the outsourced group.
Benefits of Having a Cloud Kitchen Business in India
Before starting a Cloud Kitchen Business in India, it is important to know the various benefits of having a Cloud Kitchen Business in India. The various benefits of starting a Cloud Kitchen Business in India are as follows:
- Huge Returns: This business cuts down your production cost and the only expenses that your business would ever incur are the material usage, i.e., the ingredients required to make the food & a small % of royalty. Besides this, you don’t require any extra cost; thus, your returns are quite high from every customer you make, thereby granting you good profits.
- Investment: In a Cloud Kitchen Business, you do not require an offline or a physical space for your business; even a home-based outlet is enough. This saves you a lot of money, as a major investment is required for interior designing, physical store, and the Kitchen, yet in cloud kitchen, you can focus on those funds on developing your brand.
- Require Small Team: In a Cloud Kitchen Business, you require a small team of chefs who would help you in preparing the food. This cuts down your expenses, as you have to pay salary to just 2 or 3 team members.
Different Licenses and Certifications Required for Starting a Cloud Kitchen Business in India
Following are the different License & Certifications required for starting a Cloud Kitchen Business in India:
- FSSAI License: This License is mandatory for food-related business in India and must be obtained on behalf of its owner and the Company.
- Trade License: Every business must obtain a Trade License & so does the Cloud Kitchen. This can be attained from the Local Municipal Office by providing all vital documents.
- Fire & Safety License: It is not mandatory, but it is great to save yourself from future troubles.
- Trademark Registration: This is also very relevant for the Cloud Kitchen Business because the idea of Cloud Kitchen Company does not allow the customer to step in. Thus, to protect the brand, the business owner must file the application for Trademark Registration for the name, logo, and wordmark consisting of different colours & patterns to create their unique identity on the market.
Important Points Regarding Opening a Cloud Kitchen Business in India
Following are some vital points regarding the opening of a Cloud Kitchen Business in India:
- Deciding the Location: Location is the biggest differentiator that lessens the cost of opening a Cloud Kitchen Business in India as compared to a traditional dine-in restaurant. In the Cloud Kitchen Business Model, the location does not have to do anything with parking space, footfalls, etc. However, it does have a lot to do with proper water supply & sanitation with low rentals.
- Implementing the Online Food Ordering Platforms: Once you decide on the location, then you need to decide on the correct online food delivery platforms. There are many online ordering & delivery platforms like UberEats, Zomato, Swiggy, etc. accept online orders on your behalf & also deliver the food to your customers. Since Cloud Kitchen relies exclusively on its online presence to attract customers, a website with the option to order any food online is an absolute must.
- Getting Licenses for the Online Kitchens: For setting up a restaurant, Licensing is an essential part. A few Licenses, as we discuss above, are vital to procure in the 1st month of operations for a hassle-free business. It is recommended to hire an expert to apply for all the permits because it is the most tedious & time-taking task.
- Raw Material, Equipment, and Packaging required for a Cloud Kitchen: The cost of setting up the Kitchen varies depending upon the cuisine & food you are offering. If you spend correctly on equipment by getting new electronic items & other equipment like racks, tables, storing shelves, etc., you can save a lot of money. The cost can increase because of the heavy equipment such as burners, refrigerators, etc. Raw materials required to start a Cloud Kitchen Business in India depend on the type of food you are offering. So, it is vital to choose the right vendors at this phase for the raw materials.
- Requirement of Staff: A minimum of 5 employees in an online kitchen are required. You require at least 2 chefs, 2 helpers & 1 housekeeper and the staff’s salary depends on their experience.
- Point of Sale Technology: The overall online food ordering & delivery system is heavily dependent on the acceptance of food orders. It is also vital to keep track of the no. of orders coming from the various online food ordering platforms. Tracking of orders & detailed reporting is vital for the smooth functioning of restaurants.
- Marketing of a Cloud Kitchen Business in India: Proper advertising & marketing is vital to the success of a restaurant. For a Cloud Kitchen, marketing becomes essential as it becomes the single source of getting online orders. Online marketing always works in favour of Cloud Kitchens.
Cloud Kitchen Business is one of the most trending businesses in India and worldwide. The Cloud Kitchen Business in India is a business idea where a small infrastructure & a small group of people can effectively run the business daily. However, Cloud Kitchens have their own set of advantages & disadvantages, and it is wiser to compare the pros & cons before setting up a Cloud Kitchen Business in India.
Read Our Article: How to Get FSSAI License for Cloud Kitchen in India?