New Delhi: Covid-19 collapse, which has been followed by social distancing and the countrywide lockdown has presented India's entrepreneurial ecosystem with unprecedented obstacles, especially for food startups. The pandemic forced food startups to re-evaluate their management and operation of their businesses, including revisiting their business plans. Especially with restaurants being shut down, takeout was the only option. And that is when cloud kitchens came into the picture. It is a restaurant that caters to takeaways only and does not provide dine-in options.
Owing to the above trends, the food delivery industry is witnessing an upward trending graph with a surge in the number of online orderings per day and customers looking for hygienic and safe options to eat.
Average frequency of online food ordering in India is 4-5 times/week.
The convenience of ordering through apps without the grind of going out to eat has driven and boost the market demand.
Cloud kitchens, which have a much superior store matrix due to the reduced capital expenditure and human costs have been the key to facilitate this transitioning move in the food ordering industry.
The concept of cloud kitchens is anticipated to grow over the next few years, given the nature of these kitchens and changes in customer behavior. According to RedSeer Management Consulting, the Indian market for cloud kitchens is expected to grow from 400 million dollars in 2019 to 2 billion dollars by 2024. Additionally, it is anticipated that the market for cloud kitchens would be worth 1.05 billion dollars by the end of 2023.
India Online Food Delivery Market will be US$ 21.41 Billion by 2026
CAGR of 28.94%; 2020-2026.
Cloud Kitchens: The Future of Food Industry in India
- Right tailwinds, online penetration of the food aggregators and increased online ordering trend
- Enhanced visibility with lower marketing expenditures
- Low overhead costs
- Easy expansion across cities
- Expansion scope in smaller cities: Tier 2 and 3 cities are getting tech savvy with more online ordering
- Quick Prompt delivery through food aggregators
Considering these factors, the concept of cloud kitchen is expected to gain more popularity in the coming future. According to a study by Statista, the size of the global cloud kitchen market was projected at 56.71 billion US dollars in 2021 and is anticipated to increase to 112.53 billion US dollars by 2027.
But everything comes with its own shares of challenges. With the increasing trend—cloud kitchen players are facing some challenges—and to ensure the success of your business you must keep in mind certain checkpoints like right strategic location, right menu and pricing for the catchment area, high cleanliness standards, licensing, reliable delivery set up etc.
With the food consuming behavioural evolution and ever-evolving trends—online food ordering and exploration is also set for an overhaul, one made accessible and feasible through the online cloud experience.
