No business idea comes with sure shot success.
Executive Chef - Arun Vats - Hard Rock Hotel, Goa
CLOUD KITCHEN – as the first name suggests, one immediately imagines white-grey bubbles floating in the sky. On our gloomy days, we feel the urge to just step out & soak in the fresh air and look up at the sky or just go to the beach, lie down & admire the countless different patterns of CLOUDS in the sky – Lifting our spirits & filling our heart with gratitude.
In today’s pandemic time we all, especially the hospitality industry is facing a huge setback. Goa, over the years, has been known for its rich and diverse offerings, a tourism and entertainment hotspot, with award-wining chefs around, featuring global cuisines alongside the humble Goan food. Today, this industry in Goa and worldwide is in a soup, it is tough to make ends meet daily. People are under stress thinking about what to do and what not to, especially those who are associated with the culinary field. I think this is just the same thing where we just need to step out & see those small clouds to make our own story. What we need to do is to open our eyes on the chance, which is lying right in front of us to make some good for ourselves. Necessity is the mother of invention & here we have the concept of a “Cloud Kitchen aka. Ghost Kitchen”, is the silver lining to our dark clouds.
These days, we store our photos, stream our movies, and even run our businesses in the cloud. And more and more often, whether we realize it or not, it’s also where we’re ordering our food. Food delivery service was a novel concept in Goa until very recent time’s pre – Covid19. It’s good that we are having so many gadgets to look for new ideas & browse new ideas floating around the world to learn, launch & execute product OUT-LOUD on social media like Facebook, Instagram & Whatsapp.
Introducing cloud kitchens, commercial facilities are built to produce food specifically for delivery. These commissary kitchens are sometimes also known as ghost kitchens, shared kitchens, or virtual kitchens with the delivery-only food brands operating within them called virtual restaurants.
Maybe you’re thinking: “This is nothing new” and in a way, you are right. Chinese restaurants have been making the most of delivery for decades. And the pizza industry has practically built its business around optimizing for delivery. But moving to a delivery-only model has been made possible recently by advances in technology and changes in consumer habits. It offers certain advantages over offering delivery from a traditional brick-and-mortar restaurant.
As per Technomic data, in 2018 itself consumers spent $10.2 billion on delivery services. Since then it is at a high pace & till last year food delivery business has seen an exponential growth of 42%. Going by these statistics, it is my lookout that by second quarter of 2021 cloud kitchen cum food delivery business will easily touch $90+ billion. Even speaking for Goa, wherein people who used to go out & have their meals at the beachside or some rustic shacks or popular restaurants have started ordering food to their respective homes & villas.
Everything comes with a price tag with their pros & cons. With CLOUD KITCHEN also there are a few:-
Controlled inventory & payroll cost (which is roughly 25-30% of the revenue in running a restaurant). With cloud kitchen, you can reduce the same by 15%. And if you are running from your home then it’s you only.
No major décor cost & lease or licensing cost involved (you can start up from a small space size of 50 sq. m.)
Its low-risk backing gives an edge to start-ups allowing trying out skills to create your brand even for those who don’t have prior experience.
One major thing which needs to be decided upon, after the recipe, is food grade packaging material or environmentally friendly packaging.
Cloud Kitchen concept works on very competitive pricing. Having no extra fixed costs attached you can have competitive pricing & can have focused only on two major areas quality-portioning of food & smart delivery services.
I am sure you are aware that it’s a social media-based or a virtual platform which is being used to promote & sell your product. So direct customer interaction is rare or negligible. Maintaining relationship & building trust is the biggest challenge & giving them the same quality food every time is the key to build the trust factor.
The opportunity to redo an order on any complaint is not at all possible. Once the food is out for delivery you can only pray to God that customers get their food on time & in a proper way, meeting or even exceeding their expectations.
Menu planning has to be agile & suggestive selling will be out of the question.
One major cost you will be shelling out is to delivery apps which are around 18-25% on every order. So having the right price is the key to make a profit margin.
To summarize: - No business idea comes with sure shot success. You have to be agile in understanding the market & strategically put your product well on the social platform in the coming years, CLOUD KITCHEN OR GHOST KITCHEN & FOOD DELIVERY will be the answer.
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