Cloud Kitchens Entrepreneurs Share New Trends In The Space The habit of ordering food is expected to stay even after things become normal again, giving rise to more digital-only food brands

Cloud kitchens are today in vogue. As customers prioritize health and hygiene over other things, ordering food seems to be a safer option. And, they do not seem to mind where the food is coming from, a dark kitchen or a restaurant, as long as it is hygienic, cost-effective and delivered quickly. This habit of ordering food is expected to stay even after things become normal again, giving rise to more digital-only food brands.

After the pandemic-induced lockdown, many restaurants, including those in five-star hotels, also pivoted to cloud kitchens to keep business afloat. Now, even as dine-ins have opened up, cloud kitchen business is an additional revenue layer for most of them.

Experts believe that some restaurants may even totally switch to delivery-only models to cut down on infrastructure costs. Further, there will be many new trends and business models in the space soon. Entrepreneurs share some such trends with us here.

M&A Activity

With the influx of funding in food startups and increased options for liquidity in the Secondary markets and Public markets in India, we may see a lot of acquisitions in the food space, including cloud kitchen, said Nishant Jhaveri, co-founder, Nino Foods.

"Food business is very ops heavy. Many successful owners/operators are tired of the day-to-day and want to move on. I think we will see a lot of acquisitions in the food space. It's difficult to build a brand from scratch and get product-market fit. Several cash-rich players will be looking to pick up well-priced brands which they think they can grow across the country and beyond. Lots of these deals can be win-win for both sides and that's what is super exciting," added Jhaveri's cofounder Pranav Mehra.

Cloud Kitchens Layer to Existing Dine-In

Many restaurant businesses have suffered due to the pandemic. Cloud-kitchens offer the best way to restart a food business and understand consumer sentiments without spending much. "Even existing restaurateurs can use cloud kitchens to experiment with their new offerings in the menu or expand to a new location. With delivery aggregators expanding into the cloud-kitchen vertical, there is enormous market potential in the next 3-4 years," said Ankit Mehrotra, CEO and co-founder, Dineout.

Integration of AI and ML in Kitchens

Tech integration to solve customer problems is the future of the food tech industry, say these founders. "Live feed of kitchens where your food is being cooked, details on the sourcing of ingredients, special instructions, etc. will help in enhancing customer experience through technology. Using Artificial Intelligence (AI) will also gain prominence with features such as voice-command for ordering food are expected to hit the scene soon," said Raghav Joshi, co-founder and CEO India BU, Rebel Foods

He added that the power of AI can be used in multiple ways due to its intuitive nature and recommending customers as per their tastes and likes on various dishes while ordering.

Franchise Model

There are various business models launching around the cloud kitchen ecosystem and many of them are expected to flourish. There are cloud kitchen companies that operate other brands like a franchise and pay them a franchise fee. For instance, Ghost Kitchens India has come up with a model wherein it will help restaurants earn incremental revenues and profits by giving them an opportunity to increase their food delivery sales through under-utilized infrastructure and manpower that they already have.

"We support them by licensing our brand, providing technology for end-to-end business management and supplying ready-to-assemble food which helps them to maintain standardization and makes them not reliable on the skilled staff," said Karan Tanna, founder CEO, Ghost Kitchens India and founding member of NRAI Youth Committee)

Co-working Cloud Kitchen

There is another business vertical which is also seeing many takers. Here co-working cloud kitchens offer ready-to-use kitchen space for brands on a revenue-sharing model. "Various models are emerging and there is a potential for all the models in the market to grow till they add value to all the stakeholders," added Tanna.