The Cloud Kitchen Industry in India
Since, no dine-out options were available during the pandemic, food delivery and cloud kitchens tremendously upscaled and provided people with the luxury of ordering food online and getting it delivered at home. With low barriers to entry and need of limited investment, a plethora of brands with a variety of cuisines have entered this competitive space in Indian cities. The domestic industry has significantly grown in the past few years and has adapted to the challenges and expectations of customer ordering trends.
From Fresh Menu to Biryani by Kilo, cloud kitchens have carved a niche on delivery platforms like Zomato and Swiggy. These brands have attracted a loyal customer base by maintaining the food quality and taste. However, even though these kitchens don’t have dine-in facilities, it doesn’t mean they don’t present lucrative investment opportunities. Competitiveness in the market is growing and cloud kitchens need to invest in kitchen infrastructure, brand franchising and keep up with upcoming trends like sustainable packaging to automation in kitchens. With a variety of choices available to order from, cloud kitchens are also expanding their chains to enhance profitability and growth, for instance, Curefoods recently signed a merger with Maverix to build over 125 kitchens across 12 cities, making it one of the largest cloud kitchen player in the fresh food space. Furthermore, cloud kitchens also suffer from the hefty commissions charged by aggregators and so cloud kitchen businesses are now experimenting with various delivery alternatives such as self-delivery services or by partnering with local delivery service providers.
The last two years have seen a tremendous growth in digitization and innovation in India. In an effort to cut costs, cloud kitchens often tend to ignore problems associated with scaling up, such as order forecasting, quality assurance, supply chain dependability, etc. which in turn affects customer experience. For these kitchens to prosper to their maximum capacity, kitchen automation is important as it aids in effective kitchen management, culinary innovation, and product consistency.
To begin with, Machine Learning (ML) and open data will be essential in enabling real-time data visibility, inventory management, product availability, etc. This would help in providing pleasing customer experience and make the kitchen staff more efficient via feedback analysis. Future technologies like Artificial Intelligence (AI) could aid in accurately predicting measurements for meals and deriving quick solutions to kitchen issues, among other things. The industry has ample room for innovation and with proper technological incorporation, the sector could maximize marketing operations, people management, etc.
Cloud kitchens have changed India’s consumer story as cloud kitchens spread to Tier-2 and Tier-3 cities along with support from online food aggregators. This means that there is a lot of potential in these cities as customer tastes evolve, leading to increase in the presence of cloud kitchens, contribute to creation of jobs and increase accessibility of customers to branded and packaged food. Cloud kitchens are quickly replacing the home dining experience and have moved people towards comfortable ‘ordering in’ rather than ‘going out’. Cloud kitchens are a booming business worldwide, especially in countries like the United States and China and have interesting growth opportunities in India as well with the help of effective use of technology, good quality food and sustainable packaging solutions.
This article is co-authored by Bhamini Rathore and Kanika Verma.