Understanding Cloud Kitchen Model & On-Demand Food Delivery

Cloud kitchens, ghost kitchens, shared kitchens or virtual kitchens – these are different names used to describe a restaurant concept gaining popularity in recent times. Cloud kitchens are spaces where many delivery only restaurants co-operate.

Delivery optimization is not a new kid on the food market block. It is, in fact, the foundation of the success story of pizza industry. However, the delivery-only concept has started to gain more acknowledgement as the consumers are shifting to on-demand food delivery instead of visiting the restaurants. Along with consumer behavior, technology is a major driving force behind the success of cloud kitchen model.

Before moving forward, here is a scoop on how cloud kitchens work?

A cloud kitchen is a licensed commercial food production facility where a few to dozen of restaurants can rent a space for preparing delivery-specific menu items. A cloud kitchen may follow either of following models:

• A single restaurant running multiple virtual restaurants
• Different purveyors renting and operating from a single space

The cloud kitchen model is very flexible and varies based on the scale of business.

Cloud kitchen can be segregated into five different models.

Ghost Restaurant: This is the fundamental concept of a cloud kitchen. Practically, a ghost kitchen has its own kitchen space, staff, and other operational requirements; however it does not offer a food truck or pick-up destination. A ghost kitchen is identified as a single business and runs as a brand.

Shared Cloud Kitchen: As the name suggests, in this model different brands rent a part of business building serving as kitchen space. This model is comparable to co-working space with different food producers having their own area in the kitchen space. This model helps in reducing the operational cost for every food producer as the rental fee and facility cost is shared.

Hybrid Cloud Kitchen: This model combines the concept of ghost kitchen with physical store. The restaurant offers delivery as well as take-out facility to its customers. Although this requires higher capital but the model offers better customer relationship management.

Aggregator Cloud Kitchen: This concept involves a delivery service that partners up with multiple restaurants sharing a kitchen space to deliver variety of cuisines to its customers. If the delivery service decides to set up its own kitchen, it transforms into a cloud kitchen. In this model, the kitchens are only responsible for food preparation, while the delivery service holds the responsibility of customer acquisition and order management.

Full-Outsourced Cloud Kitchen: This is not a kitchen. It actually acts as an agent that accepts orders from customers and distributes it to kitchens. Once the orders are ready, it collects food and hands it to the delivery service. The focus of such model is on building on-demand food delivery system.

 See Also: Zomato Business Model – Revenue Model and How to Build an App Like Zomato?

What Are Benefits Of Cloud Kitchen?

Cloud kitchen model or ghost kitchens are becoming immensely popular. Why so? It offers a number of benefits. Here is a list of benefits of cloud kitchens:

• Low Overheads: Financial aspect is a major challenge for opening a restaurant business. Ghost kitchens reduce the operational costs by eliminating the cost of building or owning a restaurant building, floor space for seating customers, etc.
• Better Efficiency: Ghost kitchens offer better efficiency by using custom built spaces and optimized food delivery processes. The kitchen stations can be prioritized to speed up the preparation & order delivery.
• Real Time Adaptability: Technology is the backbone of cloud kitchen model and it facilitates real time adaptability. The orders placed by the customers are updated in real time. Customers can also have real time tracking of their order status. This improves customer satisfaction and improves the restaurant credibility.

How Cloud Kitchens Work?

The functioning of a cloud kitchen is very simple. It can be understood as a stepwise process.

• The customer places the order using the online ordering platform.
• The received orders are then distributed among the participating kitchens or restaurants.
• When food is prepared, the food is sent for delivery.

Cloud Kitchen Concept

A cloud kitchen requires technology solutions such as integrated restaurant ordering system to operate and serve the customers effectively. Here is a list of technology requirements of a cloud kitchen:

• Ordering Platform: Irrespective of the nature and scale of business, the online ordering platform is the core of cloud kitchens as it facilitates customer acquisition. The ordering system is a centralized platform for accepting orders from multiple food aggregators that the cloud kitchen maybe associated with, orders from website or mobile app, and orders received over telephone. The ordering platform should be designed with features that facilitate ordering. Some features of an efficient ordering platform include product menu, filter options, easy signup, multiple payment gateways, easy checkout, and order tracking.
• Kitchen Display System: A kitchen display system helps in optimizing the cloud kitchen functioning. When an order is placed, it is updated in the KDS in real-time. The food preparing staff can have complete information about the order and pick-up time. This allows them to manage and prepare the order in time.
• Integrated Delivery System: The integrated delivery system allows the cloud kitchen to manage the deliveries instead of paying a third party delivery service. The delivery system should include features such as order details, address details, location optimization, real time tracking, delivery confirmation, payment details, etc.

The best way to launch your cloud kitchen business is to build your on-demand food delivery app. The on-demand food delivery app offers an advanced ordering platform, intuitive delivery platform and a powerful admin dashboard to allow you to have complete control over the cloud kitchen business.

If you have a cloud kitchen idea, click here to validate your idea.

Cost of Building On-Demand Food Delivery App

The cost of building on-demand food delivery app depends on numerous factors such as advanced features included, platform compatibility, development hours, location of developing team etc. The actual development cost may range from $5K to $10K. An affordable solution is to choose ready-to-use solution offered by Code Brew Labs. The solution offers the benefits of flexibility to customize, advanced features and low cost.