In recent times, the food industry has witnessed exponential growth owing to advancements in technology and cut-throat competition. Cloud kitchen is one concept that is spoken of in the same breath as well. It remains one of the fastest-growing segments associated with the restaurant industry across the world as well as in India. In the last 2-3 years alone we have seen many local as well as international restaurants focusing a lot in the cloud kitchen and the online delivery business that is mainly driven by convenience, value for money and creating restaurant like experience at home as people want to enjoy their food at the comfort of home.

Growth of Cloud Kitchens Across India

When you look at the current scheme of things, the Indian cloud kitchen and restaurant market is still in the very nascent stages when compared to the United States and China. However, it is estimated that the Indian food service delivery market will double in value to $13 billion by 2025. In 2023 alone, the domestic kitchen markets are projected to showcase an increase to $ 1.05 billion. According to experts, the cloud kitchen market in itself will become a $2 billion industry in India by 2024, as compared to $400 million in 2019. The top players in the segment remains Rebel Foods that operate brands like Behrouz Biryani, Lunch Box, Faasos to name a few, followed by Bengaluru-based Curefoods the operate some of the popular brands like CakeZone, Eatfit, Sharief Bhai, Aligarh House Biryani, and more.

Factors Affecting the Growth of Cloud Kitchens

The COVID-19 pandemic truly led to a major shift in the Indian Food & Beverage industry right from dine-in to delivery. However, there are some key factors like convenience in making payments, changing lifestyles, and increasing disposable income amongst the youth. Shared below are some of the factors that have really impacted the growth of cloud kitchens business in India and across globe:

Increasing Demand for Food Delivery Services: The increasing demand for various online food delivery services has been one of the driving forces behind the growth of cloud kitchens across India. The pandemic gave way for many restaurant businesses to switch to a delivery-only model to cater to the needs of the customers. The entire setup created a wonderful environment for cloud kitchens, which can now channel their efforts into fulfilling delivery orders without managing a physical restaurant.

Technological Advancements: It goes without saying that the recent advancements in technology have been key in the growth of cloud kitchens. Innovative technologies in the form of Artificial Intelligence (AI) interfaces and robotics have been welcomed by the Food & Beverage industry especially the restaurant that witnessed labor shortage post pandemic. Moreover, another important technological factor has been the application of a Kitchen Display System or KDS, which is a digital screen that replaces printed or handwritten orders in commercial kitchens. It has been noted that KDS has been instrumental in enhancing the overall productivity of the cloud kitchen business.

Changing Eating Habits Amongst Customers: We can all admit that over the course of recent years or even decades, the taste palette of consumers has also evolved. One can think of the growing likeness for food dishes like sushi, lasagna, and many others in India, to understand that people want more diversity. Globalization truly did have an ever-lasting impact on the eating habits of Indians. However, the interchanging of cultures due to the prominence of the internet meant that foodies want more than just Indian and Chinese cuisines. Moreover, the increasing focus on staying healthy has also transformed the way consumers looked at food. More people now want to also consume a healthy diet comprising plant-based options. People are also keen to know the source of their ingredients, how it has been cooked and what calorie are they consuming.

Extremely Low Costs: One of the biggest factors which differentiate between a cloud-kitchen business and a brick-and-mortar restaurant business is the cost factor. According to reports, the cost of setting up a cloud kitchen is almost one-third of setting up a traditional restaurant. Moreover, when you look at it, cloud kitchen entrepreneurs do not have to cater to elements like restaurant interiors, space, restaurant interiors, and decorations.

Scalability: While traditional restaurants may possess a limited area and seating capacity, the same cannot be said about the scale of cloud kitchens. It is a known fact that in order to increase the scale of operations, you need massive investments. However, cloud kitchens can scale up by only increasing the extra space for the kitchens, which can be done by paying extra rent.