While cloud kitchens offer numerous benefits, they are not without challenges. The lack of face-to-face guest interaction can pose a hurdle to build a brand identity.
According to a recent report by Google and Boston Consulting Group (BCG), the Indian food delivery industry is projected to grow from $4 billion in 2019 to over $8 billion by 2023.
The ongoing commitment to innovation and the adoption of cutting-edge technologies not only enhance operational efficiency but also influence how food is prepared, packaged, and ultimately delivered.
As urbanization and hectic lifestyles continue to shape consumer preferences, cloud kitchens and delivery platforms are poised to become the future of the Indian food industry.
Virtual kitchens offer several advantages over traditional restaurants. For one, they have lower overhead costs since they don't need to invest in a front-of-house space, furnishings, or staff.
Not just restaurants, food delivery business and cloud kitchen brands have also set their expectations high from this budget as they have contributed a lot in building a digital first approach nation.
The online food delivery segment in India operates mainly under two business models: Restaurant food through consumer delivery, in which meals are ordered online through a restaurant website and delivered directly by the restaurant.
When asked what types of loyalty programs they're subscribed to, internet users placed restaurants high on the list, just after retail, supermarkets, and pharmacies.
Research and reports also showed that items such as biryani boxes, pizza, pasta, sandwiches, and burgers were some of the top-ordered items during 2020-2022 while placing orders online via delivery channels or restaurant partners.
To operate a cloud kitchen, the business owner needs to have a license for business operation, alcohol, food service, building occupancy, employer identification number, and employee health.
Offering minimum guaranteed orders to vendors, price protection, flexibility in worker hiring, financial support to vendors, and so on are some corrective measures that the industry should adopt.
