Cloud kitchens, also known as virtual kitchens or ghost kitchens, are premises used for preparing food with a large focus on fulfilling delivery orders, with no on-premises dining for customers and where F&B operators can have multiple brands operating within one physical location.
According to a report by Euromonitor International, 52% of global consumers are comfortable ordering from a delivery-only restaurant, with the food delivery industry estimated to be at $122 billion and expected to grow at over 7% a year through 2024. The advancement in technology, changes in consumer behavior and increased optionality, affordability and convenience experienced by people having food delivered is a trend which is here to stay, and which has resulted in the accelerated emergence of cloud kitchens.
Cloud kitchens come in many forms, from full stack operators to kitchen infrastructure as a service provider or even micro cloud kitchens (where restaurants simply stack on delivery-only brands to their existing brick & mortar footprint). Through its various forms, cloud kitchens provide restaurant owners with the ability to easily and cost effectively scale across locations and experiment with new concepts. Preliminary predictions reveal that ghost kitchens could create a $1 trillion global opportunity by 2030.
In the last couple of years, cloud kitchens have become a highly popular business model that has already been making a mark in various geographies, including KSA. The Kingdom has always been known to be experimental when it comes to F&B, and the widespread options made available to residents is indicative of the Kingdom’s appetite for such innovative concepts.
While there are a number of legacy solutions which exist for restaurants, they do not properly take into consideration or solve for the needs of today’s restaurant industry. This is because the legacy systems have not kept up with modern customer demand, and the rapidly evolving digital landscape of the sector. For cloud kitchens on the other hand, no solution has been built from the ground up to specifically serve their requirements. Key limitations typically faced include the fact that most solutions out there do not cater to or enable the easy operation of multiple brands from a single location, therefore limiting the potential growth of restaurants and cloud kitchens.
F&B operators have also not been given the opportunity to better understand their sales & operations as due to the outbreak of Covid-19 and the sudden requirement to address the new needs of the sector, restaurant owners have been stuck firefighting and trying to quickly adapt to new changes rather than be empowered with the tools to stay abreast of recent developments. Key issues faced include dealing with a number of siloed solutions making it difficult to operate efficiently and draw comprehensive insights and analysis, as well as not having access to the tools required to uncover the kitchen black box and understand bottlenecks in the operation across the end-to-end order lifecycle.
A unified cloud kitchen management platform, on the other hand, can help F&B operators drive revenues, minimize cost and achieve operational excellence. A robust cloud kitchen management platform can help F&B operators with a centralized menu management capability, and in-kitchen technology will eliminate the need to manually enter information and allow operators to measure each step of the journey, understand bottlenecks, address inefficiencies, and make necessary adjustments to enhance the end-to-end customer experience, thus building trust and transparency with their customers.
Another major advantage of a cloud kitchen management platform is it makes it easier to operate multiple brands from a single location, therefore maximizing revenue per square meter. It also automates otherwise manual and time-consuming tasks which reduces overhead, streamlines kitchen operations, speeds up order fulfillment and results in improved customer satisfaction.
Grubtech is currently powering a number of cloud kitchen operators, and enterprise restaurants in the Kingdom, helping them navigate the ever-evolving needs of the sector. Grubtech has also established a partnership with Foodics, a KSA-based point of sale (POS) and management system for restaurants, providing restaurants with the ability to automate otherwise manual and time-consuming tasks, centrally manage menus across all channels, and automatically receive orders from all different online order channels including food aggregators directly into the Foodics POS.