By Tathagata Samajdar
The world order is changing as we speak as also our life. Covid-19 is leaving its’ traces on our way of thinking, leaving and dining.
We are increasingly replacing going out for food by asking for a homedelivered meal. Cloud Kitchen comes into the picture in this scenario.
Restauranteurs need to change their model if they want to survive this pandemic storm. A shift from a physical storefront to an online kitchen is inevitable.
Cloud Kitchen – An old wine in a new bottle
The concept behind cloud kitchen is a takeaway only restaurant. We cannot visit their physical store; as they do not have any. This type of venture generally solely operates through cloud or website.
They take orders through their website and deliver your food at your doorstep. As I have said, this is not a new concept.
As we have seen, Chinese restaurants and Pizza industry in the West or Dabbawalas of Mumbai in Asia have built their business on this type of model.
So, what is new in this?
The answer to this question is technology. Increasingly technology is changing the way of dining out and will change in the post-pandemic world.
As dining out in restaurants has almost ceased post lockdown, restauranteurs need to embrace this kind of concept, if they want to survive in the long run.
Keeping up with the changing scenario of dining out consumption pattern the restaurant industry is one of the worst-hit sectors as an effect of the pandemic.
As we can see, increasingly customers are preferring to spend their quality time in their homes rather than dining out.
So, restauranteurs are perplexed on how to overcome this nightmarish situation.
Firstly, let’s look at consumption behaviour. Have people rejected the restaurant food altogether? The answer is no.
The delivery data of Swiggy or Zomato in India supports this claim. As we can see the main change is not what they are eating but where they are eating.
So, we have to adjust the restaurant business model accordingly in India. We need to have an online presence of us along with the traditional one.
Apart from this, a proper supply chain management system needs to be in the place. After all, delivery at the doorstep is the USP to survive.
So, do not wait for your customers to arrive at your restaurant. Be proactive enough and surprise them with your dishes with the help of cloud kitchen business model. How is the cloud kitchen business model profitable from a business point of view?
Firstly, it lowers the overall cost of a business. How? There are 3 factors:
1. Less Real Estate Cost: You do not need an expensive location for your brick and mortar restaurant front or do not need to maintain a parking area. As you can operate your virtual kitchen from anywhere, so you do not need to worry about high rent or mortgage fees.
2. Less Fixed Assets Cost: As only, you need a space for your kitchen, so one can avoid infrastructure costs. There is no need to buy a fancy tabletop and chair if you are operating from your home.
3. Less manpower: Generally, a restaurant employs a large number of people for various kind of positions; like a waiter, bartender, maître d’hôtel or even a cleaning staff. If you are operating from your garage space, you do not need all these overheads.
Of course, you are going to need your chef, your delivery personnel and a person to maintain your online presence.
Hence, from a business point of view, you are actually saving money; which you can use as an investment in the business.
Apart from these reasons, we all know a digital platform gives more exposure to a business. One can end up reaching more people through cloud kitchen model than a traditional outfit.
So, should entrepreneurs venture out in the restaurant business with just a mobile app? The answer is – yes.
One can not only survive this pandemic storm but you may end up having a profitable venture.
Requirements to set up a cloud kitchen venture are like any other business venture. Business ideation, planning and strategy are very much needed.
Mainly, you are going to need the following things:
1. A website or an app – through which you will be able to take orders from your consumers and maintain your online presence.
2. An area where you can cook and package your dishes for delivery.
3. A delivery system. Be it a homegrown one or a third-party partner.
4. A Banking partner.
Before starting with all these, you need to analyze how much feasible this new venture will be for you as an entrepreneur.
Only a structured approach will be able to help an entrepreneur in the cloud kitchen business.
Technology is becoming the main enabling factor in most business sectors. The restaurant industry also needs to embrace it if they want to survive this pandemic and subsequent recession.
Planning for a tech-enabled future should be the answer to Covid-19 from the restaurant industry.
Tathagata Samajdar is a marketer, engineer and a startup enthusiast. Presently, he is overseeing the marketing division of Array Innovative Services Pvt. Ltd. as the marketing head. Apart from his work he is an avid reader, foodie and an environmentalist.
(Edited for Startupanz.com)