On Cloud 9: What is a Cloud Kitchen, and is it right for your business?
Be honest, how often do you order delivery? Are you like 60% of the country utilizing it once a week, the 31% who say they used 3rd-party delivery twice a week, or even everyday? This is why the biggest QSR brands are constantly pioneering ways to utilize technology to up their throughput. After the explosive growth of 3rd-party delivery platforms in 2020, there is a new innovation in contactless food delivery: Cloud Kitchens.
Cloud Kitchens are central hubs where restaurants can populate and share a building for pick-up and delivery only. Each restaurant occupies a fully functional kitchen, with cooking equipment and tablets to take orders from online order aggregators such as Otter, ChowNow, or, in the case of Kitchen United, their own order aggregation platform. From there, the team prepares the orders, often placing them in lockers for the drivers to pick-up and bring to the customer.
So why is this minimalistic restaurant service so hot? Well for starters, it’s the maximum ROI you can get on food pick-up and delivery. Only renting out a room, not paying utilities, and a sole focus of completing online orders means maximum efficiency. Uber itself owns many of these locations, and they don’t just accommodate the Burger Kings and McDonalds of the world, either. Growing brands like HipCityVeg utilize cloud kitchens to get their delicious vegan options to customers in their area.
Cloud kitchens come in different shapes and sizes, and different service models, including:
Standalone/Single-brand Cloud Kitchen
Virtual Restaurants
Multi-brand Cloud Kitchens
Shared Kitchen Spaces
Aggregator-managed Cloud Kitchens
Operator-managed Cloud Kitchen
These various and distinct models give options to every brand – from pop-up shops, to single locations looking to diversify, or a chef looking to get his or her brand off the ground. There are many options for how your business can capitalize on this trend, it’s just a matter of if it’s right for you.
When thinking about how this may work, you can easily consider falling under the umbrella of the “big guys”. Uber is making major headway building out Cloud Kitchens nationally, and they house all kinds of brands in one building. Based on firsthand experience: you might find a McDonalds kitchen next to local restaurants next to small chains, all in the same space! Grubhub has a similar approach, with their own selection of ghost brands. These ghost brands are designed based on data gathered from certain demographics and preferences in different neighborhoods. If you are a restaurant owner, or simply need a kitchen space, you can create virtual brands that could invigorate your online sales.
In the next 10 years, restaurant delivery sales are expected to grow at three times the rate of on-premise dining. Optimizing online ordering systems to account for this is obviously in your best interest. However, there are vital factors to consider with these upgrades, including: customer experience, technology integrations, management, supply chain, and staff. Those last two are a bit of a fickle subject in 2021, but don’t let that scare you. Instead, think of which of these models can help you bring in the right number and quality of staff members, and still be able to rely on the supply chain in its current state.
Regardless of what business model you are looking to approach, it's about being prepared for the future of restaurants. A big part of that is going to be your tech stack, and the consumer behaviors your customers have adopted in recent years. To learn more about how you can be prepared for the next generation of restaurant tech, get in touch with Science On Call today.