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How are Cloud Kitchens Profitable

How are Cloud Kitchens Profitable

Lesser input costs, an increasing customer base, secure profit margin, hassle-free business processes, and wide scope for expanding the business - the perfect recipe for a great business. 

All these boxes are ticked by cloud kitchens! The cloud kitchen concept provides everything above, particularly in a nation like India which is home to a rising consumer base and a multitude of restaurants, street stalls & food centers. A cloud kitchen (also known as a ghost kitchen), is a take-away-only outlet that offers no dine-in facility. The only way to order food from here is by going online.

Cloud kitchens require less investment to open. You can open a ghost kitchen at one-third of the investment that is needed to start a typical dine-in restaurant. You can simply rent tiny kitchen space, bring the required raw materials and the cooks, and begin the work from day one. All you need is a typical restaurant kitchen.

Chief among the benefits this business model provides is a lesser rent-to-revenue ratio. The space needed to run a ghost kitchen can add more profit to your basket. You can operate from the kitchen with just an area of 150 to 300 square feet. You can serve as many customers or even more in an efficient way just like a 1500 square fully operational restaurant.

A full-fledged outlet needs a prime location and beautiful interiors for seating to attract people. Very professional staff are needed for a dine-in restaurant. Whereas you don’t need fancy interiors & furniture, manpower, miscellaneous services, etc for operating a cloud kitchen. It’s also possible to save on ingredient costs when the food is packed in a limited quantity, and no food would be wasted on the plate.

A cloud kitchen may also operate different brands using the same space and resource. This implies more market shares and revenues at the minutest added costs. As more brands can run under a single roof, productivity will increase. This model is very profitable for the investor as one kitchen is producing profit while it caters to various tastes. 

Whether or not restaurants opt to try out a cloud kitchen business model, one thing is for sure - in the upcoming ages, flexibility is gonna be key. The ghost kitchen space is poised for growth alongside the food delivery market which will continue to benefit from the COVID-19 tailwind. 

Final Thoughts 

The future of ghost kitchens for development is endless in India. With all the other services going online, individuals do not have any free time to walk down to a restaurant or drive amidst a traffic-jammed road for filling the tummy.

A ghost kitchen has a better chance of survival and is likely the future of the foodservice industry. It has all the opportunities to potentially expand at a rapid rate. 

With minimal risks involved, this successful business venture is one of the safest bids. The time is now for this exciting food sector to embrace digital transformation and build demands based on the latest trends. 

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