“Cloud Kitchen”, The Game Changer for Restaurants in Covid-19 Era
The prevailing Covid-19 has disrupted people’s lifestyles across the globe. Thailand, among many countries, released strict lockdown measures that limit the habit of eating out of its citizen. As the land of street food, the country witnesses small restaurants and food stalls struggle to adjust to the “new normal”. Cloud kitchen, as part of the expanding food delivery business, emerges as an option and perhaps a game-changer in this era.
Food Delivery Thrives during Covid-19
When customers cannot eat at restaurants, many – especially those who live in high-rise condominiums with small kitchen space – still crave delicately cooked meals from their favourite restaurants. They turn to food deliveries to console their hungry stomach. According to the Bangkok Post, Southeast Asian food deliveries service’ gross merchandise value (GMV) surged 183% from US$4.2 billion to $11.9 billion in 2020, with Indonesia ($3.7 billion) leading the expansion, followed by Thailand ($2.8 billion) and Singapore ($2.4 billion). Around the corner, delivery men and women are seen queueing up in front of small restaurants to get and deliver food to the delight of their customers at home. The problem is most delivery services base their fee on distance, and when it comes to ordering food from restaurants far away, customers tend to think twice before making the purchase.
What is Cloud Kitchen?
This is when cloud kitchen comes in. Cloud Kitchen is a commercial establishment where numbers of restaurants use a common kitchen area to prepare food solely for delivery and receive no dine-in customers. On the B2B side, it offers restaurants the cooking space and support for order management and food delivery. Restaurants can curb their budget on equipment, storefronts, and operational staff. Located right in the center of large communities, the model gives restaurants access to more customers, thus get more orders.
On the customer side, because cloud kitchen partnered with a collection of restaurants, they can save time waiting for food when order from many restaurants at once. The equipment and operation system at cloud kitchen are authorized with standards. Therefore, customers can rest assured that they will get quality food cooked by restaurant staff under controlled circumstances that ensure food safety.
What’s more about cloud kitchen is that it analyses big data. Restaurants can have access to statistics about customers’ preferences and can utilize the information to adjust their storage and menu. Therefore, the operation requires less space for unnecessary ingredients and generates less food waste.
Cloud Kitchen: Proven Success in Europe and Asia
The idea of cloud kitchen is nothing new and has been proven successful in many countries. In Germany, Keatz kicked off the model in 2016 before expanding to the Netherlands and Spain. Previously, the company secured $13.5 million in funding and declared to expand across Europe. Rebel Foods dominates the Indian market with 205-strong branches in 16 big cities with more than 1,600 partnered restaurants. Gojek started off with 10 locations in Southeast Asia and hoped to make it 50 by the end of this year.
Key for Food Delivery Business
Food deliveries in Thailand also rushed to build a stronghold. Grab Kitchen, by Grab, popped up its first cloud kitchen at Talad Samyan (Samyan Market) with 12 partnered restaurants aiming to serve people within a radius of 8 kilometres from the location in central Bangkok. In the perimeter, LINE MAN – in partnership with food review website Wongnai – outset the facility in Punnawithi with a collection of 13 restaurants. Food business conglomerates, Central Restaurant Group (CRG) adapted “Aroi Dee” shops as cloud kitchen facilities, while Minor Group set up “Sizzler Cloud Kitchen” pinning the location in the northern part of Bangkok with branches at Kasetsart University and Pracha-Uthit 90.
Meanwhile, real estate players do not shy away from this game. According to the property news website Terra BKK, Fraser Property Thailand recently announced a roadmap to invest its commercial properties in Bangkok as cloud kitchen and express delivery facilities. Siamese Asset launched “Bizzie Dish” in Sathorn and Ramintra 64.
Food Industry Beyond Covid-19
It seems that cloud kitchen is here to stay. Existing and new players are marching into the market, and the trend appears unstoppable. As Akihiro Nisugi, a restaurant industry expert at Funai Soken has mentioned in Asia Nikkei, and the outbreak has significantly transformed the way people eat in the “new normal”, and cloud kitchen has become the mean for restaurants to survive during the pandemic and even after.