Cloud kitchen: New investments and expansions to serve wide audience

The cloud kitchen is becoming a new normal across the world with availability of food ordering and delivery apps and changing consumer preferences. Market players, investors, and startups have realized the changing behavior of customers, in which, they prefer food to be delivered at their homes instead of dining in cafes or restaurants. The demand for home delivery is growing with availability of apps and market players have been redesigning their business models. Huge investments are necessary to redesign business models and cater to the demands of wide audience. Startups and established players have been investing money to carry out expansions, hire leaders that would help them scale up, and serve maximum number of customers. The market for cloud kitchen is gaining traction with new investments and expansions that would take place in next few years. According to the report published by Allied Market Research, the cloud kitchen market is expected to reach $71.4 billion by 2027. Following are some of the activities that would shape the course of industry in coming years.

Identifying the opportunities in the rising cloud kitchen industry, market players have been devising strategies to enhance its share by catering to changing demands of customers. Central Restaurants Group, one of the leading fast-food restaurant chains in Thailand, outlined its plans of setting up 100 cloud kitchens across the country within the next five years. The firm joined hands with a local restaurant chain Krua Khun Toi for preparing meals and carrying out the delivery service to customers.

The company devised a plan, according to which, it would set up nearly 50 cloud kitchens during the first phase of the expansion by the end of 2022. First 10 kitchens are expected to be opened by this year. The firm opened its first kitchen of this type in Bangkok's Lad Phrao district. The company would spend nearly 500 million baht for achieving its target to open up 100 cloud kitchens by 2024. This plan is aimed at consolidating its food delivery business and enhancing its market share in the country’s food delivery services industry. Not only Central but also other giants such as Grab and Gojek have entered the industry to meet the increase in demand of food delivery.

Startups have been trying gain foothold in the industry and raising funding for expansion and branding activities is one of the crucial steps along the way. BigSpoon Foods Private Limited, the cloud kitchen startup from India raised $2 million in a Pre-Series A funding round. This funding is expected to utilize for product development and branding.

BigSpoon Foods operates various cloud kitchen brands such as Oven & Grill, Makhni Brothers, and Meals101. The startup has been operating in three cities such as Surat, Baroda, and Ahmedabad. It will utilize a part of the funding for expansion in cities such as Indore, Surat, Jaipur, Bhopal, Pune, and others. Moreover, it plans to utilize part of investment for building technology and robotics-based solutions for better processes and hiring leaders across various sectors that would enable them to scale up. The company would begin a couple of new brands that can fulfill the demand from wide audience. It has plans to deliver nearly 50,000 orders each month by the end of 2020.

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