What You Need to Know About Cloud Kitchens
The millennial generation has been taking more and more of their business online, and food purchases are no exception. With the pandemic still in full swing, food delivery is becoming more popular, and restaurants everywhere are figuring out how to capitalize on this. One such way is to rent a kitchen space with CloudKitchens. Cloud Kitchens owns and maintains multiple warehouse-like kitchens, renting out space to any restaurateurs that seek delivery optimization. We’ll get more into the logistics soon, but the basic concept is simple: you pay rent in their shared restaurant space, they provide all the equipment you need to receive and prepare food, and their drivers even handle the delivery itself. This lowers overhead and allows you to capitalize on delivery for greater profit.
What are they?
Picture a big warehouse with dozens of kitchen spaces, all bustling with chefs from different restaurants or brands operated by the same restaurant. Some of these may be a delivery-only side of a typical brick-and-mortar restaurant, while others may be exclusively virtual restaurants. Either way, they have the same goal in mind: to get food out the door and to the customer as efficiently and proficiently as possible.
Utilizing services like Grubhub, DoorDash, UberEats, or a restaurant's own online ordering system, orders come in to each station individually. Items available for order are generally optimized for quick production, and once they're ready, Cloud Kitchens has its own army of delivery drivers on hand to hit the road.
What are the main advantages of this business model?
The most obvious advantage of renting from one of Cloud Kitchens’ shared restaurant spaces is reduced overhead cost. Rather than renting an entire storefront with seating and such, you can rent a small space with everything you need and nothing you don’t. No paying to light a whole dining area no one is using, or for front of the house staff that barely see any action. With multiple brands operating under one roof, many ingredients can be ordered wholesale, lowering costs even further. Plus, Cloud Kitchens are generally located in less expensive areas just outside of the community you’re serving, so the space is cheaper to begin with. All of this means you can either start up a restaurant or expand your existing one into a new market with much less risk than if you were to purchase or rent a brick and mortar location.
On top of that, Cloud Kitchens provides pretty much everything you need except recipes and a chef. The space is already set up with individual cooking stations, and they maintain, clean, and protect the entire facility for you. They also provide the tech you need to receive and track delivery orders, as well as compile the data and find trends in your orders. For example, if their software tracks a higher number of orders on one specific dish every Sunday morning, it will help you plan your ingredient orders and labor accordingly.
Think of it like the difference between paying for individual offices for every employee of a company, versus consolidating them all into one space with cubicles. It may not be the most glamorous, but glamour isn't the goal. Lowering costs is, and operating inside a Cloud Kitchen location certainly does that.
How profitable can opening a virtual space be?
It depends on your unique situation. The restaurant industry is competitive enough as it is; you probably know all about the failure rates of young restaurants. Throw in the rising popularity of Cloud Kitchens and online ordering, and you've got an extremely difficult market to tap into. Plus, if you're relying on third party apps for orders, you're often at their mercy when it comes to user experience, so you don't even get much say in marketing. So, if you are starting with no brand recognition, that's a whole challenge in itself. Having a physical location is often crucial to stirring initial interest in your restaurant. Therefore, if you're trying to start a brand new restaurant without any physical store or dining space, you're probably going to struggle no matter how convenient it is to rent out a space in a Cloud Kitchen.
However, if you already have an established brand but need more capacity to churn out delivery orders or expand into a new market, this could be a great option. It's even better if you want to operate multiple brands under one restaurant and can scale your operations as such. As discussed above, a physical space comes with many costs that don't help with delivery in any way. Cutting those out and paying a flat rental rate with Cloud Kitchens is an easy way to lower overhead and simplify logistics. Combine these factors with the broad reach their delivery system facilitates, and you've got a recipe (no pun intended) for success and expansion.
So the long walk for a short drink of water is: yes and no. As with everything in life, it depends on your specific needs.
How do I start?
So are you thinking you might want to start producing some cloud food? Well, Cloud Kitchens boasts that they can help you get your restaurant running in just one month, and even break even in six months or less.
If you already know a specific area you want to move into, you can schedule a tour with Cloud Kitchens to see what their facilities have to offer. If you rent from them, you'll just need to hire a staff that can handle quick turnovers and develop a menu suited for rapid production. Then, as Cloud Kitchens claims, you handle the food, and they'll handle everything else.
Can I use my current location?
You're in luck. With the help of our team at Superorder, you can use your existing operation, however big or small, to launch a virtual restaurant with multiple brands. This means you'll have even more chances to reach consumers with less investment.
And if you thought opening a location with Cloud Kitchens sounded easy, wait until you see how simple Superorder makes everything. We'll handle branding, website design, menu design, and more. You name it, we can make it happen. All you have to do is keep doing what you're doing, but for more customers and more revenue. It's not even turn-key, it's in high gear from the start.
