With the continuously increasing competition in the food industry, there has been a massive integration of advanced technology to serve customer needs. And in the past few years, the demand for food delivery services is at its peak. Cloud kitchen is one such most modern, useful, and customer-oriented concepts that had brought a storm in the global food industry. Also, if the customer interaction is virtual, then it becomes too easy and quicker to launch any business.
Similarly, in a cloud kitchen business, the businesses can save a lot of costs on legal paperwork, furniture, equipment, staff, etc. There are huge benefits for businesses entering into the cloud kitchen market such as flexible menus, a higher opportunity for experimentation, easy access to customer data, lower financial investment, and leverage of third-party apps for marketing. Even businesses look for companies who provide efficient food delivery app development services so that they can start their cloud kitchen business to earn huge revenues.
Taking into consideration the rising potential of the delivery-only segment of the food business, we have come up with this guide to explain to you the different types of cloud kitchens, features, tech stack required, working model, and cost to develop a cloud kitchen app.
What is a Cloud Kitchen?
A cloud kitchen is based on the concept of delivery-only as there is no dine-in space available for the customers. It functions as a production unit and works as an operational kitchen where the food is delivered rather than providing any sort of dine-in facility. There is neither fancy ambiance nor expensive furniture, all is there is a kitchen where food is prepared to serve the online order requests. Such kitchens are also called virtual kitchens or ghost kitchens.
How Does a Cloud Kitchen Work?
While learning how to build an online cloud kitchen platform, the primary requirement is to understand how the cloud kitchen operates or works. These cloud kitchens have their apps or websites for online ordering, and they can accept the orders placed through various other tie-up food delivery platforms.
At present, several platforms offer restaurants and cloud kitchens to partner with them and increase their visibility and businesses. The order is placed through the app, website, or food delivery platform. As per the availability of the cuisines and the working hours, the order is accepted or rejected by the cloud kitchen.
If the order is accepted, a delivery executive is assigned to that order. Once the order is prepared and packed, it is ready to deliver. The delivery fleet or the executive picks up the order and delivers it to the customer. If the payment option chosen is ‘after delivery’ or ‘COD’, then the delivery agent collects the payment from the customer via cash or online mode.
The customers can also provide reviews and ratings for the order. In any case of query, the customer support executive can be contacted anytime for query resolution.
Read Also: How Much Does It Cost to Develop A Restaurant App?
Popular Cloud Kitchens Around the World
The cloud kitchen industry is already flourishing, and some popular names leading the market, such as:
Why Cloud Kitchen is so Popular?
No doubt, the Food & Beverage (FnB) industry is set to witness another round of food technology revolution. With a massive rise in internet penetration, there has seen a great upsurge in the demand for food delivery services across the globe. There are a plethora of opportunities for both the aggregators as well as for the restaurateurs to earn huge revenues from the FnB industry with modern technology integration. Let’s check some of the industry statistics:
As per the data, in the year 2019, the global market for cloud kitchens was estimated at 43.1 billion U.S. dollars and it is forecasted that the market would reach 71.4 billion U.S. dollars by the year 2027.
Features of a Virtual Kitchen Platform Development
In the process of how to create a cloud kitchen platform, the integration of features holds much significance. The features of a cloud kitchen app are divided into two parts:
- Login or Registration
- Communication Panel
- Add or Remove Food Items
- Login or Registration
- Communication Panel
- Payment gateway
- Order Tracking
Read Also: Top Food App Ideas for Restaurant Businesses in 2022
What are the Different Types of Cloud Kitchens?
In cloud kitchen platform development, there are various types of cloud kitchens one can develop. Depending upon the business type and needs, you can select the type of cloud kitchen. Let’s check its different types:
It is the original and primary form of cloud kitchen where there is a single kitchen and a single brand. There is only one option i.e., delivery-only. It requires extremely low investment as there is no need for front-of-the-house staff as well as no seating place is required. Therefore, the cost to develop a cloud kitchen app based on an independent business model is also low because of the limited requirements of features and functionalities. This business model is suitable for individuals, small businesses, or start-ups who are looking forward to commencing their home-based food & beverages business.
In this shared cloud kitchen business model, various businesses share a commercial kitchen space that is taken on rent. This model is also famous in the name of the commissary cloud kitchen model. In this model, there are multiple businesses but a single kitchen. All these businesses work under the same roof and there is a delivery-only option available. When it comes to the cost part, it also requires low investment as the place for the kitchen is taken on sharing basis that reduces the per head cost because it is distributed among others too. This business model is a preferred choice for small businesses and start-ups.
Cloud-integrated Traditional Restaurant
In this type of cloud kitchen model, the traditional restaurants aim to expand their reach and thus integrate cloud kitchens into their existing brick-and-mortar businesses. There are particularly two different types of this model:
Dine-in at One Place, Delivery from Other
Here, the businesses have two separate operational kitchens to serve the delivery needs and dine-in needs in the best way possible. There are peak hours when there are too many orders, thus, to manage efficiently, the restaurants have a separate kitchen for delivery and dine-in but at the same place.
Same Place for Dine-in & Delivery
In this model type, the in-house kitchen is used for both serving the dine-in customers as well as the online customers. It is a strategy used by restaurants for earning extra income from the same business. The business resources such as staff, kitchen area, tools, etc. used are the same for both.
One Brand with Multiple Cloud Kitchen Outlets
This type of business model has a single brand but there are several cloud kitchens under the same brand in different areas. Such a model is more favorable for businesses that have an increased customer base with bulk demand for online food deliveries. There is more than one kitchen for managing these orders and thus while developing an online app for it, the overall cost to develop a cloud kitchen platform is also increased because there are multiple outlets that needed to be integrated within the app. Such a model is efficient for businesses that serve at multiple locations so that customers can be on-time deliveries.
Single Business with One Kitchen and Multiple Brands
Such a cloud kitchen model is made for businesses that provide their customers with different cuisines. There can be developed separate brands for each type of cuisine. Here, the business is not worried about the cost as what matters is to serve a larger customer base with a separate physical setup to build an individual brand image.
Ghost Kitchen working on Drive-through Model
In this business model of cloud kitchen, there is a storefront for providing takeaway or pickup options to the customers. This is also called a virtual restaurant with a delivery option too.
Anyone interested in earning through a cloud kitchen can use this business model. This concept works on a commission basis where an online platform is provided by a businessperson to all the cloud kitchens and restaurants who want to sell their products via online orders. Here there is no personal space or kitchen owned by the businessperson but there is a fee or commission charged on every order placed by a customer. The cost to develop a cloud kitchen platform based on an aggregator model is usually high as there requires multiple functionalities to be integrated within the application.
The most recognized examples of brands using the aggregator business model comprise Zomato and Grubhub.
Checklist to Develop a Cloud Kitchen App
While looking for online cloud kitchen platform development, several points require enough consideration for a successful start. Following is the checklist to develop a cloud kitchen app:
1. Location & Property
In a traditional dine-in restaurant and a cloud kitchen, the major difference is between the property and the location. There is no need for any prime location rather you can bring the cost down by setting up the cloud kitchen in a relatively small area. All that needed to be considered is the demand for the food should be high in the nearby location of your cloud kitchen so that more orders can be delivered in a short period.
At the time of working on how to build a ghost kitchen, it is necessary to be sure from the legal side too, so that there are no legal hassles in the later stage. And for this, it is essential to acquire all the necessary certifications and licenses for operating efficiently in the food industry. In the case of cloud kitchen, customers do not visit the outlet and thus, if there are food safety and hygiene licenses owned by the business, then it develops their trust to order from the respective place.
Legalities such as NOC, GST Registration, and FSSAI are required to pay attention to. Also, at the time of cloud kitchen software development, make sure you have SSL (Secure Socket Layer) certificate. It helps to make online app communication secure as non-secure websites are penalized by search engines.
Because of no dine-in options, there is no need for a huge staff to handle the cloud kitchen. Only a few people are enough to manage the day-to-day operations. But for the smooth functioning of the virtual kitchen, your hired personnel must be capable to handle pressure and deliver the best results. Following is the list of staff members required for developing a cloud kitchen platform:
- Delivery Partners / Delivery fleet
- Housekeeping staff members
- Operation Handlers
When any visitor visits the site or uses the application, it indicates that the person is hungry. And now to convert that potential customer to your target customer, you are required to implement various promotional offers, discounts, mouth-watering images, and ease of placing an order.
4. Packaging & Kitchen Equipment
What all kitchen equipment would be needed depends upon the cuisine you are serving to the customers. The primary equipment required comprises a stove, refrigerator, oven, storage facilities, electric items, utensils, cutting corners, and many more.
The business must pay considerable attention to packaging as in the food delivery business, customers review the food based on the packaging first and then the taste. To keep the food safe, the packaging needs to be done carefully. The cloud kitchens are also required to provide essential disposable cutlery with the order such as plates, spoons, containers, etc.
If the kitchen is equipped with all necessary equipment and packaging essentials, then the preparation is quicker and so is the delivery of the orders. Therefore, businesses must understand that packaging plays a vital role in fetching the attention of the customers.
5. Integrated Restaurant & Inventory Management System
To make the restaurant app solution work smoothly, seamlessly, and efficiently, there is a need to have integrated restaurant management and inventory management systems. RMS will help in managing the orders, accounting, online platform, marketing, billing, and loyalty programs. There are various RMSs one can use such as 7shifts, CAKE, Toast POS, etc. And IMS will support controlling the supply chain and check up on the inventory consumption and future demand.
6. Integrated CRM, Payment, and POS systems
Integration of POS systems, CRM systems, and payment gateway is the primary need for cloud kitchen platform development. CRM system will support effective customer engagement and develop better connectivity with the brand. POS system allows integration of multiple tools and helps in easy management of various distribution channels in a single place. In the case of a payment system, there should be both options available for the customers i.e., before and after the order is received. Thus, various payment options and gateways needed to be integrated such as cash delivery options, online payment through debit or credit cards, and wallet payments.
7. Order Analysis, Minimum Order & Advance Orders
The cloud kitchen apps need to be smart so that they can track and analyze the customers’ eating habits. Such analysis of previous orders helps businesses in making better strategies to target customers.
Also, it is essential to give an option of advance order placement as this will help customers to place bulk orders in case they have plans for gatherings or parties. It will also help restaurants to remain prepared for such big orders in advance.
When it comes to ordering placement, there must be a minimum value fixed so that the restaurant does not pay so huge charges for the delivery fleet, fuel, and cooking, if the order is too small for earning a good margin. Therefore, if there would be a minimum order value concept, it will help businesses to save themselves from unnecessary losses.
8. Test & Promote
In the process of how to build a cloud kitchen platform, it is essential to test and promote the cloud kitchen application efficiently. The primary aim behind the restaurant app development solution is to bridge the huge gap that exists between businesses and potential customers. Make sure that the application passes all the tests before the final launch. Such tests will help in the identification of errors and bugs, that can be rectified once the app is sent back for updates and changes for smooth functioning.
It is also necessary to promote the app so that more people will come to know and convert into potential customers. For marketing purposes, there can be used social media handles, hoardings, advertisements, billboards, etc.
How Much Does Cloud Kitchen Platform Development Cost?
The answer to how much does a cloud kitchen cost depends upon the features integrated and the technologies used in the platform development. Following is the list of some must-have technologies needed to develop a cloud kitchen platform like Kitopi:
Point of Sale (POS)
With POS, the orders can be accepted from numerous channels. This system helps to keep a proper track of all the orders attained from various platforms. It will help in knowing which platform will be most suitable for the business.
Kitchen Display System (KDS)
This is used to have a virtual replacement for the menus that are served in the restaurants. Customers can view a similar sort of menu virtually and can select the cuisine they need to order.
Geolocation is the most mandated technology for every cloud kitchen app development as it eases the process of food delivery, tracking the vehicle, and helps the customers to get real-time location updates and ETA.
Inventory Management System
This technology helps to maintain a well-defined record of all the inventory a restaurant has and the stock that would be required in the future. This also supports effective supply management and reduced wastage. When you hire a custom software development company for your project, they make sure such technologies are integrated into the app for improved business results.
Courier Mobile App
This technology integration helps to automate the shipping process and keep a record of all the necessary updates of product deliveries. Even there can be offered tech-based and automatic solutions for logistics. There is 24*7 support available with chatbots for customer ease. There is a complete tracking of fleet movement so that customers can have on-time deliveries. This technology might increase the cost to develop a platform like Kitopi but it makes the app highly functional.
Depending upon the integration of features and technology, the cloud kitchen app development cost ranges from $15,000 to $30,000. It also depends upon the cloud kitchen platform development company you choose for your project as one with expert app developers and a good portfolio may cost a little on the higher side, but it would surely help you to get a scalable solution for your business.
The Cloud kitchen does not need a huge setup but building an app for the cloud kitchen is a good investment. Therefore, all the aspects must be thoroughly checked to have a scalable app. Hope the guide had helped you understand all the required aspects for developing a cloud kitchen platform.
SemiDot Infotech is a renowned mobile app development company that provides proficient food delivery app development as well as cloud kitchen app development services to help budding entrepreneurs, start-ups, and well-established businesses run their business on global platforms.