The last couple of years have seen a spurt of cloud kitchens serving a variety of cuisines to the Indian palate. Even though the hospitality industry was struggling in the pandemic, it gave rise to dark kitchens or virtual kitchens, which opted for a new business model, partnering with delivery partners to carve an entirely new niche. According to an analysis by Redseer, the cloud kitchen market size is expected to reach $ 2 billion by 2024. The growth accelerated due to more and more people starting to go online, and it allowed these kitchens to rapidly expand their footprints along with digital food ordering options.
Despite experiencing elevated growth, a few cloud kitchens still struggle to sustain themselves in this competitive market. They constantly experience a downfall in sales and profits while facing several challenges in operating the cloud kitchen business.
It usually takes six to nine months for a cloud kitchen to create a successful impact in the zone of its operation, and it depends upon the factors such as location, menu, food quality, and price. The Cloud Kitchen, however, struggles in the domain of visibility as they do not have any dine-in options, leaving them in an area where they get very little recognition. In some cases, the brands do not have direct access to the customers and also lack direct delivery options. In addition, the main reasons why cloud kitchens struggle are a lack of SOPs (Standard Operating Procedures), high commissions to third-parties, reduced margins, and inconsistency in operations. As the cloud kitchen concept is new and dominantly owner-driven, there is no trained staff sufficiently available in this domain at their disposal, creating a major business challenge to look forward to.
