The American dinner table in the last century has changed from home-cooked dinners to microwavable meals to fast food and is now on its way to getting everything delivered – thus giving rise to a mega-trend in delivery-only, cloud kitchens that serve this growing need.
- UBS predicts that online food delivery is a mega-trend set to grow 10x over the next decade – from $35 billion to $365 billion
- Delivery-only, cloud kitchens are uniquely positioned to capture a large percentage of this growth in online food delivery
The business model of the traditional, sit-down restaurant is not well-equipped to satisfy the exponential growth in consumer demand for delivery food. During peak lunch and dinner rushes, restaurants struggle to juggle the online orders from GrubHub and DoorDash while ensuring their sit-down customers are satisfied.
Cloud kitchens are a streamlined alternative. These are delivery-only restaurants that operate out of commercial kitchens, shared kitchens, or other people’s restaurants and sell food entirely via online ordering portals and delivery apps such as GrubHub, UberEats, DoorDash, and PostMates.
According to CNBC, without the need for prime, “Main Street” real estate or wait staff, cloud kitchens eliminate upwards of 50-90% of the fixed costs of operating a traditional restaurant.
Essentially, cloud kitchens turn restaurants into the software. The beauty of software is that it’s created once and downloaded infinitely.
Kitchen United and CloudKitchens build commercial kitchens all over the nation in order for food brands to scale their operations in the same way that software scales. If a kitchen finds success in the Chicago market, they can rent a Kitchen United space in Atlanta, New York City, etc. It’s like franchising without the slow process of scouting locations.
Restaurant Groups such as REBEL Foods see the value in cloud kitchens and are beginning to cannibalize hit food brands, readying themselves to scale into new markets.
“From a marketer’s perspective, cloud kitchens are fascinating in their ability to capitalize on culinary success and trends incredibly fast. Whether expanding a hit restaurant nationally, launching a new food brand, or capitalizing on food trends, cloud kitchens allow for this to happen nearly overnight.” – QuHarrison Terry, Growth Marketer at Mark Cuban Companies
The data and insights in this article were gathered by Trends Exchange. They have created a report which details the emerging cloud kitchen trend, potential business models, the major players in this space, as well as the Wall Street incumbents who will benefit from this trend.
You can find the full report here: https://www.trends.exchange/cloud-kitchens/
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