Cloud Kitchen Market

The global cloud kitchen market size was valued at $0.83 billion in 2019 and is anticipated to reach $2.23 billion by 2027 with a CAGR of 13.4% from 2021 to 2027. The market is expected to see the highest demand share coming from China and India, which currently hold more than 50% market share.

Cloud Kitchen is a place involved in preparing food and delivering it to the doorstep. In this process, the orders for food delivery are taken through online platforms or phone calls. These are a delivery-only restaurant and does not provide dine-in facilities, rather this cloud kitchen revolves around the online food aggregators, website or mobile applications. The extensively used food delivery services, Swiggy and Zomato, both provide infrastructure to cloud kitchen brands. Zomato initiated Zomato Infrastructure Services (ZIS) in 2016, whereas Swiggy launched Swiggy Access in 2017.

Online food ordering is preferred mode these days as people are busy and they are attracted towards less time-consuming approaches. When consumers are surveyed, they responded that online ordering saves much time. Moreover, the coupons and promotional offers available are more of desirable addition to the deal. Digital food ordering has transformed the food industry and this is expected to grow at annual rate of approximately 20% by the end of the forecast period 2021-2027.

How do things stand in the market?

The food sector has seen a considerable revolution in the recent past. Customers can now order food online which has numerous advantages over the traditional methods such as drive-in or visiting restaurants and cafes for dine-in. This results in an increase in the total sale value per order. Moreover, the cloud kitchen platform provides excellent customer services by offering an end-to-end Customer Relationship Management (CRM) system to provide real-time details of all the orders. Cloud kitchen also offers the advantage of pocket-friendly meals which can be accessible all the time from all the places which result in sharp rise in the graph of the market. Apart from developed nations, developing economies like India have also adopted cloud kitchen services as well. It was found that cloud kitchen market size was approximately $400 million in 2019 and this number is projected to touch $2 billion by the end of the forecast or even that period. The market can be segmented on the basis of the following segments:

By Type 

• Independent kitchen
• Commissary/Shared kitchen
• Kitchen pods

By Nature 

• Franchised
• Stand-alone

By Product Type

• Chicken
• Mexican/Asian Food
• Burger/Sandwich
• Pizza/Pasta
• Others

The aforementioned drivers along with profitable offers, easy availability, and increase in users on social media sites provides lucrative opportunity for growth of cloud kitchen market. Although cloud kitchen is impacting the health of people because as per the studies, people mostly prefer fast food while ordering food from outside, there is a high level of carbohydrates in packaged juices or carbonated drinks which can increase blood sugar level. Also, there are high levels of fat and cholesterol in fried food items, which in turn increases the risk of heart disease. Thus, health consciousness is a major constraint in market growth.

The rising demand for international cuisines like Thai, Mexican, Italian and Chinese around the globe has made the independent cloud kitchen hold the maximum share in the market. By nature, a franchised segment dominated the market in 2019 and expected to retain its position as it provides the advantage of lower capital requirements and business expansion. Among all the products, burgers/, have a considerable share in the market owing to their easy handling at all places including educational institutes, workplace and recreational spaces, and rising demand for fast-food products around the globe.

Regional analysis of the market highlighted that North America has the maximum share of the market due to improved lifestyle, high consumer buying power, and high adoption of tech-savvy ordering systems. However, Asia-Pacific is expected to expand its share in the market in the forecast period owing to the rise in young population and the great demand for online food items.

While providing a service for any profit-oriented approach the companies have to maintain the minimum chances of uncertainty and maximum growth. Several key players involved in the cloud kitchen market are Adrak, All Plants, Bella&Bonna, Cloud Kitchen, Dahmakan, DoorDash Kitchen, Frichti, FoodCheri, Ghost Kitchen Orlando, HungryPanda, i-lunch, Keatz, Kitch, Kitchen United, Kitopi, Nosh, Parsley Box, Rebel Foods, Starbucks (Star Kitchen), Taster, The Food Corridor, Wamda, Wetaca, Zuul Kitchen and other prominent players 

What competitors are doing?

• DoorDash Kitchen recently established the Restaurant Advisory Council (RAC). It comprises a group of small business leaders who advise on key initiatives and offer critical feedback on programs and products. This helps the cloud kitchen to build more prominent partnerships to aid in the growth of restaurants.
• Starbucks (Star Kitchen) widened its Uber Eats pilot across the United States. Moreover, it expanded the delivery program to China as well. The company prioritize maximum accessibility and initiated the ghost kitchen in China via a partnership with Alibaba.
• Rebel Foods partners with Sierra Nevada Restaurants, which holds the India master franchise of quick-service restaurant chain The Wendy’s Company with an aim to launch 250 cloud kitchens across India. This strategic partnership will expand the business of Rebel foods and provide Wendy’s the advantage of the pan-India scale.