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CLOUD KITCHEN-The Next Big Thing in Future

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CLOUD KITCHEN-The Next Big Thing in Future

Dr. G Nedumaran1, Professor of Department of Commerce, M. Madhuritha2 Research Scholar, Department
of Commerce, Alagappa University, Karaikudi,

Abstract
Cloud Kitchen is a commercial space is ready to prepare food, exclusively for customer orders or deliveries.
Sometimes referred to as virtual kitchen, shared kitchen, ghost kitchen, or satellite kitchen.There are no dine-in
customers in a cloud kitchen; instead, food is exclusively produced in a commercial kitchen for delivery or
takeout.With the help of Cloud kitchens restauranteurs can easily grow an already existing business or launch a
digital brand.The method of placing an order for food via a website or another application, either for delivery or
pickup, is known as online food ordering. While food delivery platforms have taken centre-stage,“Cloud Kitchen"
is one of the growing business models that benefits from the expansion of food delivery.These kitchens typically
accept orders via online food conglomerates like Swiggy and Zomato etc.The future of cloud kitchen, various
cloud kitchen concepts, and the top cloud kitchen brand in India are the primary topics of this conceptual paper.
Keywords: Cloud Kitchen, Online Food Delivery, Restaurants, Branded Apps.
Introduction
India is a food-loving nation, and Indian cuisine combines elements from many different cultures and customs. The
increase of middle-class consumers with large discretionary income, changing lifestyles, and the accessibility of
restaurants in the area all contributed to the success of Indian eateries. Experts in the field predict that the Indian market
for food delivery services will grow by double to $13 billion by 2025 and that cloud kitchens would grow to be a $2
billion industry in India by 2024 from $400 million in 2019.The food sector has made a number of technical
breakthroughs as a result of rising competition and advancing technology. Cloud Kitchen is one such concept that
has made its way into the culinary sector and took the global restaurant scene by storm. According to reports, the
cloud kitchen concept is one of the restaurant industry's fastest-growing subsectors and is thought to be a more
intelligent way to run a restaurant.

A limited selection of food is provided in the cloud kitchen. Only orders placed through online channels are used
to create the meal, which is then delivered by a variety of food delivery services, including Food Panda, Swiggy,
Zomato, and others.
History of Cloud kitchen
Cloud kitchens are not a new thought; for example, take-out pizza first appeared in the 1950s, and pizza delivery
establishments have been around for many years. India is where the modern cloud kitchen concept initially picked
up stream. With funding from Sequoia, Rebel Foods launched Faasos, a kebab shop, in 2003. Rebel Foods has
over 9 brands now, just received $125 million, and has a $525 million valuation.
Review of Literature
Social media platforms are used by most of the cloud kitchen ventures. Rise in use of social media has provided
opportunity for the growth of cloud kitchen and increase in number of customers. Cloud kitchen attracts customers
for its unique products, for the taste and quality of food, fast food items offered by some of cloud kitchen and easy
availability at the doorstep.(Nitesh Chouhan, 2019)
Cloud kitchen concept is less expensive, cost effective, hassle-free and future is for home delivery food and
takeaway. Cloud Kitchen ventures advertise through social media marketing which is less costly compared to big
hoarding and bill boards. (Kumar, 2019)
Cloud Kitchen concept an emerging trend and modern phenomenon accepted around the world. Compared to
restaurants and fast-food outlets CAGR (compound Annual Growth rate) is noteworthy for cloud kitchen. Multi
cuisine restaurants and chain of restaurant have started implementing the concept of cloud kitchen to be in the
competition. Takeaway food outlets that don’t have dining facility in the premises set up cloud kitchens. Cloud
kitchen works as food production team with space for food preparation and delivery at doorstep of customers or
takeaway by customers. (H.M.Moyeenudin, 2020)
One of the largest opportunities for improvement in infrastructure and processes lies in sustainability - with the
advent of ease of purchase and online-based models, sustainability in terms of the environmental impact of food
delivery has also been called into question as part of the 3 key sustainability pillars and must be addressed in the
coming years (Mirosa and Bremer, 2020).
The cloud kitchen market is projected to reach an evaluation of 2 billion in India by 2024, and high domestic and
international investments into large companies operating on cloud kitchen models reflect this fast growth. COVID-
19 as a pandemic has forced offline businesses to adapt, and concepts such as cloud kitchens to rise (Maurya,
Subramaniam, and Dixit, 2021)
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Objectives of the Study

• To know the concept and Popularity of cloud kitchen in India.
• To study the multiple models of cloud kitchen.
• To know the Top branded cloud kitchen apps in India.
• To access how the cloud kitchens are shaping the online food delivery space.
Concept of cloud kitchen in India
There have been instances when visiting a restaurant was the only option for enjoying a meal with your loved
ones. But thanks to technological advancement, the globe is now at our doorstep. The food service and restaurant
sectors have seen an increase in customers recently, particularly in the wake of the pandemic.Eating at home is
safer, more pleasant, and more convenient than eating out. The idea of cloud kitchens has gained popularity across
the globe and in India in large part due to this rise in demand for home dining. Having said that, setting up a cloud
kitchen is not a simple operation; there are technical and legal considerations that must be made before proceeding.
This article explains what a cloud kitchen is, the fundamental legal requirements to meet before forming one in
India, and the most recent issues that have emerged around them."cloud kitchens" are set up to provide food
exclusively for delivery. Through a website or app, they accept food orders. Despite having no physical location,
these kitchens have made significant inroads into the market due to food delivery services like Swiggy or Zomato.
In the coming years, the value of cloud kitchens is expected to increase by USD 2 billion, according to a survey
by Red Seer Management Consulting. They are also economical. Since a significant portion of hospitality profits
are typically used to pay employees or rent, digitising the dining experience results in lower capital, infrastructure,
personnel, overhead, and operational costs.
Trends driving the popularity of cloud kitchens
In the current race to offer distinctive services and maintain their individual identities, many cloud kitchens have
emerged to prominence as companies that care about the environment. Many cloud kitchens have adopted a sincere
and environmentally friendly philosophy that infuses everything from their cooking techniques to the materials used
to package food. The actual pottery, steel cutlery, re-usable glass jars, paper bags, and cardboard boxes used to deliver
the meals urge consumers to reduce plastic waste and pollution. These initiatives not only aid in maintaining the
flavour and nutritional value of the food but also encourage consumers to lead sustainable, healthy lifestyles. Future
growth of India's food service industry will be heavily influenced by automated deliveries, powerful machine learning
algorithms, and a skilled staff.
Legal Checklist for Cloud Kitchen
• FSSAI certificate: In India, the restaurant and food service business is primarily governed by the Food
Safety and Standard Authority of India (FSSAI). The agency issues the required licence, which must be
used by any food-related enterprise and has a duration of between one and five years. The certificate has
a 14-digit registration number, and it costs no more than INR 100 to register. After they expire, these
licences can be renewed. If your annual turnover is less than Rs. 12 lakhs, you should ideally register as
a Small Food Business Operator (FBO). If more than Rs. 12 lakhs, getting a licence is required.
Documents including a kitchen layout plan, a no objection certificate (NOC), and government identity
evidence are necessary for registration. It is also a reliable quality certification.

• Trade and health licenses: A trade or health trade licence is required to confirm that a business owner
is upholding the standards of health and safety. After submitting the required paperwork, licences can be
obtained from local municipal corporations in the relevant locations. On the municipal corporation's
website, you can submit an application for them. Every person conducting business in India must have
it. Such a licence costs INR 5000 to register and has a one-year expiration date.

• GST registration number: GST registration is now required for all Indian firms, according to the
government of India. Every firm must file taxes, and a GST number that is assigned to your brand is
necessary. It may be sent in once a week, four times a year, or annually. The minimal GST amount in
the food and hotel industries is 5%. The GST composition model also states that cloud cooking firms
must charge 5% GST with no input tax credit (ITC). But they can charge 18%GST if they want to claim
ITC.

• Fire and safety license: Although obtaining this licence is not required for food enterprises, doing so is
recommended to prevent problems in the future. They serve as proof that the kitchen complies with all
safety regulations. Upon submission of the necessary paperwork, the state's fire department may issue it.
• Shop Establishment Act: Cloud kitchens must be registered under the applicable state's Shop
Establishment Act even though they have no physical location. Licenses are granted based on the city
and must be registered within 30 days of the business's launch. It's active for five years.
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• Trademark registration: The most unmistakable mark of recognition your restaurant has is its brand
because there isn't a physical location for people to go to. To prevent brand infringement, business owners
need to register their trademarks. By providing information about their brand logo, wordmark, etc., the
brands can submit applications to the registrar for trademark registration.

Multiple Models of cloud kitchen

• Single-brand cloud kitchen: No storefront, one brand, and one kitchen.
• Multi-brand cloud kitchen: A single kitchen with multiple brands and no storefront.
• Hybrid cloud kitchen:This combines cloud kitchens with takeout restaurants with a storefront for
receiving the takeout food.
• Delivery app owned ‘shell kitchen’: These are cloud kitchens with several brands and no storefront
that are owned by aggregators.
• Delivery app owned fully stacked cloud kitchen: These are rented kitchens with a storefront and
multiple restaurant brands, which is similar to the model of shell kitchens operated by aggregators.

Top Branded cloud kitchen apps in India

SI.NO BRANDED CLOUD KITCHEN FOUNDED YEAR SPECIALITY
APPS

1. Fassos 2011 North Indian, Rolls

and Wraps

2. Behrouz Biryani 2016 Biryani

3. Oven Story 2016 Pizzas

4. Sweet Truth 2017 Desserts

5. Firangi Bake 2017 Italian

6. Mandarin Oak 2017 Chinese

7. The Good Bowl 2018 Rice, Pasta and

Noodles
8. Lunch Box 2018 North Indian and
Chinese
9. Navarasam 2019 South Indian

10. Biryani By Kilo 2015 Biryani, Kebabs,

and phirni.

Shaping of Cloud Kitchen Through Online Food Delivery Space:

• Online Food Delivery Business is Blooming:Starting off, cloud kitchens are less complicated and
expensive than traditional kitchens. For instance, there is no need to spend money on remodelling and
decorating or renting a space in a busy area. Cloud kitchens aren't just affordable and simple to set up.
Additionally, they are quite scalable. They become popular among seasoned restaurant operators as a result,
who seize the chance to launch many brands for little additional expense. In conclusion, cloud kitchens offer
both beginning and seasoned restaurant operators a great economic prospect. As a result, they keep appearing
and growing the online food delivery market.
• More affordable at home-dining:Brick and mortar restaurants require a large staff of waiters, cooks,
delivery drivers, and frequently concierges, which comes at a high rental cost. Their prices are higher than
what customers are willing to pay as a result of all these costs. Actually, 37% of customers claim that the
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high price puts them off from ordering food online. Has already been mentioned, compared to physical
kitchens, cloud kitchens have significantly lower recurring costs. They can accommodate the same number
of customers at once, if not more. As a result of their higher profit margin, cloud kitchens can afford to charge
reasonable pricing for high-quality cuisine.
• Improved Food Quality and Delivery: With minimum in-person interaction, cloud kitchens rely almost
exclusively on the quality of their food and delivery services to build customer loyalty. That’s why
cloud kitchens cook with quality ingredients and employ experienced kitchen staff that can prepare
delicious dishes, fast.
Conclusion
Cloud kitchens have a promising future ahead of them. The landscape of online meal delivery will shift
considerably as the number of cloud kitchens increases. Better food will be available to customers at more
affordable pricing. The popularity of the cloud kitchen concept has greatly increased as a result of the recent
closures of numerous well-known and less well-known cafés and restaurants. The pandemic has provided this
industry the much-needed boost as many housewives have started their own cloud kitchen businesses. Whether
this strategy completely takes over the restaurant industry will be interesting to see.

Journal Reference:
1. Praful Sarangdhar(2021)A Study on Emerging Concept of Cloud Kitchen in India, Sambodhi (UGC Care
Journal), ISSN: 2249-6661, Vol-44, No.-1(III).
2. Nikhil Devrao Wankhede, A Study on Sustainability of Cloud Kitchen in Mumbai region, Kalyan
Bharati, (UGC-CARE List Group I), ISSN No. 0976-0822.
3. KinjalMadhukant Gosai (2020) A Study on Cloud Kitchens as an Emerging Food and Beverage industry,
International Journal of Advance Research in Science and Engineering, Vol.No.9, Issue No.09.
4. Nikhil Chhabra (2020) Rise and the Future of Cloud Kitchens in India: a consumer study, International
Journal of Research in Engineering, Science and Management Volume 4, Issue 7.
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6. Li, C., Mirosa, M., & Bremer, P. (2020). Review of online food delivery platforms and their impacts on
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Web Reference:
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with-robust-technology-and-a-lucrative-business-model/https://www.fimble.io/blog/How-Cloud-Kitchens-Are-
Shaping-The-Online-Food-Delivery-Space

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