Did the cloud kitchen live up to the high expectations? An update from CashDesk.

Cloud kitchen, ghost kitchen or a virtual restaurant. In 2019, the concept was often included in popular lists of emerging trends (Entree Magazine, 2019; Spronsen, 2019). At that time, the concept of cloud kitchens had not yet completely landed in Europe. 2020 has been a year in which a lot has happened in the world of cloud kitchens. Deliveroo has opened over 250 cloud kitchens worldwide (of which 81 in London) and Kitchen Robotics presented a self-learning, robotic kitchen (Food Inspiration, 2020; Warsaw Business Journal, 2020). Time for an update.

 

What is a cloud kitchen?

Cloud kitchen = An efficiently equipped kitchen that fully focuses on preparing and delivering meals for different concepts. Seats and tables or pick-up possibilities are not available.

 

The current global crisis as a boost for cloud kitchens

Where the corona crisis has thrown a spanner in the works for many catering concepts, it has given cloud kitchens a boost. Despite the fact that the market for meal delivery has been on the rise for some time now, the current crisis  accelerated this development. For many restaurants, food delivery is the only way to survive. Cloud kitchens offer a number of benefits in the transition from a traditional restaurant to food delivery. The kitchens are not tied to locations in the center which can make a big difference in rental prices. In addition, several catering concepts can use the same facilities whilst the kitchens are efficiently equipped.

 

Cloud kitchens, “one trillion dollars in 2030”

During a virtual conference, a remarkable prediction was recently made by Euromonitor, leader in strategic market research (Restaurant Dive, 2020). They estimated the potential market value of cloud kitchens in 2030 to be more than one trillion dollars ($1,000,000,000,000!). Cloud kitchens are currently ahead of traditional (delivery) restaurants in terms of affordability, speed and reliability, while consumers are getting used to the idea of a delivered meal ever more quickly. According to M. Schaefer, Euromonitor looks forward to a bright future for cloud kitchens, partly because of such developments.

 

Figuur 1: APAC = Asia-Pacific

 

Similar predictions were made by Coldwell Banker Richard Ellis (CBRE, 2020) as we zoom in on Europe. In 2020, this US investment company expects the market for cloud kitchens in Europe to be worth 400 million dollars. A growth of 85% (!) compared to 2019. One year later, in 2021, CBRE expects to exceed the $600 million mark. However, there is also a downside to these promising predictions…

Lately, several cloud kitchens have gone bankrupt in the United States because the process of scaling up profitably caused difficulties (Entree Magazine, 2020). In Europe, cloud kitchens are not always successful either: for example, cloud kitchen chain Keatz had to close all ten kitchens at the end of 2019 due to a lack of capital (Twinkle, 2019). Moreover, according to Entree Magazine (2020), there is not enough demand in the Netherlands to implement cloud kitchens everywhere.

 

Turmoil in Belgium and Australia because of cloud kitchens

A popular and effective strategy for starting a cloud kitchen is to place a row of containers with all the necessary kitchen equipment (CBRE, 2020). Doing so, a cloud kitchen can easily be scaled up while retaining its flexibility. However, there are also drawbacks to this strategy. From both Belgium (Elsene) and Australia (Melbourne), there are reports of complaints about the cloud kitchens (BRUZZ, 2020; The Age, 2020). People started complaining about the noise nuisance of the scooters driving in and out, working until late in the evening, and about the strong smell of Mexican herbs.

 

 

What are the latest technological innovations?

As cloud kitchens strive for efficiency, this concept is accessible to new technological developments that make automation possible. Especially robots that can be used in the kitchen could be of added value for these kitchens.

Flippy the robot was recently introduced to the market by Miso Robotics (Business Insider Netherlands, 2020). Flippy can control the grill and fryer and is therefore interesting for fast food chains. The robot, however, is not yet focused on the food delivery market and cloud kitchens. Perhaps, after further developments, the robot can also be used by cloud kitchens in the near future. Robot Flippy currently costs over €25.000,-.

 

CashDesk and cloud kitchens

CashDesk delivery software can support cloud kitchens perfectly: multiple menus and websites can be linked to each other so that orders from different websites are imported in the same system. From there on, the orders can easily be forwarded to the appropriate kitchens. Stay in control with CashDesk delivery software!

Did the rise of cloud kitchens trigger your interest and would you like to discuss the possibilities regarding this concept with us? Please contact us for free advice at sales@cashdesk.nl or 00 31 208202196.

 

Conclusion

Positive predictions, negative news and several new technological innovations, what can we conclude?

First of all, it is important to remember that future predictions are always based on all kinds of uncertain factors. Especially now, during the current corona crisis. A market value of one trillion dollars in 2030 should therefore be considered an estimate. On the other hand, these forecasts have been made by professional agencies using complex models. We can assume that the market for cloud kitchens will continue to grow steadily in the coming years.

Then there are the negatives: complaints, turmoil, bankruptcies and skeptics. However, for innovations with such a high level of impact on a particular industry, it’s almost impossible for everything to run smoothly without any kind of resistance. In our opinion, the abovementioned obstacles are not unbeatable. Perhaps, certain things will slow down growth in certain countries (such as the Netherlands) compared to other parts of the world. Ultimately, we expect the cloud kitchens to play an important role in the world of food delivery.

 

Thank you for reading,

CashDesk

 

References:

  • AD.nl. (2020, 24 januari). In deze “spookrestaurants” zul je nooit een gast vinden.
  • BRUZZ. (2020, 9 september). Eerste “dark kitchen” voor maaltijdleverdiensten wordt niet gesmaakt door Elsenaren.
  • Business Insider Nederland. (2020, 20 oktober). Fastfoodzaken opgelet: Robot Flippy kan burgers en frietjes bakken en is nu te koop voor €25.000.
  • CBRE. (2020, mei). Online Food Delivery & Dark Kitchens in the Nordics.
  • Distrifood. (2020, 11 februari). Kolk: AH worstelt met Allerhande Kookt.
  • Entree Magazine. (2019, 1 mei). Nieuwe (horeca)trend: dark kitchens.
  • Entree Magazine. (2020, 17 februari). Horecatrends 2020 deel 1: Dark kitchen.
  • Food Inspiration. (2020, 2 september). Ghost Kitchens een biljoen waard in 2030.
  • Restaurant Dive. (2020, 10 juli). Ghost kitchens could be a $1T global market by 2030, says Euromonitor.
  • SMH.com.au. (2020, 10 april). Dark kitchens in high demand as isolation boosts delivery services. The Sydney Morning Herald.
  • Spronsen. (2019, 7 maart). Dark Kitchens | Virtuele restaurants in opkomst.
  • Sprout. (z.d.). Bright Kitchen | Sprout Startup van het Jaar.
  • TechPulse. (2020, 11 juni). Innovatie na corona: de opkomst van virtuele ‘dark kitchens’. TechPulse Business.
  • The Age. (2020, 22 februari). Dark kitchen for food delivery apps means inconvenience for locals.
  • Twinkle. (2019, 6 december). Keatz zit in de problemen en sluit al zijn keukens.
  • Warsaw Business Journal. (2020, 14 mei). Dark kitchen: new market soon almost double in Europe.