Cloud Kitchen Market Research Report: Forecast (2023-2028)

Market Definition

Cloud kitchens, also known as virtual kitchens or ghost kitchens, work exclusively for food deliveries and have no storefront. While the concept of cloud kitchens has been for several years, the emergence of Covid-19 in 2020 was the most prominent propeller for this industry, as stay-at-home orders got enforced for public safety. With perks like reduced rentals & overhead costs, less initial investments for setup, & minimal manpower required, as compared to a dine-in, various restaurants are adopting cloud kitchen models to cater to the ever-increasing online food orders worldwide.

Market Insights

The Global Cloud Kitchen Market is expected to grow at a CAGR of around 12.42% during the forecast period, i.e., 2023-28. Most of the market expansion would be propelled by the rising disposable incomes, especially of the young generation, coupled with lifestyle changes and growing consumer inclination toward fast food & snacks. Consequently, the ever-increasing online food delivery orders are leading to fewer visitors for dine-in, i.e., instigating restaurateurs worldwide to shift to delivery-only models and, in turn, driving the cloud kitchen industry.

The lack of consumer interest in home-cooked meals due to the corporate culture & long working hours is the prime reason behind the rapidly surging online food orders. More and more people are becoming aware of the benefits of cloud kitchens over conventional models, such as better profit margins and enhanced flexibility. Various strategic alliances are also being carried out between prominent brands to improve ghost kitchen services, which, in turn, is boding well for the industry.

The integration of inventory management systems, KDS (Kitchen Display Systems), and POS (Point-of-Sale) to improve communication, fast-track various kitchen operations, & prevent delays in order processing is also expanding the industry. Moreover, the increasing utilization of technologically advanced tools by restaurateurs in order to derive consumer insights to analyze & update their menu as per popular choices and incorporate higher margin items would also create profitable prospects for the Global Cloud Kitchen Market in the coming years.

Lucrative Growth Opportunities for the Global Cloud Kitchen Market

• Greater Consumer Preference for Online Food & Takeout

Cloud kitchens are becoming a contemporary culinary environment for numerous food & beverages industries worldwide. With the convenience of delivering food & beverages through delivery and takeout, without the need for a proper space, various companies are emerging, exercising the perks of lesser investment and greater demand, demonstrating lucrative prospects. Moreover, better efficiency of staff and the facility of brand-tie-ups under one roof are further attracting substantial investments in the cloud kitchen industry.

• Increasing Technological Support & Dependency to Yield Higher Profits

In order to serve the maximum number of customers and automate kitchens, advanced technologies are being integrated into cloud kitchens to minimize costs, improve efficiency in food preparation, packaging, & delivery, and widen reachability in building supply chains. Consequently, it is generating lucrative opportunities for the leading players to yield significant profits in the rapidly expanding cloud kitchen market globally.

Market Segmentation

Based on Type:

• Independent Kitchen
• Commissary/Multi-Brand Kitchen
• Kitchen Pods
• Outsourced Kitchen

Of all types, independent kitchens hold the dominant share of the Global Cloud Kitchen Market, and the same trend is likely in the forthcoming timeline. These wholly-owned kitchens of a single brand don't possess a dining space, rely extensively on third-party delivery channels, and mainly cater to customers who desire a specific type of cuisine. Their rapidly growing adoption worldwide owes to the fact that they aid in reducing the operational load on existing branches of restaurants that deliver food to walk-in customers.

Several food brands worldwide have started penetrating the cloud kitchen industry in order to cater to the increasing online food delivery orders and provide the desired food quality & service to their customers. Rising consumer preferences for international cuisines & fast food and the surging number of standalone food brands operating from a single location are projected to amplify the adoption of independent kitchens and, in turn, fuel the cloud kitchen industry expansion over the forecast years.

Based on Nature:

• Franchised
• Standalone

Here, franchised cloud kitchens hold a significant market share, mainly due to the less capital required for franchising a brand, owing to which more & more stakeholders are showing greater interest in these cloud kitchens. Large restaurant chains with high brand equity and offerings, such as international cuisines, customized dishes, & excellent service quality, are becoming increasingly popular globally and, consequently, instigating stakeholders to opt for franchised cloud kitchens.

Several stakeholders are becoming aware that investing in well-established brands involves fewer risks as franchisors provide adequate training & support associated with aspects like supplies, equipment, staff, & marketing. Therefore, the ever-growing popularity of franchised kitchens is significantly contributing to the cloud kitchen industry expansion worldwide.

Regional Projection

Geographically, the Global Cloud Kitchen Market expands across:

• North America
• South America
• Asia-Pacific
• Europe
• Middle East & Africa

Of all regions globally, Asia-Pacific is projected to be the fastest-growing Cloud Kitchen Market during 2023-28, with India & China as the leading contributors. Burgeoning disposable incomes, the massive consumer base, increased penetration of the internet & smartphones, hectic lifestyles of the working population, and consequently, rapidly rising online food delivery orders are the major driving forces for the industry. The advent of Covid-19 exploded the popularity of cloud kitchens in Asia-Pacific as all dine-ins got shut and instigated the establishment of various shared kitchens across the region.

The young population, especially in India, China, & Japan, is the most prominent end-user of online food delivery services and thus significantly contributes to the rapidly expanding cloud kitchen market in Asia-Pacific. Additionally, the booming economies of these countries and ever-growing consumer inclination toward international cuisines further indicate lucrative prospects for the top players operating in the industry. Moreover, the easy availability of cheap labor and generous financing by investors due to favorable norms would also bode well for the Asia-Pacific Cloud Kitchen Market in the coming years.

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