With cloud kitchens witnessing growth in revenues, hospitality companies are planning to widen their portfolio by adding more brands. The cloud kitchen industry will reportedly grow to $2 billion by 2024 from $400 million in 2019.
Ease of scaling up and lower operating costs are among the reasons for the growing popularity of cloud kitchens, according to sector experts.
Gurugram-based Massive Restaurants’ founder and managing director Zorawar Kalra told FE the pandemic guided the restaurant industry to discover cloud kitchen opportunities. “We can create a cloud kitchen model that recreates a premium dining experience at home,” he said.
Having launched two cloud kitchen brands, Louis Burger and Butter Delivery, Massive Restaurants will soon introduce a pizza brand, a gourmet North Indian cuisine brand and Jiggs Kalra Biryani. The company also operates restaurant brands like Farzi Cafe, Pa Pa Ya, Made in Punjab, BO-TAI, BO-TAI Switch, Younion and Swan.
“The unit economics for cloud kitchens is very lucrative. Our sales from a 300 sq ft cloud kitchen are the same as those from our 4,000 sq ft restaurants, which is why we are allocating 50% of our resources to this side of the business,” Kalra said.
According to Alexander Valladares, chief marketing officer of Mumbai-based Impresario Handmade Restaurants, the pandemic led to a boom in the cloud kitchen business.
While Impresario is currently operating three cloud kitchen brands — Boss Burger, Lucknowee and Tandoori Pizza — it will soon announce another brand, Goodness To Go. Among the company’s popular restaurant brands are SOCIAL, Anti SOCIAL, Smoke House Deli, Salt Water Cafe, Souffle S’il Vous Plait, Slink & Bardot, Prithvi Cafe and Mocha.
“We’ve seen a robust growth for our cloud kitchen brands so far this year,” Valladares said.
VRO Hospitality co-founder Sharath Rice said cloud kitchens emerged as a means to survive the pandemic for the hospitality industry. The Bengaluru-based company, which owns bars and restaurant brands like Badmaash Lounge, Hangover, Plan B, Nevermind, Cafe Noir, Taki Taki and Tycoons, forayed into the cloud kitchen business with two brands, Burger and Beyond and Holy Doh Pizzas, and is planning to start two more, Smashed and Wacky Chang, in the next few months.
“We expect cloud kitchens to add 10% to the top-line revenue and a safeguard against any losses incurred from the physical restaurants,” Rice said.
K Hospitality Corp’s executive director Karan Kapur said a better quality of food and beverage product experience at home, improvement in delivery times, and Covid-19 to some degree, have propelled the growth of cloud kitchens in India. The Mumbai-based company owns restaurant brands like Copper Chimney, Bombay Brasserie and The Irish House.
Prakash Dutta, global chief operating officer, Rebel Foods, said business is growing in India and international markets every year. “We reached our pre-Covid numbers in December 2020 itself and continue to see positive growth in sales and customer love due to exciting new menu additions and scaling to new locations,” he said.
Mumbai-based C2Mac Foods’ chairman Sarvesh Chaubey said it is consumer behaviour that triggered the cloud kitchen business to the next level in India, while Covid-19 played a major role in it.
