The Only Guide You Need to Build an Online Cloud Kitchen Platform in 2024

The food industry is undergoing a continuous transformation, and one of the most prominent trends is the emergence of the Cloud Kitchen concept. These delivery-centric operations, virtual or ghost kitchens, function solely through online ordering and delivery services.

The cloud kitchen platform offers significant cost savings and operational efficiency by eliminating the need for a physical dining space. This concept flourished during the recent pandemic when dine-in options were restricted, and food delivery demand soared.

Even with the return to normalcy, the cloud kitchen business model thrives. A report by ResearchAndMarkets anticipates the global cloud kitchen market to reach a substantial $118.5 billion by 2027, with a projected compound annual growth rate (CAGR) of approximately 13%.

Given the burgeoning cloud kitchen market, entrepreneurs have a compelling opportunity to enter the virtual kitchen space.

In this guide, we’ll discuss everything you need to navigate the planning and development process for a successful cloud kitchen app.

What is a Cloud Kitchen and how does it work?

Understanding what is the meaning of cloud kitchen and how it works is crucial before we delve deeper into how one can build a cloud kitchen platform.

Cloud kitchen, also referred to as a virtual kitchen, ghost kitchen, or delivery-only restaurant, prepares and delivers food only for online orders.

These kitchens don’t have a physical storefront, instead, they work out of a large kitchen facility and reach customers through online ordering and delivery systems.

Due to its lower overhead expenses, increased efficiency, and flexibility, the cloud kitchen business model has grown in popularity in recent years.

Cloud kitchens can cut costs on rent, utilities, and staffing by doing away with the need for a physical storefront, freeing up resources to concentrate on producing high-quality food with prompt service.

To reach consumers, cloud kitchens frequently collaborate with online food delivery services like Uber Eats, Grubhub, or DoorDash. These platforms offer cloud kitchens access to a large customer base as well as marketing and promotion opportunities to draw in new clients.

The growing demand for online food delivery and the convenience it provides is particularly well-suited to the cloud kitchen platform model.

Additionally, since the business is not constrained by the physical location and constraints of a traditional restaurant, it permits more experimentation with various cuisines and menu items.

The Cloud Kitchen Market

According to Statista, the revenue in the Online Food Delivery market is forecasted to reach US$1.22tn in 2024. It is projected to exhibit a compound annual growth rate (CAGR 2024-2029) of 9.49%, resulting in an estimated market volume of US$1.92tn by 2029.

In 2023, the online food delivery market only in India reached $ 7.4 billion.

The delivery industry has been seen as the fastest-growing food sector in the last few years. Before COVID, half of Americans ordered food delivery almost once a week.

However, during the pandemic, this changed drastically. Due to the lockdown and everything, restaurant owners had to find new ways to operate properly. This is when the cloud kitchen platforms came into being.

It has become so popular that famous cloud kitchen brands like Fasoos, Behrouz, Oven Story, and more now exist.

Companies like Zuul Kitchens and Kitchen United have built virtual food halls around Chicago and New York City, where diners can order from their local favorites simultaneously.

Even big celebrities like Wiz Khalifa and Rachael Ray made an entry into the Cloud Kitchen business with HotBox and Rachael Ray to Go. Today, in the US alone, hundreds of cloud kitchens are running successfully.

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Different Types of Cloud Kitchens

Cloud kitchen platform is a relatively new concept that has grown in popularity. They offer many benefits over the traditional dine-in restaurant approach. Here are some of the most common types of cloud kitchen business models:

1. Independent Cloud Kitchen

The Independent cloud Kitech business model is a classic model where there is no restaurant with a physical component. It includes a single brand that prepares its food in a kitchen according to the customer's orders that it receives online. It’s a self-reliant business model in terms of receiving orders and delivering packed meals.

2. Multi-brand Cloud Kitchen

Multi-brand cloud kitchen is based on closely analyzing food consumption trends in a specific locality. The most popular or ordered cuisines in a given area or demographic are identified and catered to. Food preparation happens in a shared commercial kitchen where different brands prepare and package the meals. It is a strategic and efficient model that generates profits and saves costs.

3. Hybrid Cloud Kitchen

The hybrid cloud kitchen model combines a takeout restaurant with a cloud kitchen. It works like a cloud kitchen, but it also has a front that enables customers to come and get their food.

Food delivery is also provided. The delivery process is either independent or through an aggregator food delivery app such as Swiggy or Zomato This cloud kitchen platform model has a single brand working in a single kitchen. Still, it also has multiple walk-in outlets that offer both takeaway and delivery services.

4. Cloud Kitchens owned by Delivery Apps

It is a cloud kitchen model in which a delivery app company leases or purchases a conveniently located kitchen space, which allows various up-and-coming food brands to use it. The orders are placed via these mobile apps, and the delivery fleet also belongs to these apps.

This model involves a symbiotic relationship between the app company and the food brand. The food brands use the app’s reach to attract more customers, and the app uses talent to provide its users with more options.

5. Popular Cloud Kitchen Examples

According to a report by RedSeer Management Consulting, 3500+ cloud kitchens are currently operating in India. These cloud kitchens are set to be a $2 billion industry in India by 2024, up from $400 million in 2019. Here are some of the most popular cloud kitchen platforms today:

1. Rebel Foods

Rebel Foods started as Faasos in 2011 and is now one of India's biggest cloud kitchen brands. It has 11 cloud kitchen companies under its umbrella. Some are Faasos, Sweeth Truth, Behrouz Biryani, Oven Story, etc.

They believe in providing technological infrastructure for exquisite culinary craftsmanship. As of July 2021, they operate 320+ cloud kitchens across India.

2. Fettuccine

This cloud kitchen is famous for its delicious homemade pasta and paninis! They are available on Zomato and Swiggy, but customers can also order directly with them.

3. Biryani By Kilo

Biryani by kilo is the biggest biryani delivery cloud kitchen chain in India. It is available in 22 cities for delivery and dine-in. Their complete menu focuses on providing the most authentic biryanis to their customers, particularly in earthen pots. They excel in Lucknowi & Hyderabadi biryani. They focus on the final product and the entire process of making it and appealingly presenting their dishes.

4. Sweet Truth

This is another popular cloud kitchen in India. It is famous for its range of cakes, cheesecakes, pastries, brownies, dessert jars, and more. They have even introduced seasonal menu items from time to time.

5. HOI Foods

They have a range of unique multi-cuisine meal combos for every day. Ordering lunch at the office & dinner at home is wholly sorted with them. They have the best ingredients and seasonings that treat your taste buds after a long, tiring day at a cost-effective price.

Also Read: How Much Does It Cost to Build Grocery Store Billing Software?

Benefits of Cloud Kitchen Platform

As previously stated, a cloud kitchen service platform operates without a physical location and provides online ordering and delivery services. It may run around the clock or during particular time periods, making it ideal for late-night deliveries.

Because cloud kitchens do not require a shop front, the expense of putting up a brick-and-mortar shop, including decor, maintenance, and serving staff, is significantly reduced. It allows the owners to focus on the quality of the cuisine and its prompt delivery.

Moreover, because cloud kitchens can be used at specified times for specific reasons, they help to lower rent, infrastructure, and equipment costs.

How the Cloud Kitchen Model Generate Revenue

A cloud kitchen's income model is similar to a restaurant's. The main difference is that the former does not entertain dine-in clients.  A virtual kitchen's revenue streams and costs are comparable to a traditional restaurant's.

This kitchen business model earns revenue in the same manner as a regular kitchen. It sells food on a per-order basis. The kitchen can also earn money through subscriptions. Customers who subscribe to the cloud kitchen's meals, for example, can pay for their food weekly or monthly.

Aside from that, cloud kitchens that operate independently may charge consumers a delivery cost.

Must-Have Features of a Cloud Kitchen Platform

Before we start discussing how you can create an online cloud kitchen, it’s essential to have a clear understanding of your target audience and their specific needs.

This will help you identify the primary features that your cloud kitchen application should include to give the best possible experience for your clients.

Cloud kitchen software's main features include online ordering, delivery tracking, and payment connection. Let's take a closer look at each.

1. Online Ordering

Online ordering is one of the most important features of the application development in cloud computing for cloud kitchen platform, allowing customers to place orders through the app rather than calling or visiting the restaurant.

With the ability to view menu items, alter orders, and make special requests, this feature must be simple to use, intuitive to navigate, and user-friendly. To fulfill the needs of all clients, it should be optimized for mobile and web platforms.

Also, this feature should support one-click ordering for repeat customers and options to save customers' previous order information.

2. Delivery Tracking

Another essential feature of the cloud kitchen mobile application is delivery tracking, which allows customers to track their orders in real-time and provides convenience and transparency.

Customers should be able to track the status of their orders from the moment they are placed if this feature is linked to the one that allows for order placement.

It must also provide real-time information on the order's status, expected delivery date, and any potential delays. The ability to track the delivery executive's location and estimated arrival time should also be offered.

3. Payment Integration

A payment gateway, which allows consumers to pay for orders directly from the app rather than using cash or credit cards is a crucial feature of a cloud Kitchen service platform.

This function must be safe and comply with all applicable payment rules. Multiple payment methods, such as credit/debit cards, net banking, and digital wallets, should be accepted.

It should also provide options to save the customer's payment details for future transactions.

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How to Build a Cloud Kitchen App?

Building a cloud kitchen platform follows a process similar to creating any other application from scratch.

However, initial stages are streamlined in clone applications as they are pre-built and tailored to specific requirements. Here are the necessary steps to build a cloud/ghost kitchen app:

Step 1: Choose a Reputable App Development Company

Begin by finding a ghost kitchen delivery app development company that can meet your needs. Once you identify the right developer or team of developers, propose a deal that outlines your requirements.

Step 2: Select the Right App from the Demos

App developers will provide several pre-constructed applications for you to review. After viewing product demonstrations, select the app that best aligns with your requirements.

Step 3: Implement Changes

After finalizing your application, you can recommend changes to make your app unique. The development company will offer a range of customization options, allowing you to individualize your app.

Step 4: Test Your Platform

Conduct test runs to identify and fix any minor issues before launching the app. The objective of these trials is to ensure a smooth and optimal user experience. The cloud kitchen app will be delivered only after it has passed these tests.

Step 5: Launch Your Cloud Kitchen Application

Once testing is complete, your app is ready to enter the market and become a competitive player in the online food delivery industry.

How much does an online Cloud Kitchen setup cost in India?

A variety of factors, like the complexity of the app’s functionality, the number of platforms it will be built for (such as iOS, Android, and the web), and the size and expertise of the development team, might affect the exact development cost and time of a cloud kitchen app development.

For one iOS or Android platform, developing a simple cloud kitchen platform in India might cost around ₹5-₹6 lakh. However, with additional features, equipment, and marketing expenses, this cost can easily reach up to ₹11 lakh or more.

However, creating more complicated apps may take longer and cost more money.

The quoted cost and time are industry averages based on research and observations. If you want to build a virtual restaurant yourself.

In that case, you can contact Arramton, where our experts will provide you with the cost and time frame required for your cloud kitchen app.

Launch Your Profitable Cloud Kitchen Platform with Arramton

As a leading software and app development company, Arramton Infotech will be of great help in all your necessary technological infrastructure and support that is essential for the success of your cloud kitchen platform.

When you invest your time and money in app development service providers like Arramton, you’ll realize that we’ve experience in building cloud kitchen apps and have the technical expertise to scale your brand.

Above we’ve tried to cover everything you need to know to develop a cloud kitchen platform. The only thing that is left now is to reach out to our development team and kick-start your project.

Frequently Asked Questions

Q. How much does it cost to set up a cloud kitchen?

Ans. The cost of setting up a cloud kitchen can vary depending on factors like location, size, and equipment. Costs can range from $10,000 to $50,000 or more for renovations, permits, and initial inventory.

Q. How to set up a cloud kitchen?

Ans. Setting up a cloud kitchen involves securing a commercial kitchen space, obtaining necessary licenses (FSSAI, etc.), equipping the kitchen for your menu, and choosing an online ordering system.

Q. How does Cloud Kitchen work?

Ans. Cloud kitchens are commercial kitchens without dine-in areas. Restaurants use them to prepare food solely for delivery or takeout orders. This allows them to focus on food prep and reduce overhead costs.

Q. Is cloud kitchen legal?

Ans. Yes, cloud kitchens are legal businesses. They require the same permits and health inspections as traditional restaurants.

Q. How much commission does Zomato take from Cloud Kitchen?

Ans. Zomato's commission for cloud kitchens likely varies depending on the specific agreement. However, delivery platforms typically charge restaurants a commission fee per order, often ranging from 20-30%.

Q. Why does Cloud Kitchen fail?

Ans. Cloud kitchen failures can stem from various reasons. Common culprits include high competition, low-profit margins after delivery fees, poor menu planning, and inadequate marketing to reach enough customers.

Q. Is Cloud Kitchen profitable?

Ans. Cloud kitchens can be profitable, but it depends on factors like operational efficiency, menu pricing, and delivery platform commissions.  They offer lower overhead costs, but competition is fierce, and success relies on strong marketing and efficient delivery service.