Ask anyone a few years ago what they thought a cloud kitchen was, and you may well have been met with a blank stare. But now, they are not only growing in popularity, but the UAE seems to be blazing a trail in the concept. And the global market value of cloud kitchens is expected to grow to US$71 billion by 2027.
In case you’re one of those with a blank stare, a cloud kitchen is a commercial cooking facility purpose-built to produce food specifically for delivery.
These ‘commissary’ kitchens are sometimes also known as ghost kitchens, shared kitchens, or virtual kitchens with the delivery-only food brands operating within them called virtual restaurants.
The pandemic has seen an incredible influx of tech solutions for the ailing food and beverage sector, making it tough even for die-hard tech-fans working in the sector to keep up.
We saw savvy business owners quickly join food delivery apps or create their own apps. They started selling home delivery boxes of prep-at-home meals, kits and even cookery classes. If you weren’t digitally-savvy before the pandemic, you will be now.
And yet, as the food and beverage sector has had to pivot to more of a digital model of business, it’s also become apparent that maybe the old kitchen model doesn’t work so well.
There are clear cost advantages to working out of a shared kitchen environment, and while more and more of us order food for delivery, why pay out millions for a beautiful dining venue if that’s no longer what people want?
I, for one, will always enjoy dining out, but for smaller, community-based outlets like cafes and sandwich bars, the cloud kitchen concept is a winner.
It was a few years ago now, but I still recall watching a short video from UBS regarding the delivery sector.
In it, they predict the global online food ordering sector will be worth some $365bn by 2030 – but the report was released before the dramatic effects of the pandemic.
The upcoming Dubai Expo will mean a flurry of global visitors, who will need food and will surely take advantage of the cloud kitchen scene in Dubai – many without even realising.
Moving to a delivery-only model has been made possible recently by advances in technology and changes in consumer habits. It offers certain advantages over offering delivery from a traditional brick-and-mortar restaurant.
Cloud kitchens are a result of the convergence of the on-demand and sharing economies. Food preparation costs are lowered, delivery time and costs are reduced, and overheads like rent and utilities are greatly decreased.
And the UAE – with its multicultural, sophisticated population – is keen to take full advantage of the rising popularity of the concept.
According to the UBS report, millennials are three times more likely to order in food than their parents.
Yet, the thing that perhaps fascinates me most is how tech has driven this move to giant, shared kitchens, as a way to cut costs to the bone while delivering exactly what people want, when they want, fast.
Cloud kitchens are uniquely tech-enabled. They take advantage of the now ubiquitous food delivery apps on your smartphone, such as UberEats, Zomato and Talabat.
In doing so, they use large amounts of data to determine what types of foods to produce for specific neighbourhoods and when the demand is likely to be greatest. For example, hot wings might be really popular between 11pm-2am near college campuses. This data is fuelling rapid adaptation and optimization, almost in real-time.
And as you know, if you read my blogs often, I often like to predict how things might go in future.