Does the term “dark kitchen” intrigue you? What about a “ghost kitchen?”
With the food delivery culture on the rise, restaurants have played into it and come up with modern and innovative ways to live up to the current trends. Enter the Covid-19 pandemic – which taught us to go beyond our limits and think outside the box to remain in the workforce. Forbidden dine-ins and strict lockdowns drove many eateries out of business, many of whom then adapted to permissible alternatives.
Dark kitchens are not a product of the pandemic; they have long existed. However, during this period, their prominence shot up like never before. When the delivery-only climate had us all homebound, these kitchens sated our cravings and saved the day for us. So, let’s cut to the chase and talk about what we are here for – dark kitchens and what they are. Read on!
What Is a Dark Kitchen?
A dark kitchen is a commercial kitchen with no dining area or sitting space, as here, food is produced to sell exclusively through delivery. In such a setting, orders are received via third-party food ordering apps or the outlet’s delivery app. Such kitchens have many names, like ghost kitchen, cloud kitchen, virtual kitchen, etc. After receiving an order, they allocate it to a delivery partner who delivers it to the customer.
While most dark kitchens are delivery-only, some may allow customers to collect orders from the outlet as takeout. A dark or ghost kitchen emphasizes the digital customer experience, food quality, and packaging more than fancy indoors or ambiance, unlike traditional restaurants.
Benefits of Dark Kitchens
The benefits of a dark, cloud, or ghost kitchen are many. Let’s find out:
Low Operational Costs
Unlike traditional restaurants, a virtual kitchen does not have to splurge money on a fancy sitting area or serving staff which greatly reduces operational costs. Even its setup cost is significantly low as it does not rent a big space that a restaurant needs. A low-maintenance food preparation area with the right equipment is all you need for a cloud kitchen.
Prioritized Food Quality
Since a cloud kitchen focuses more on food preparation and delivery than the service, there is higher quality assurance. A restaurant has several factors to be mindful of, like the quality of service, aesthetic of the dining or waiting area, etc., due to which sometimes the food quality may get compromised. This is not the case with a delivery-only kitchen where there is a higher food quality assurance.
Higher Profitability
Since dark kitchens’ overhead and setup costs are significantly low, the profitability increases. With lesser aspects demanding expenditure in comparison to a traditional restaurant, the revenue has increased inlets for profits.
Greater Flexibility
Dark kitchens are highly flexible as they have the logistics and data to determine what is working for them. They can introduce new brand ideas, test their success against the numbers, and accordingly pull them down or rev up. They can also find out what’s hot in the market and incorporate it into their business model or also start up a high-performing brand side-by-side. The possibilities are endless!
Futureproof
AI, automation, and related technology are the future, and the dark kitchen business model is all about them. All transactions, from receiving an order to delivering it, are computer-enabled. Thus, it is safe to say that cloud kitchens are future-ready by being already armed with good technology.
Business Models of Dark Kitchens
Now that we have covered the basics of cloud kitchens, let us take it a step forward and learn about the five variations of the dark kitchen business model, which are more or less similar in their functions with few key differences. Let us understand them:
The “Traditional” Dark Kitchen
In this business model, one brand owns a single dark kitchen and specializes in a specific cuisine, solely relying on a delivery app.
Takeaway Dark Kitchen
This business model is the same as the traditional dark kitchen with the addition of the facility allowing customers to wait and collect their food orders.
Multi-Brand Dark Kitchen
As the name suggests, this business model includes a dark kitchen producing food under multiple brands, providing customers with several options and keeping operational costs low.
Aggregator-Owned Dark Kitchen
In this business model, food delivery app aggregator channels set up empty spaces as dark kitchens to offer them to businesses for renting out, thereby earning profits.
Outsourced Dark Kitchen
This latest dark kitchen business model involves outsourcing several cooking processes before applying the final finishing touches themselves.
Future of Dark Kitchens
The dark kitchen business model is an attractive choice for investors and potential restauranteurs owing to its low operational costs and higher profit margins. A report by RedSeer Management Consulting reveals that cloud kitchens are set to be a $2 billion industry in India by 2024, up from $400 million in 2019. Additionally, the market value of cloud kitchens is estimated to reach $1.05 billion by the end of 2023.
Virtual kitchens are continuously evolving. As we are headed towards increased digitalization, people, specifically the youth, prioritize a low-risk business model that promises lucrative returns and is adaptive to the fast-paced and ever-changing nature of the modern-day world. To this end, what could be more befitting than the greatly flexible and technology-rapt virtual kitchens?
Final Words
A dark kitchen can be a wise way to start your business. With a low setup and overhead costs, you can strengthen your revenue model enough to base the expansion of your business into a full-fledged restaurant. Even if you are not planning to expand, you can make a dark kitchen incorporating various high-performing brands to propel your turnover.
This article touched upon the essential aspects of a dark kitchen. We hope we have covered your queries and concerns. If not, feel free to write to us; we would be delighted to reach out to you.
