Cloud Kitchen Market

According to Stratistics MRC, the Global Cloud Kitchen Market is accounted for $65.44 billion in 2023 and is expected to reach $161.76 billion by 2030 growing at a CAGR of 13.8% during the forecast period. Cloud kitchens, also known as virtual or ghost kitchens, are much less expensive to operate than traditional kitchens in dine-in restaurants because they do not need dine-in facilities or take into account costs related to property and location. In comparison to dine-in restaurants, cloud kitchens also have higher profit margins. Moreover, the ability to operate ghost kitchens from any location, including parking lots, warehouses, and basements, is another important aspect that contributes to the popularity of cloud kitchens.

According to the Goods and Service Tax (GST) council’s circular, cloud kitchens provide the same services as restaurants and hence fall under the definition of a ‘restaurant’.



Market Dynamics:

Driver:

Expansion of online food delivery services

The rise of online food delivery services has changed how people access and consume food. These platforms provide a straightforward user interface, quick order processing, and extensive marketing reach. With just a few taps on a smartphone, consumers can easily order food, which has increased demand for food delivery and fueled the expansion of cloud kitchens. Additionally, without having to have physical dining areas, restaurants and business owners can collaborate with these platforms to reach a larger customer base.

Restraint:

Utilization of third-party platforms

Cloud kitchens can become overly dependent on third-party delivery platforms, despite the fact that they provide a large customer base and practical ordering options. Moreover, due to the potential reduction in profit margins caused by the fees associated with these partnerships, it is crucial for cloud kitchen operators to think about diversifying their distribution channels and increasing their direct clientele.

Opportunity:

Innovative food concepts and niche markets

Cloud kitchens give chefs and business owners a place to test out novel and specialized food ideas that might not work in conventional dining establishments. Cloud kitchens can attract a loyal customer base in search of authentic and avant-garde culinary experiences by catering to niche markets and emerging food trends. Additionally, cloud kitchens encourage culinary experimentation, fostering specialized cuisines and innovative dishes that appeal to intrepid diners looking for extraordinary gastronomic experiences.

Threat:

Supply chain breakdowns

A smooth supply chain is essential to the consistent sourcing of ingredients in cloud kitchens. Menu restrictions and inconsistent customer experiences may result from disruptions like ingredient shortages or transportation issues. The supply chain, which is essential to cloud kitchens, guarantees consistent ingredient sourcing. Moreover, disruptions, like shortages or logistical difficulties, can reduce the variety of the menu and degrade the quality of the food.

Covid-19 Impact:

Lockdowns and safety concerns sparked a surge in demand for contactless food delivery during the COVID-19 pandemic, fundamentally altering the cloud kitchen market. A solution that provides secure and practical dining options is the emergence of cloud kitchens. Furthermore, operators had to adjust to the shift's increased orders and put safety measures in place. The online presences and menus of prosperous cloud kitchens have changed. The pattern persisted as vaccines were introduced, establishing cloud kitchens' position in the food industry. Their expansion was accelerated by the pandemic, which had a long-lasting impact on dining habits and helped shape their long-term plans.

The franchise segment is expected to be the largest during the forecast period

During the forecast period, the franchised segment is anticipated to have the highest revenue share. Operators are being encouraged to invest in well-known brands by the consumer's preference for ethnic foods and customized foods. Moreover, the franchisor also offers training and support, including marketing and staff training, supplies, and equipment, so opening such restaurants entails fewer risks. As a result, advantages like the low risk of starting a cloud kitchen and receiving a sizable profit share are anticipated to fuel the segment's growth.

The commissary/shared kitchen segment is expected to have the highest CAGR during the forecast period

Over the forecast period, the commissary/shared kitchen segment is anticipated to have the highest CAGR. Commissary kitchens are becoming more common due to the shared kitchen concept's growing appeal among restaurateurs and its many advantages. As an additional revenue stream, restaurants are increasingly renting out their kitchen areas to various food service providers. Moreover, the segment is also anticipated to grow as more food trucks and caterers start using the storage space and open time slots provided by restaurant facilities.

Region with largest share:

Due to its strong technology adoption, substantial urbanization, and shifting consumer preferences, the Asia-Pacific region has emerged as a market leader in the cloud kitchen space, holding the largest share during the forecast period. The demand for convenient and varied dining options has increased as a result of rapid urbanization and the rise of the middle class, fueling the development of cloud kitchens. Countries like China, India, and Southeast Asian countries are leading the way in the development of cloud kitchen services because of their massive population centers and technologically savvy populations. Moreover, the region's leadership is further supported by its openness to adopting digital ordering and delivery platforms, providing a favorable environment for cloud kitchen operators to thrive and reshape the culinary landscape.

Region with highest CAGR:

During the anticipated period, the cloud kitchen market will grow at the highest CAGR in the Middle East and Africa region. This expansion is explained by factors such as growing middle-class populations, rising smartphone penetration, and a shift in consumer preferences toward contactless and convenient dining experiences. Cloud kitchens have found fertile ground for rapid expansion as the area embraces digital technology and online food delivery, offering a wide range of culinary options to a diverse and dynamic customer base. However, the Middle East and Africa region is experiencing the highest expansion in the cloud kitchen industry due to a confluence of favorable demographics and a developing digital ecosystem.



Key players in the market

Some of the key players in Cloud Kitchen market include Zomato, Kitchen United, Farm To Fork Sdn. Bhd., Kitopi, Starbucks Coffee Company, Dahmakan, ParTech Inc, Wingstop Inc., All Day Technologies Inc., Toast Inc., Swiggy, Zuul Kitchens, Inc, Food Haven Technologies Inc., Rebel Foods Pvt. Ltd., CloudKitchens, DoorDash Kitchen, Kouzina Food Tech Pvt Ltd., Ghost Kitchen Orlando, The Kroger Co and Uber Technologies Inc.

Key Developments:

In July 2023, Swiggy has acquired Lynk Logistics by buying a stake from Ramco Group. Lynk will continue to operate as an independent business post the acquisition led by co-founder and CEO Shekhar Bhende. With this acquisition, Swiggy enters India’s food and grocery retail market.

In June 2023, Toast, a digital technology platform catering to restaurants, has announced an exciting agreement with Marriott International. This agreement will allow Toast for Hotel Restaurants technology to be accessible to food and beverage outlets within Marriott’s Select service hotels located in the United States and Canada.

In October 2022, Starbucks announced it plans to sell the Seattle’s Best Coffee brand to Nestlé, with which the company established the Global Coffee Alliance in 2018. This transaction will further strengthen the Global Coffee Alliance by allowing both companies to focus on their core strengths.

Product Types Covered:
• Burger/Sandwich
• Pizza
• Pasta
• Chicken
• Seafood
• Mexican/Asian Food
• Other Product Types

Types Covered:
• Independent Cloud Kitchen
• Commissary/Shared Kitchen
• Kitchen Pods
• Other Types

Natures Covered:
• Franchised
• Standalone
• Other Natures

Deployment Types Covered:
• Web
• Mobile
• Other Deployment Types

Solutions Covered:
• Order Management
• Brand Management
• Inventory Management
• Customer Experience Management
• Marketing Management
• Reporting & Analytics
• Other Solutions

Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan
o China
o India
o Australia
o New Zealand
o South Korea
o Rest of Asia Pacific
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2021, 2022, 2023, 2026, and 2030
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements

Free Customization Offerings:
All the customers of this report will be entitled to receive one of the following free customization options:
• Company Profiling
o Comprehensive profiling of additional market players (up to 3)
o SWOT Analysis of key players (up to 3)
• Regional Segmentation
o Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances