Cloud Kitchens: The Next Evolution of Online Ordering and Delivery

As our industry continues to evolve, restauranteurs are re-thinking, re-modeling, and re-evaluating their revenue streams. One trend growing in popularity is the concept of cloud kitchens, which can afford restauranteurs unprecedented flexibility.

Cloud kitchens enable restaurants to maintain and expand their customer base at relatively minimal cost, providing the opportunity for growth and creativity. With no storefront to maintain, no front-of-house staff to pay, and no décor to worry about, restauranteurs can focus on creating delicious food that customers want to have delivered again and again.

In today’s climate where, for many, delivery is the only option, cloud kitchens can provide a transition to full delivery without sacrificing food quality and excellent customer service. Whether you run a single storefront or several chain locations, cloud kitchens are an affordable way to manage costs and streamline your online delivery. Here’s a look at the different ways your business can incorporate a cloud kitchen into your business model.

What is a cloud kitchen?

The term cloud kitchen, also known as dark kitchens, ghost kitchens, and virtual kitchens, is not new in concept. Cloud kitchens are commercial grade food preparation facilities that prepare food for delivery only. These locations don’t have a dining area for patrons and are often located in large warehouses or office parks where space is plentiful.

How does a cloud kitchen work?

Cloud kitchens are centralized locations equipped to handle commercial food production. These locations can fit dozens of businesses at once and are equipped with state-of-the-art restaurant tech and everything you would find in a commercial grade kitchen.

Business owners can then rent out space in the cloud kitchen facility to use as an off-site food prep location for their restaurant. Think of a cloud kitchen like a food court or dining hall where dozens of different restaurants all run their business out of the same location. The only difference is these meals are prepared for delivery-only orders.

Because there is no patronage or foot traffic, cloud kitchens are a smart solution for businesses looking to maintain safety regulations during COVID-19. Any restaurant that plans to use online delivery as their main source of revenue should seriously consider investing in a cloud kitchen.

What are the advantages of a cloud kitchen?

Cloud kitchens provide flexibility that traditional brick-and-mortar locations do not. Here’s a look at three key advantages cloud kitchens provide that restaurant owners can leverage.

Lower overhead costs

One of the most significant advantages of dark kitchens is cost reduction. The high overhead costs of opening a storefront can be cost-prohibitive for many restauranteurs. Cloud kitchens allow business owners to save money on rent by moving out of high-cost urban settings and into industrial areas with lower rent.

There is no need for expensive decorations or lighting as no customers will ever see the dark kitchen. This reduced cost model allows restauranteurs to invest in other aspects of their business to accelerate growth and profit. The restauranteur can invest in reaching areas and customers that they had not previously served.

Improved flexibility in restaurant operations

Cloud kitchens allow for the expansion of the business without incurring the cost of all the trimmings required in a customer-facing restaurant. Many restaurants use cloud kitchens to trial new concepts or dishes on special delivery-only menus, expanding their menu offerings, as well as expanding their opening times and locations.

Access to latest restaurant technology

Another benefit of a cloud kitchen is the restaurant technology they’re often equipped with. Cloud kitchens use a variety of products to streamline delivery orders, maintain inventory management, and run all point-of-sale transactions from a single location.

READ MORE: Interested in learning more about how to set up a cloud kitchen? Download our Essential Guide to Cloud Kitchens today.

What technology is needed to start up a cloud kitchen?

Technology plays a crucial role in cloud kitchens; all orders come from online channels such as websites, mobile apps, or third-party delivery providers. A cloud kitchen requires an integrated technology system for accepting online orders, processing payments and efficient kitchen management.

Point-of-Sale (POS) software

An essential requirement for a cloud kitchen is a point-of-sale (POS) system that accepts orders from multiple channels such as third-party delivery apps and online ordering systems. Having a POS system that can integrate with third-party solutions can increase a restaurant’s efficiency since orders no longer have to be manually entered. This saves time and reduces errors leading to a reduction in labour costs.

Inventory management software

Managing inventory is vital to cutting down on food costs, reducing food waste, and maximizing profitability. By incorporating a smart inventory management system, you can easily track daily stock consumption and order inventory with greater precision.

Kitchen management software

An integrated kitchen display system (KDS) is critical to optimise kitchen workflow and increase efficiency, food quality, and speed of service. Once an order is received, the KDS is instantly updated, enabling kitchen staff to view order details, prioritize preparation tasks, and receive alerts about ticket times that have exceeded restaurant standards.

Delivery Apps

Connecting to delivery apps such as Uber Eats, DoorDash, and Deliveroo plays an essential role in dark kitchens. To quickly and seamlessly connect your POS system to delivery apps, you must have an open-integration POS platform. This technology allows businesses to adapt to the ever-changing needs and trends of their customers.

Loyalty System

Implementing a restaurant loyalty program is a great way to increase repeat business, strengthen brand awareness, and keep customers engaged. Retaining customers has proven to be more valuable and cost-efficient than consistently trying to recruit new diners. Through a loyalty solution, you can deliver targeted offers to customers, manage rewards, and offer guests self-service tools to review their rewards activity.

Cloud kitchens allow flexibility and diversification. They enable businesses to reduce their highest costs (labor) while providing room for growth and expansion. As the industry continues to evolve, dark kitchens offer stability and have proven reliable for restaurants looking to grow.

Looking forward with Oracle

Interested in learning more? Check out our complete guide to cloud kitchen technology or speak with one of our product experts. We would love to hear from you.

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