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Emerging Cloud Kitchen market in Saudi Arabia/UAE

  • Published on : 26/04/2021

An emerging and lucrative business concept, Cloud kitchens has been the buzzword in the restaurant industry lately. Also known as dark kitchens, ghost kitchens, home-delivery & takeaway-only restaurants, these restaurants have caused a massive uproar in the market and opened new gateways for revenue.

Emerging Cloud Kitchen market in Saudi Arabia/UAE

A popular concept, the takeaway is already a thriving business in South Asian regions like India and Singapore. In the past few years, it has snowballed into the home-delivery market and fueled its growth even further. The massive growth of this has caught the attention of international restaurateurs in Saudi Arabia.

In the next few years, the home delivery market in the UAE is expected to boom and incur an annual revenue of $20 Billion. The advent and rise in technology adoption by the common UAE population will be the driving force here. 

And to keep pace with the rising demand, many restaurant businesses have already set up alternate cloud kitchens. For example, KLC Virtual Restaurants, managed by Mubarak Jaffar, CEO, and co-founder, right now operates more than 40 virtual restaurants developed in-house across a variety of different cuisines from 15 cloud kitchens in Kuwait.

Also Read: Why Virtual kitchens are a best fit for your restaurant business in 2021

Advantages of the cloud kitchen concept

Minimal cost, standard overheads, and reduced business risks coupled with the ever-growing demand for home-delivered food has raised cloud kitchens to the ranks of most preferred restaurant formats. Let’s learn how exactly these reasons make cloud kitchen a top pick in current times.

1. Minimal Infrastructure

When opening up a new restaurant, two things occupied their place in the priority list, i.e., the cuisine to be served and the theme & decor of the restaurant. But the sky-high rental costs in UAE make it even an expensive affair.

 But that changes with the cloud kitchen concept as there is no need for a dining area, what one needs is a fully functional kitchen.

2. Flexibility 

Building up a restaurant concept, deciding a theme, curating a set menu, and even decor is an extravagant affair that even drills a hole in the pocket. But soon another fad comes in and people jump the wagon. But with a cloud kitchen, it’s easy to whip up a new menu that is trending, create a virtual brand, and cash in on the rising demand. All of this without any overhead cost.

3.  Quicker Service

A delivery/takeaway-only business means you don’t need servers or staff who will wait around customers anymore. This ultimately means you can use the same resources in your kitchen space and optimize your food preparation process. This will translate to shorter prep time and quicker deliveries. 

And for a growing population that has very little patience to wait around, their favourite food delivered under 30 mins is a dream come true!

Also read: Top trends in the F&B industry of Saudi Arabia

4. Economical Cost for Two

Reducing overhead costs means the overall investment on day-to-day comes down drastically. This allows the restaurant to give out more offers to attract more customers and keep the cost for two at an economic level. This also helps cloud kitchens in the UAE increase profit margins.

The decreased cost can help the restaurants invest more in innovative & durable packaging that makes sure the delivery service is impeccable. And there is an added advantage of your food making it to your customers’ Instagram where it can get free publicity; A win-win situation!

5. Ease of Ordering

Technology and its deep penetration in everyone’s lives have made it easy for the common man to place an order at the click of a button. And the multitude of options via which one can place orders makes it even easier. So there is no question about if there is business, cause the #foodgasm on Instagram is proof of your customers’ hunger.

As per statistics, in the cosmopolitan cities of UAE, about 60-70% of people prefer placing orders online. And various platforms like 3rd party aggregators, a restaurant’s own online ordering platform,  WhatsApp for Business, Facebook, and Instagram order widget make getting orders an effortless affair. 

The role of the pandemic has been instrumental in accelerating and pushing us ten years ahead with respect to digital technology adoption. One cannot deny that technology has altered the way we live, learn and operate at the moment. With the adoption of restaurant technology and e-commerce at the forefront, customers have gained the confidence to order from the comfort of their homes. Online food ordering was unequivocal, the natural step out. And the only way to make that profitable is by removing the middlemen and building a direct & transparent relationship with the customers.

And in the UAE F&B sector, the Cloud Kitchen concept is set to catapult. Few examples of this could be various cloud kitchens and virtual brands coming up that are operating from the same industrial kitchen but catering to various kinds of cuisines and customer types. To make things more interesting even modern innovations like drone drop-offs, robotics, etc., are infiltrating the food delivery sector.

Also Read: Technology trends to rule the restaurant market in 2021.

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