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A Guide to Start a Cloud Kitchen in India in 2022 - Part 1

Cloud technology, a word familiar with IT professionals, has made its way into the daily lives of people. How you may ask? Every time you place an order from online food ordering applications such as Swiggy and Zomato, there’s a chance that your meal has been delivered from a cloud kitchen. A meticulous and timely system powered by technology takes care of making sure that your food arrives on time. Right from softwares managing inventory and costing to having a POS system, cloud kitchens are a step ahead in the quick production of food.


A cloud kitchen is primarily a restaurant kitchen that accepts incoming orders only through online ordering systems without offering any dine-in facility. The pandemic promoted a significant shift in the restaurant industry. As the world shut down, eateries could not serve customers in their dining rooms, prompting people to order take-out and delivery meals. A report by the National Restaurants Association of India said the restaurant industry shrank 53 per cent in the fiscal year 2020-21. In such hard times, cloud kitchens found several takers.


In this article, we’ll be covering everything you need to know about starting your very own cloud kitchen.


1. Deciding on a Location

The primary reason behind the low investment needed to open a cloud kitchen is the real estate cost. In a cloud kitchen model, location doesn’t have to cater to footfalls, parking space, and high-end sites. However, it does have a lot to do with proper sanitation, water supply, low rentals, and should be chosen based on the customer demography and the type of food product that you are selling.



A commercial cloud kitchen.


2. Implementing Online Food Ordering

Now that you have decided on the location, you need to decide on the type of technology to be deployed in order to accept orders. You can either setup your own online store i.e a website through which you can accept orders and subsequently deliver them with your own manpower or choose to partner with food delivery companies such as Swiggy and Zomato that accept and deliver orders on your behalf and charge somewhere around 18 to 30% on your revenue per order along with a one-time integration fee.



An online food ordering app (for representational purpose only)


3. Acquiring Licences

One of the most important aspects while setting up your cloud kitchen is to get clearances from the respective government authorities and others via licences such as FSSAI, GST Registration, Municipal Health/Trade Licence, Shop and Establishment Licence, Fire Safety Licence and Certificate of Environment Clearance Licence.



Licence


4. Employing Staff

The secret sauce behind a successful restaurant is the team that works for it, as they not only prepare the food but also help in maintaining consistency in taste. In a cloud kitchen, a minimum of five employees is required which includes two chefs, two helpers, and one housekeeper. Apart from the kitchen staff, two employees at the delivery and one at the counter for receiving online and telephonic orders are required.



Restaurant Staff


With the wave of technology hitting the restaurant industry, the cloud kitchen trend is here to stay, and would only evolve multiple folds from here. In terms of the gross merchandise value (GMV), the Indian cloud kitchen market is expected to become a $3 billion industry by 2024, up from about $400 million in 2019, according to RedSeer Consulting. While cloud kitchen formats are indeed one of the most profitable restaurant formats, with minimum risks involved, you still need to stay on your toes to make it a success.


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