A cloud kitchen business model is a F&B business model that allows established restaurant operators the flexibility to experiment with new concepts and themes in their menu, without much investment, and with reduced risks. A restaurant can open a new brand from the same kitchen using their existing resources. This is, in essence, a Virtual Restaurant Brand. 

Cloud kitchens also known as “dark kitchens” or “virtual kitchens”. Such kitchens send food directly to customers via delivery apps, overcoming two common challenges faced by conventional F&B businesses: high shop front rental costs and manpower crunch for service staff. The business model also rides on an increasing demand for food delivery since the “circuit breaker” period from April to May, during which dining-out was not allowed and more people worked from home.

Cloud or virtual kitchen allows F&B businesses to make more sense of their current rentals by launching new brands within the same infrastructure. For running a standalone cloud kitchen, you would still need to rent a space, hire the staff, and spend on equipment and utilities.

In the case of virtual kitchens, however, you can experiment with multiple concepts, and the incremental revenue coming from the new brands is only going to contribute further to your existing business. 

​Virtual F&B businesses only exist online – either on the food aggregator apps or on their own food ordering website or mobile app. On the face of it, they have nothing to do with the restaurant housing the brand, but they use the same kitchen or have a separate area in the main kitchen. They may have different chefs or the same chefs cooking for the virtual brand in the off-peak hours of the restaurant.

With the growing demand for food delivery, cloud kitchens are being dubbed as the next big thing to happen to the FnB industry. Food is undergoing a retail revolution, and disruption is already happening in the way food is prepared, delivered, and consumed.

​Consumer data is pointing towards a massive shift in the way people are eating from restaurants. Customers are becoming increasingly brand agnostic, giving space to the idea of new brands and innovation in operations. 

On the same note, restaurant operators worldwide are adapting to cater to the growing demand for food delivery by remodeling and deconstructing traditional operations. Existing restaurants are turning into cloud kitchens and launching virtual restaurant brands from the same kitchen.

​The COVID-19 pandemic and the subsequent lockdowns across the globe have further added to the demand for online food delivery. 

The F&B industry has been one of the Cloud Kitchens? worst-hit, owing to the complete lockdowns implemented by most nations. During these testing times, food delivery has still continued, with most of the restaurants switching to the delivery-only model, turning themselves into potential cloud kitchens.

As the lockdowns are being lifted in a staggered fashion and restaurants are reopening, while keeping the social distancing norms in mind, the footfall remains significantly lower. People are wary of going out in crowded places and are preferring to order from their homes instead. 

This COVID-19 induced demand for food delivery is further leading to the emergence of cloud kitchens as the most preferred format for restaurant operators as well as customers. Once the pandemic is over, the demand for food delivery will be unaffected as people will be more used to the idea of food delivery and habituated to ordering-in.

​While the cloud kitchen trend was becoming increasingly popular in pre-Covid times, its relevance has increased manifold during the pandemic. It's also the best way to keep the business afloat while maintaining the social-distancing guidelines.