What is a Cloud Kitchen? New F&B Business Trend in 2024

Cloud Kitchen is one of the most notable milestones in the current F&B industry. This business model has seen significant development during the COVID-19 era and has gradually become a trend in Vietnam. Let’s explore what Cloud Kitchen is and how it operates with Kamereo in the following article!

*Many businesses adopt the Cloud Kitchen model*

What is a Cloud Kitchen Model?

Cloud Kitchen, also known as a Virtual Kitchen, is a central kitchen model. It is a “virtual restaurant” model that operates based on collaboration with third parties or online food ordering services. The characteristic feature of Cloud Kitchens is that there is no space for dine-in customers, only enough space for kitchen facilities and other necessary equipment.

The Cloud Kitchen model provides flexibility for restaurants, freeing them from dependence on physical space, equipment, and maintenance costs. Instead, you can focus on ensuring product quality and management activities through third-party automated technology.

*Cloud Kitchen is a new type of restaurant business model*

How Cloud Kitchens Operate

To better understand Cloud Kitchens, you can learn about how this model operates for a more intuitive view.

Ordering and Delivery on the System

First, customers can place orders through the website, kitchen apps, or food ordering apps like GrabFood, ShopeeFood, GoFood, beFood, Loship, etc., via electronic menus. These orders are processed similarly to traditional restaurants but may carry a different brand.

Cloud Kitchens require a central data processing center to manage menus, process orders, deliver, integrate payment gateways through e-wallets or banks, etc. Additionally, the Point of Sale (POS) system is connected to the online ordering system to display orders for the kitchen through electronic screens.

Furthermore, you need a queuing system for delivery personnel to know when orders are ready. The delivery dispatch system operates according to principles such as following a route, first-come-first-served, or prioritizing those with higher scores, etc.

*Central kitchen model operates based on online ordering and delivery*

Virtual Kitchen Workforce

The central kitchen model helps save labor costs for restaurants by eliminating positions such as servers, cashiers, etc. However, this model requires a highly skilled chef to ensure food quality, which is the most important factor in the customer experience.

A good chef needs to be able to prepare food for various brands. Large-scale Cloud Kitchens will assign separate chefs for each brand. Additionally, you also need kitchen assistants and delivery staff to ensure smooth business operations.

*The chef is a crucial factor determining the success of a Virtual Kitchen*

Supplier Management and Food Inventory Management

Cloud Kitchens provide food to many different restaurants, so strict control of ingredient imports is necessary. Additionally, some special items may need to be sourced from multiple suppliers, increasing input costs. Therefore, choosing suppliers and managing ingredient quality are crucial when operating a central kitchen model.

Furthermore, managing inventory of raw materials is one of the most complex tasks in operating a Cloud Kitchen. However, specialized inventory management software for the F&B industry nowadays has powerful features to support this work.

Typically, central kitchens will categorize goods by ingredient groups rather than by name. This helps managers predict the monthly demand for ingredients based on past data, thereby calculating the overall quantity of ingredients for the entire restaurant.

If you are unsure about a supplier with a diverse range of products, consider Kamereo’s services. We provide many product categories from fresh fruits and vegetables to specialized kitchen utensils. Moreover, Kamereo also offers many attractive promotions and discounts for regular customers.

*A central kitchen requires a reputable ingredient supplier with a diverse range of products*

Appropriate Marketing Strategies for Central Kitchens

With a completely online nature, the success of Cloud Kitchens depends on building a strong presence on the online platforms that customers use.

On Internet Platforms

Building a professional website with engaging content and leveraging the power of social networks such as Facebook, Instagram, X, etc., helps Virtual Kitchens attract customer attention. Additionally, continuous interaction with customers helps understand their desires and needs, thereby planning adjustments and improving services better.

Collaboration with Third Parties

With the strong development of food ordering apps, appearing on these platforms becomes an important step for central kitchens. From there, it boosts the number of orders, reduces delivery costs, and expands the customer base. However, restaurants need to consider not relying too much on third parties to avoid cost inflation and customer sharing with competitors.

*Combining with food delivery apps is a popular choice for central kitchens*

Collaborating with other Restaurants

Additionally, Cloud Kitchens can also collaborate with well-known restaurants that do not directly compete and offer complementary dishes such as rice – dessert, rice paper – sweet soup, etc., to attract customers. This helps increase promotional effectiveness and expand potential customer base.

Furthermore, collaborating with restaurants in the same system is also a feasible option to create special deals for customers.

Advantages and Disadvantages of the Central Kitchen Model

Cloud Kitchens have their own advantages and disadvantages. Therefore, you need to carefully consider these factors before investing in this model.

Advantages

Quickly and fully meet consumer needs at reasonable prices.
Investment becomes much easier compared to traditional models due to lower initial investment including reducing rental costs, labor costs, and investment in infrastructure.
Simple business model, even for housewives.
Able to handle multiple orders simultaneously while still ensuring quality and speed of food processing thanks to technology support from third parties.

*The central kitchen model is relatively simple and easy to implement*

Disadvantages

Alongside the advantages, the central kitchen model also faces certain disadvantages such as:

Difficult to build long-term brand recognition.
Competition on apps is quite fierce, especially regarding prices.
Facing many “hidden costs” such as fees for third parties, delivery fees, electricity and water bills, promotional costs, and discounts to achieve minimum order quantities as required.
Difficulties in interacting and receiving feedback from customers about food.
Cloud Kitchen models are easy to replicate, facing many technical and managerial barriers.
The use of packaging such as cups, plastic boxes, plastic containers, etc., puts pressure on environmental pollution. However, using environmentally friendly packaging can increase production costs and reduce competitiveness.

Potential of Cloud Kitchens in Vietnam

GrabKitchen

Grab was the first platform to introduce the central kitchen model to Vietnam through GrabKitchen at the end of 2019. Currently, this system is rapidly developing and has four bases in Thu Duc, Binh Thanh, Binh Chanh, and Tan Binh.

The GrabKitchen model operates as a combination of kitchens focusing on “top-notch” restaurants with high order volumes, popular on the GrabFood platform. Accordingly, all food from participating restaurants is displayed on a single menu, making it easy for customers to choose, while combining savory and sweet dishes in the same order.

Especially, all restaurants participating in GrabKitchen must have separate food safety licenses for the cooking area. This ensures the quality of each base unit.

To optimize operations, Grab not only supports locations but also invests in installing free POS machines for restaurants operating at GrabKitchen. By understanding customer behavior, Grab has gathered dozens of F&B brands including Banh Mi Pewpew, Ga Nuong O O O, Say Coffee, Com Van Phong Rio, Banh Mi Que Phap BMQ, Ga Bo Xoi Yummy, Chao Suon Chu Chen, Banh Canh Cua 91, Dua Sap Travico, etc., to participate in the model.

*GrabKitchen is the first large-scale unit to apply the central kitchen in Vietnam*

Cloud Cook

Cloud Cook is a Cloud Kitchen brand sponsored by Cloud Kitchen Food Home company in the fourth season of Shark Tank. This startup has attracted investment from Shark Binh and Shark Lien with a total investment of up to 6 billion VND for a 40% stake to “bring a large quantity to Vietnam’s F&B industry”.

One advantage of Cloud Cook over other central kitchens is not being bound by exclusivity or limited to being sold on a single app. Accordingly, business owners can set up kitchens and sell through multiple apps with only tens of millions of VND in capital.

*Cloud Cook with the support of Shark Binh and Shark Lien in Shark Tank season 4*

Conclusion

Cloud Cook not only brings convenience to customers but also solves operational issues for F&B businesses in the digital age. However, when deciding to join this model, careful evaluation is needed to achieve the best results. Follow the FoodTech section to stay ahead of the culinary trends in the digital age.