April 20, 2024

The Growing Cloud Kitchen Market is driven by the Growing on-demand Food Delivery Industry

The cloud kitchen market allows restaurants to prepare food without the costs associated with operating dine-in locations, instead focusing entirely on delivery and take-out orders placed through partnering delivery platforms and apps. Cloud kitchens allow restaurants to operate in a much more cost-efficient manner by eliminating the costs of maintaining a traditional restaurant space, from rent and real estate to employees dedicated to customer service. This enables restaurants to compete effectively in the on-demand food delivery market at much lower prices.

The global cloud kitchen market is estimated to be valued at US$ 100.46 Billion in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
The growth of dedicated delivery-only brands is a key trend seen in the cloud kitchen market. Recognizing the efficiencies of the cloud kitchen model, many food brands are launching delivery-only concepts that operate exclusively through shared kitchen facilities. These brands focus entirely on optimizing their menus and operations for the delivery model, bringing niche and innovative concepts to on-demand customers without the capital costs of bricks-and-mortar locations. Such dedicated delivery brands have driven significant demand for cloud kitchen facilities globally.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate as the cloud kitchen market requires significant investments in infrastructure setup and establishment of delivery tie-ups. However, the low entry barriers allow new entrants.

Bargaining power of buyers: The bargaining power of buyers is high due to the presence of many established cloud kitchen brands providing variety of food options. Buyers can switch between brands easily based on price, quality, delivery speed or offers.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as key ingredients and food supplies are available from numerous local vendors. However, brands can negotiate on pricing and supply contracts for consistent quality and supply.

Threat of new substitutes: The threat of substitutes is low as cloud kitchen offers convenience of delivery without dining-out ambience which traditional restaurants provide.

Competitive rivalry: The competitive rivalry is high due to presence of numerous local and international brands offering similar food cuisines and delivery services. Players compete on parameters like pricing, menu variety, delivery speed and better consumer experience.

Key Takeaways

The global cloud kitchen market is expected to witness high growth. With rising demand for quick service and online food delivery, cloud kitchens are becoming an efficient solution for restaurant businesses. The global cloud kitchen market is estimated to be valued at US$ 100.46 Billion in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030.

Regional analysis – The cloud kitchen market is dominated by Asia Pacific region owing to high smartphone and internet penetration in countries like India, Indonesia and Thailand. These countries have witnessed rapid growth of various aggregators and cloud kitchen brands in recent times.

Key players operating in the cloud kitchen market are Dahmakan, DoorDash, Ghost Kitchen Orlando, Keatz, Kitchen United, Kitopi Catering Services LLC, Rebel Foods, Starbucks Corporation, Swiggy, and Zuul. Players are expanding their geographical footprints through partnerships and collaborations to leverage the fast-growing online food delivery market.