Why Is This The Right Time to Invest in the UAE Cloud Kitchen Market

decoding the cloud kitchen business growth in the UAE

Cloud kitchens or Delivery-Only kitchens are becoming more prevalent with the advancement of technology. With the growing interest of restaurant owners, inventors, and entrepreneurs in the cloud kitchen industry, there have been multiple fundraising events by cloud kitchens around the globe. Dubai based F&B brand Kitopi on February 2, 2020, announced that it had secured funding worth $60 million for expanding operations in the food delivery space. Let’s explore the cloud kitchen business environment in the UAE.

What Is The Delivery Only Kitchen Model 

A delivery kitchen is a restaurant without a dine-in facility. The business model entirely depends on third-party integrations for home delivery of orders placed through a website or app. Such a business model gives a restaurant the flexibility to tap up to 3x more revenue than a brick and mortar restaurant. Having said that, it should not be looked at as a cheaper alternative to a restaurant. 

A cloud kitchen venture will only be successful if you already know how to run a restaurant. The reason why restaurateurs prefer to start a new cloud kitchen business is because of the lower operating and set-up costs with marginally higher revenue

Tapping The Cloud Kitchen Industry In the UAE

Several cloud kitchens have started to explore the untapped potential of the food delivery market in the Middle East. Food To Go, a Dubai-based cloud kitchen concept, announced that it had secured its first round of funding from YAS Investment. 

“With the UAE expanding its urban spaces, restaurant owners are under tremendous pressure to grow their distribution network and are effectively unable to do so without incurring high set-up costs. Our service ultimately relieves the bulk of the stress of managing restaurants and empowers business owners to focus on refining their offering and brand presence while scaling demand for their products,” explained Wael Khechen, co-founder, Food to Go.

Other than Food To Go, several other cloud kitchens seem immune to the current coronavirus pandemic. In fact, they seem to be in the red-hot category in the digital world. Since the current scenario has forced people to stay within their homes, it has become beneficial for food delivery businesses. With residents likely to avoid visiting crowded destinations, the growth of cloud kitchens is inevitable in this hour.

“Industrial kitchens are the hottest thing right now- more so with the new restrictions (on) dining at restaurants,” says Manohar Lahori of Palmon Group. 

One tip that we would like to include for restaurateurs is to focus on their packaging and delivery. Since most restaurants are switching to home delivery and using their untapped delivery resources to generate revenue, efficient packaging is the need of the hour. All in all, the only way to go forward in the current scenario in the UAE is to focus on increasing sales of your cloud kitchen restaurant. 

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