People are increasingly making cloud kitchen investment in the UAE. The COVID-19 pandemic has made restaurateurs notice the cost advantages of the cloud kitchen concept. Restrictions on dine-in restaurants and a steep fall in revenues have driven restaurateurs to explore the cloud kitchen format.
Restaurant operators are also responding to the challenges of the new normal by shifting to the kitchen-as-a-service (KaaS) model. The KaaS market in the UAE was worth USD 70 million when 2020 ended and is anticipated to reach USD 225 million by 2023, owing to the increasing interest of restaurateurs to use common kitchens for different brands and set up cloud kitchens.
7 Points To Ensure While Making A Cloud Kitchen Investment
There are numerous factors that one should consider before investing in dark kitchens. There is a set of minimum requirements that make a cloud kitchen viable. Let’s look at them one by one.
1. Location And Space
Cloud kitchens have no visible dining space, due to which choosing a prime location with high rental costs is not a consideration. The points that should instead be considered while selecting the perfect location for your cloud kitchen are:
- The location should be easily accessible for the delivery boys and suppliers as they are likely to be the only visitors.
- An affordable location can diminish the rental costs of the cloud kitchen.
- The cloud kitchen should serve food that meets the tastes and preferences of a particular locality. For example, serving vegan food in a largely non-vegetarian area does not make sense. Hence, it is vital to keep in mind the target audience while choosing the right location for your cloud kitchen.
- The right location should be the one that has all the required amenities including a proper water facility, drainage system, sufficient electricity supply, and accessibility to the raw materials.
- One should make sure that the cloud kitchen is big enough to accommodate different brands in one space. A cloud kitchen space should at least be around 250-300 sq ft.
2. License and Registration
Having a license beforehand is necessary before making a cloud kitchen investment to avoid unnecessary legal hassles in the future. Trade License and Food License are the major licenses needed to set up a cloud kitchen in the UAE.
The procedure of getting licenses can be cumbersome and time-consuming. Hence, it is always advisable to hire an agent who can complete these tasks for you in a short period while you focus on the operational aspects of your cloud kitchen.
3. Kitchen Apparatus
The kitchen apparatus is at the core of any cloud kitchen. You need to take care of the equipment required for your cloud kitchen based on the type of cuisine you serve. However, you need to be mindful of the minimum requirements of a cloud kitchen.
Kitchen equipment should be of high quality to ensure smooth functioning. A good cloud kitchen will always be equipped with the essential elements, from cooking ranges and refrigerators to exhaust systems and fire extinguishers.
4. Positive Work Culture
A cloud kitchen requires experienced staff to work efficiently. A cloud kitchen typically receives more orders as compared to restaurants which creates a need for adequate staff. The staff should be able to handle multiple orders with ease and accuracy. A sufficient number of chefs, helpers, delivery boys, etc., should be included in the staff of a cloud kitchen.
Employee satisfaction has a lot to do with how they are treated by management. Thus, a restaurateur should ensure good working conditions and maintain a positive employer-employee relationship. It might look insignificant, but these factors reduce the churn rate and help in retaining the staff.
5. Good POS Software
Handling different brands in a cloud kitchen is a difficult task. One is bound to miss orders or make mistakes in bill calculations if done manually. Before setting up a cloud kitchen, one should look for POS software that best fits one’s operational needs. A POS software ensures seamless kitchen management operations, reduced turnaround time, and increased profits.
A good POS system also takes care of inventory management, bill calculations, customer engagement, online ordering, analytics, third-party integrations and much more! It is safe to say that digital transformation adds to the long term value of a cloud kitchen.
A cloud kitchen owner should provide appropriate packaging for the food they deliver to their customers. Packaging plays a crucial role in creating a positive brand impression in the customer’s mind. Hence, good packaging will create better brand recall and eventually drive repeat orders.
The customer experience can be enhanced with the right type of packaging. Thus, a restaurateur should invest in high-quality packaging material like ceramic, glass, aluminium, that meets the industry standards. Furthermore, spoons, plastic containers etc., should be included in the packaging to ensure safe, healthy and neat packaging of the food.
7. Online Ordering And Marketing
Since cloud kitchens are delivery-only outlets, their survival depends on online ordering. Thus, the investor needs to look out for customer-friendly online ordering portals and websites to receive orders online. Third-party integrations with food aggregators like Deliveroo, Talabat, UberEats, etc., also do the job equally well. No doubt, integrating with these brands creates a good presence of your cloud kitchen, as well as increases, return manifold.
Make sure your cloud kitchen has a good online presence and is marketed well. It is crucial to experiment with different marketing strategies for the exposure of cloud kitchen. Leveraging the numerous social media platforms like Facebook, Instagram, Twitter, etc., can expand your reach and customer pool. The restaurateur can hire a marketing manager to take care of all the marketing activities and ensure better brand discovery.
With the appropriate technologies combined with the above-listed factors, a cloud kitchen can thrive in the UAE market. Consider all these factors before making a cloud kitchen investment.