IS THE HYPE AROUND CLOUD KITCHENS OVER?

A LOT OF BIGGER AND SMALLER PLAYERS INCLUDING THE LIKES OF ZOMATO, SWIGGY AND MUKUNDA FOODS HAVE SHUT DOWN THEIR CLOUD BUSINESSES

- S SHANTHI

Cloud kitchen as a business model has had a roller-coaster ride since the beginning. An unfamiliar business model till the pandemic, it witnessed a surge in demand as customers were hesitant to dine out. A TechSci research said that India's cloud kitchen market is anticipated to grow with approximately 15.5 per cent to 17.5 per cent CAGR value during the forecast years 2024-2028 and may achieve a market value of $2.5 billion by 2028F.

In addition to that, the flexibility and lower CAPEX it offered as compared to traditional restaurants made the business model gain a lot of attention from entrepreneurs and investors alike. They even felt that many legacy restaurants would add a cloud kitchen layer to their business. According to an IBEF report in November last year, there are over 20,000 active cloud kitchens in Delhi, and their number is increasing by over 20 per cent annually.

"Even existing restaurateurs can use cloud kitchens to experiment with their new offerings in the menu or expand to a new location. With delivery aggregators expanding into the cloud-kitchen vertical, there is enormous market potential in the next 3-4 years," said Ankit Mehrotra, CEO and co-founder, Dineout told us in an earlier interview.