7 Most Common Challenges in Running a Cloud Kitchen Business (And Solutions)
Cloud kitchen is also known as a ghost kitchen or virtual kitchen. It is just like a restaurant kitchen where food is prepared for delivery and takeout only. Yes, the only difference between cloud kitchens and restaurants is that there is no dine-in option in cloud kitchens.
The concept of a cloud kitchen franchise has been in the Indian market since 2011. Rebel Foods is India’s oldest cloud kitchen brand that is operating successfully to date. Cloud kitchens have its popularity since the dangerous pandemic hit the world. So many kitchens have fired up during that era.
During the pandemic, we saw restaurants were not allowed to have a dine-in option instead only delivery and takeout were allowed. Without a doubt, most restaurants during that phase earned amazing profits from such type of method. Looking at this opportunity many people started opening cloud kitchens from their homes and registered themselves on Zomato and Swiggy and started earning profit.
From the customers’ point-of-view they got authentic homemade food at a reasonable price tag. Instead of going outside for dine-in options, people started to order food from the best places in their comfort zones.
This slowly changed the customer preference from dining out to ordering food online from cloud kitchens and that is how cloud kitchens started getting popular in India. Additionally, one of the greatest advantages of opening a cloud kitchen is that it requires very low investment. So, more and more people started to open cloud kitchens.
But, this easy business opportunity also came with huge challenges. There are numerous significant challenges that cloud kitchen owners face. Due to easy entrance into the market, the competition for cloud kitchens is quite high in the Indian market.
Competition not only came from other cloud kitchens but, from larger brands as well. Initially, people did not trust any new cloud kitchen opened, there was very limited customer interaction, and the list goes on.
The primary focus of this article is the challenges faced by cloud kitchens in India. Additionally, we will also try to give out solutions to those problems of how owners can overcome them.
7 Most Common Challenges in Running a Cloud Kitchen Business (And Solutions)
Entering into the food industry will always give lots of barriers and challenges. It surely won’t be easy for people willing to open a cloud kitchen, restaurant, QSR, or anything.
In every type of food startup, there are always challenges you will face. Here are some of the most common challenges and solutions in running a cloud kitchen business:-
Customers are the same
Do not believe that customers who dine in will or order from Cloud Kitchen. In the cloud kitchen, the food reaches customers after 30 or more minutes. It is natural the taste of the food changes from the time it reaches customers. They will surely not be satisfied if the taste or the quality of the food degrades. In a cloud kitchen, this is one of the greatest challenges as this is the only process that you need to follow.
Solution
The best way to overcome this challenge is by choosing a food which can be eaten after 30-40 minutes. Make sure you conduct proper research on your food or even in its ingredients so that they do not affect your final food when they are delivered after several minutes. If you want total satisfaction from your customers then you must know what your food tastes like after 30-40 minutes.
Example
Food products like pizza are delivered within 30 minutes and they arrive almost cold but people do enjoy them anyway. Similarly, you may come up with a product that will retain the overall taste of the food product and customers, at the same time can enjoy the food even after 30-40 minutes.
Different in marketing
People who are running a traditional restaurant, QSR, fast-food stall, or anything their main sign of attraction is location.
If they are located in a highly populated and demanded area then people tend to visit such restaurants more often. The marketing for such types of restaurants or food businesses is easily done but, that is surely not the case in cloud kitchens.
In a cloud kitchen, you have to rely on e-commerce websites or platforms from where people can see your digital restaurant and order. You have to find your place in these platforms and legally register yourself with your kitchen. Most of the platforms do not take any registration fees but, they might start in the future.
Solution
Pictures, menus, offers, discounts, and packing options must be engaging, paid advertisements so that customers are attracted. Unfortunately, pamphlets, flyers, or any other traditional marketing options will not be acceptable in the cloud kitchen business.
Example
Talab Tales is a cloud kitchen YouTuber who has put advertisements on various social media platforms and Zomato itself. His menu options and offers are very attractive.
Operations are not the same
Most people who are planning or have recently opened a cloud kitchen think that the operation is the same but, they are not. In the traditional restaurant business, customers come to the place not only to enjoy the food but, they enjoy the ambiance, environment, and other facilities offered by that restaurant. This is how they can easily attract customers for a second visit but, that is not the case in a cloud kitchen.
If customers are ordering from your cloud kitchen and you keep on denying that then, the algorithm of your restaurant in Swiggy and Zomato goes down. Other than this, if your food preparation time is being delayed then your algorithm goes down, the same goes if there is a delay in order pickup as well.
Solution
In this challenge, you must ensure that your cloud kitchen opens on time and by then the food is already prepared. Punctuality is the key to opening a cloud kitchen and retaining or gaining new customers digitally. Make sure the algorithm has a good flow and it recommends your restaurant at the top when searched by any potential customer.
Example
Talab Tales opens his cloud kitchen on time and he receives orders on time from customers.
Owners mindset
The mindset of traditional restaurant chains and cloud kitchens must be different. If you plan to operate your cloud kitchen with a restaurant-type mindset then it surely won’t work for you.
Solution
Being a cloud kitchen owner you must make a different and unique strategy to attract or gain customers. You could make attractive changes in menu options, coupons, discounts, and your unique packing style, or even include memo notes for customers. These are some of the ways how you can both advertise and retain customers for your cloud kitchen.
Example
Talab Tales, a cloud kitchen YouTuber sends small messages to his customers which is a unique strategy for retention.
Managing logistics
Your cloud kitchen will only flourish when the delivery is made on time. In most cases, the delivery partner does not arrive or they tend to make a late delivery and this is where customer satisfaction degrades. Sometimes the quality and packaging of the food also get hampered. It is one of the greatest challenges faced by any cloud kitchen in today’s Indian market.
Solution
The best way to overcome a logistic or delivery challenge in a cloud kitchen is by registering in a highly trustable platform. Make sure you choose a platform where on-time delivery can be assured. If you are getting many orders in a day then you could even think of hiring extra staff so that the delivery can be made on time.
Example
Talab Tales, before opening his cloud kitchen on Zomato, finishes all his food preparations.
Competition
As people are getting into the cloud kitchen business so easily the competition is growing each day. There is a huge competition in opening and running a cloud kitchen in India. In India, there are so many food brands that offer food at a great and reasonable price tag and have created a huge customer base. It surely won’t be easy for newcomers in the industry to set up a cloud kitchen and get orders constantly.
Solution
The best way to overcome competition is by studying the competitors and offering something different. When you offer something very different and unique to customers they will always refer to others and you will create a good customer base in the market. In a cloud kitchen, word of mouth is one of the greatest marketing weapons that you can create.
Example
Talab Tales always ensures that he appreciates every feedback that he receives from customers online.
Lack of customer interaction
One of the biggest challenges of conducting business online is not getting to meet your customers. Interacting with customers and getting their live feedback is very crucial for the growth and development of your business. But, this is quite not possible when you have a cloud kitchen.
Solution
The best way to interact with your customers is by sending you personal messages on your social media profiles. Or you could even share your contact number on the online platform so that they can give you feedback.
Example
Talab Tales sends special messages through its food delivery to customers so that it makes their day.