Cloud Kitchen:

Future model for

the global Food
Industry
What is Cloud Kitchen ?

• A cloud kitchen is a production unit where food is prepared. There is

no dine-in facility. The food can be ordered online, hence, the
name cloud kitchen.
• It relies entirely on third-party integrations or home delivery orders
placed on call or through a website
• The cloud kitchen format adds more flexibility and customer reach by
using various food delivery aggregators and social media
• One can create multiple brands and cuisines from the same kitchen

How it works ?

The parcel is
The orders come The cooked food
Kitchen receives The meal is delivered to the
in from the gets packed
the order details cooked customer by
customers properly
delivery person

The entire process of order execution can be tracked online by the customers
Cloud Kitchen vs Dine-in Restaurants
Basis Cloud Kitchen Dine-In Restaurants
• Does not need parking space or footfall to be • Located in areas where there is high footfall and visibility
generating revenues. among other things.
• Thrives on online ordering and is generally located • Need to be highly accessible, have ample parking space.
Location around residential localities or corporate areas. And comply with the local zoning laws.
• Need less investment in terms of kitchen area, rent and • Requires relatively higher investment in terms of rent,
staff cost. layout planning, safety approvals, interior set-up and so
on.

• Since cloud kitchens need less area and does not need • The restaurants need to be located in an up-market locality.
space for customer seating, the rent component is • To cater to a large clientele, the restaurant needs to cut-out
Property
Cost minimal and completely depends upon the locality. dine-in area and a large kitchen.
• These two factors add substantially to the rent component.

• The number of staff required in a cloud kitchen is very • Restaurants require higher number of staff.
less as compared to dine-in restaurants. • This model generally needs a head chef, kitchen staff and
Staff Cost • The model generally requires a head chef, 4-5 kitchen servers.
staff and a housekeeper (depending on scale of • Staff strength depends upon the number of guest the
operations) restaurants is catering to.
Cloud Kitchen vs Dine-in Restaurants
Basis Cloud Kitchen Dine-In Restaurants
• Cloud kitchens usually offer different cuisines, which is • The cost is directly proportion to the number of cuisines and
why the operational costs could vary widely for different the variety of the menu the restaurant is offering.
brands. • The restaurants also need to stock up high inventory to
Operational • Rebel Food which owns Faasos and Behrouz Biryani, account for unforeseeable demand.
Cost for instance, which serve wraps and biryani,
respectively may incur additional expenses than a
single cuisine food service.

• Operating a cloud kitchen is much more profitable in • The average profit margin for any restaurant, taking the
comparison to dine-in restaurants. basic considerations like rent, payroll, utilities,
Profit • Generally it is seen that could kitchen can make up advertising, equipment repairs, and general
Margin
to 15% profit margin, depending upon their maintenance into account, is anywhere between 3% -
allocation across the cuisine offered. 5%.

Cloud kitchens are easy to set up, and have high profit margins
Some brands operating on Cloud Kitchen Model

Many brands have created a niche depending on customer convenience and requirement
Pros and Cons of a Cloud kitchen

1. No personalized touch to build customer relations.

2. Limited audience: can only reach out to tech-savvy
customers
3. Limited brand presence compared to traditional
outlets

1. Streamlined order process

2. Low investment
3. Low operational cost
4. Better expansion opportunities
5. Scalable and customizable sue to
greater digital interaction
Types of Cloud Kitchen Business Models
1 The Independent Cloud Kitchen

Single brand, single kitchen, no storefront.

How it works

Delivery via existing

Order comes from Single cloud
Specialized cuisine Delivery only delivery
online sources Kitchen
aggregators

No. of Brands

Brand
A

This concept has only one kitchen and one brand name. One of the preferred ways to start business and enter into the
F&B Industry
2 The Multi-brand Cloud Kitchen

Multi-brand, multi-cuisine, single kitchen, no storefront

How it works

Order comes from Single cloud Usually have Delivery via

Multiple brands Delivery only
online sources Kitchen multiple cuisines aggregators

No. of Brands

Brand Brand Brand

etc…
A B C

This concept has single kitchen with multiple brands. This model has seen lot of interest from PE/VC players as it
generates more revenue, scalable model, targets different audience and cost effective
3 The Hybrid Cloud Kitchen

Single/multi-brand, single kitchen, multiple outlets with a storefront.

How it works

Delivery & take Self delivery &

Order comes from Single centralized Usually have
Single/multi-brand away from multiple delivery via
online sources cloud kitchen multiple cuisines
outlets aggregators

No. of Brands

Brand
A

This model has one centralized kitchen and one brand name. It however introduces the concept of take away delivery;
thereby creating an impact with respect to branding among its customers
4 Delivery App-owned Rented Cloud Kitchen

Aggregator-owned, multi-brand, rented co-working kitchens, no storefront

How it works

Takes online order Rented space can be

Multiple cloud Usually have Delivery via
from only owner Multiple brands provided by delivery app
kitchen partners multiple cuisines aggregators
delivery app to cloud kitchen partners

No. of Brands

Brand Brand Brand

etc…
A B C

The aggregator OWNS different brands which are showcased on its app, and the food can only be ordered through the owner delivery app. The
aggregator can provide rented co-working kitchen to startup kitchen partners and give access to capital via equity.
5 Delivery App-owned Cloud Kitchen + Takeaway

Aggregator owned, multi branded, rented co-working kitchens with storefront

How it works

Online order from Rented space can be

Multiple kitchen Usually has multiple Delivery via
only owner delivery Multiple brands provided by delivery app to
partners cuisines aggregators
app cloud kitchen partners
+Take away

No. of Brands

Brand Brand Brand

etc…
A B C

The aggregator OWNS different brands which are showcased on its app, and the food can be ordered through this
owner delivery app or available for takeaway.
6 Fully Outsourced Cloud Kitchen

Cooking and delivery fully outsourced

How it works

Cloud kitchen buys

Take orders from all Outsource to cloud and stores the raw Prepares the food at Delivers it to end
sources kitchens material as per its centralized kitchen customers
requirement

No. of Brands

Brand Brand Brand

etc…
A B C

In this model, everything is outsourced from purchase of raw material to cooking of dishes. The promoter focuses on
curating the right menu and can have different brands for different target customers
Cost of
Opening a
Cloud Kitchen
Breakup of Cost

Rental Licensing Staff

Since the area required is very small, the FSSAI, Health Trade License, Tax Since the headcount is very low in such
rent component can cost approx. Registration License cost models.
INR 25,000-35,000 per month INR 15,000-20,000 per annum INR 40,000-70,000

Kitchen Equipment Marketing Misc.

Depending upon the cuisine, the Marketing includes various digital and Design, Interiors and Furniture & Fixtures,
equipment cost can be estimated to social media channels. POS software, staff uniform
INR 2.50 Lac (when 50% of the kitchen
equipment is bought second hand) INR 15,000-20,000 per month INR 75,000- 1.00 Lac
Economics of Cloud Kitchen

Typical Size of a • 300-1,200 sq. ft

setup

Cost to setup a • Rs. 80 Lacs-1 Cr

cloud kitchen

No. of orders per • 10,000 orders is usual business

day
• 3-8 Kms
Service radius

• 35% gross margin, against 15%

Margin from conventional restaurants
Source: Industry
Recommendations
to Hotel owners
Strategy for Hotel Owners

▪ The hotel can lease out under-utilized kitchen space to online aggregators
Use of under utilized • Profit sharing on revenue share also possible
kitchen space
▪ Hotel and online aggregator can come together to launch multiple new food brands for different
Launch food brand target audience.
▪ The top seller dishes can be part of the hotel’s F&B menu.

▪ Hotels kitchen are operational 24 hrs*365 days

Operational 24*365 ▪ Can be utilized for late night delivery
▪ Being inside a hotel, safe & secure surroundings

▪ The aggregator brings technology platform on the table

Win-win situation ▪ Hotel owner is utilizing the dead area
▪ Both are creating revenue for each other

• With home delivery , food can be delivered within 8-10 km of the hotel radius
Delivery Model • Helps in brand promotion of the hotel
• Special discounts and loyalty program to use hotel facilities i.e gym. spa etc

• All approvals are in place

Approvals • No additional cost involved
WE UNLOCK A
360 DEGREE
FINANCIAL
ECOSYSTEM
About us
• Delhi based Xpress Funding Advisors (XFA) is focused on providing debt solutions across Corporates and Startups.
• The firm has over 25 years of experience and is under the leadership of Mr. Ranjit Khattar, FCA.
• As opposed to the ‘One Size Fits All’ approach, XFA provides tailor-made debt solutions to companies, enabling them to bridge the
working capital discrepancy and strategically allocate capital.
• Bringing more than three decades of collective underwriting experience, XFA helps its clients leverage the banking ecosystem
through their domain expertise and extensive network.

What we do

▪ Providing assistance in raising banking limits

Debt Syndication ▪ Excellent relationships with various renowned Banks/FI/PE funds

▪ Detailed assessment of working capital requirements

Working Capital Management ▪ Preparation CMA/Financial Projections

▪ Conducting detailed department wise Internal Audit

Advisory Services ▪ Advising management on the areas of improvement

▪ Cash Budgeting and conservation of cash

▪ Budgeting critical vendor payment
Cash Flow Analysis ▪ Waiver from different government departments as per policies
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What we do in the Hospitality Sector?

Services offered
▪ Providing assistance in raising banking limits.
▪ Restructuring existing loans
Debt Syndication ▪ Raising working capital limits
▪ Excellent relationships with various renowned Banks/FI/PE funds
▪ Dept wise Audit analysis
▪ Budget planning Dept wise
Cash Flow management
▪ Cash flow analysis

▪ Conducting detailed department wise Internal Audit

Advisory Services ▪ Advising management on the areas of improvement

▪ Cash Flow management

Departments covered ▪ Front office
▪ Food & Beverage
▪ House Keeping
▪ Minor Operating Department (MOD)
▪ Security
▪ IT
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▪ Security
▪ Inventory management
Contact Us

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• [email protected]
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