Cloud kitchens have been ballooning in popularity, and the reason for this is simple: they offer a more streamlined and efficient way of running a restaurant by removing the bottlenecks of a dine-in location and going all in for delivery orders.
But they aren’t exactly a new idea. What’s changed is that they’ve become part of mainstream F&B trends thanks to operators like Smart City Kitchens making them accessible and far better known. Combined with the effects of the pandemic, more and more people have started ordering their food online, as opposed to dining in at a restaurant. What this means for restaurants is that they need to adapt in order to survive – and opening cloud kitchen locations is arguably the best way of doing so. Here are some of the most commonly asked questions people have when considering opening a cloud kitchen in Singapore.
1. What is a cloud kitchen?
Cloud kitchens, also known as a dark, ghost, or virtual kitchen, are a form of commercial kitchen with a delivery-centric business model. Located in residential areas and within the delivery radius of a largely untapped customer base, cloud kitchens are able to reach a greater number of customers than a traditional restaurant.
In a cloud kitchen, there is no physical storefront, dining area, or cashier. This removes the need for huge front of house teams, instead allowing restaurants to focus exclusively on staff who work to fulfill orders and prepare food.
2. How do cloud kitchens work?
The delivery centric business model is the opposite of the dine-in business model. When customers order food from your restaurant via online delivery apps (Foodpanda, Deliveroo, GrabFood etc), you prepare the food, handle the order, and hand it off to the courier all from your kitchen space. This low-cost, high-efficiency setup gives restaurant owners the opportunity to increase their profit margins in a manner that would have been near-impossible in a traditional restaurant.
3. How do cloud kitchens generate profit?
With smaller teams, less food wastage issues, and lower operating costs together with the potential for more orders, cloud kitchens are able to earn more profit than a typical dine-in restaurant by eliminating bottlenecks and streamlining processes.
Cloud kitchens are also commonly used to run more than one brand from the same space. This allows you to nurture synergy between different brands and ensure your kitchen is being used at peak capacity throughout the day, all while doubling up on expensive equipment and supply chains.
4. Why are cloud kitchens popular?
In 2021, the food-delivery industry in Singapore is expected to value more than $1 billion – and it’s forecast to continue rapidly growing in the years ahead. Cloud kitchens provide businesses an efficient, cost-saving, and pragmatic approach to joining the food-delivery market. They offer restaurants the opportunity to adapt to the new trends transforming the industry, boosting profit margins and scaling operations.
5. What are the different kitchens available?
Cloud kitchens can vary depending on the needs, location, and cuisine of the brand. We offer a variety of kitchens to our clients ranging in size from 10 square meters to 23 square meters. Within this space, our tenants are encouraged to experiment and find the most efficient layout for them and their equipment.
6. How expensive is it to operate a cloud kitchen?
Cloud kitchens are significantly cheaper than their traditional brick and mortar restaurant counterparts. As little as $10,000 can get you started in a cloud kitchen, which is in stark contrast to the $200,000 or more you can expect to pay for a brand new dine-in location.
7. What locations do Smart City Kitchens operate in?
We have kitchens across the country, serving large volumes of potential customers. Depending on your needs/desired location, you can rent a cloud kitchen in:
- Telok Ayer
8. What is included with the kitchen?
On top of the kitchen itself, Smart City Kitchens provides partners with a number of additional services and benefits geared towards making our spaces simpler and easier to work in. This way, you can focus on growing your business rather than sorting out time-consuming logistical details. These include, but are not limited to the following:
- Daily cleaning services
- Wifi & phone line
- Security services
- Central air conditioning
- Commercial refrigeration
- Shared dry, cold, and frozen storage
- 24/7 Building access
- ANSUL fire suppression systems
- 3-Phase electricity
- And much more
Smart City Kitchens is leading the charge when it comes to F&B innovation in Singapore.
If you have any other questions about cloud kitchens, don’t hesitate to get in touch with us. A member of our team will be in contact as soon as possible.