Setting up a dark kitchen within the budget

COVID-19 has acted as a catalyst for the hospitality industry to pivot. Be it fine dining or quick service restaurant (QSR), delivery models and the adoption of the cloud kitchen have shown results in reviving the hospitality industry.

However, the budget plays a critical role in setting up a remote kitchen that can bear maximum results within a minimum investment.

Riding along with ghost kitchens

Cloud kitchens and dark kitchens, also known as ghost (virtual) kitchens, have existed for a while in India but are finally getting their due traction due to the social distancing norms and safety guidelines issued by the government to curb the impact of the pandemic.

Owing to the latest developments and technological integrations, especially the cloud kitchens, the food and beverage (F&B) industry’s revenue is expected to show an annual growth rate of 14.4 percent in the term of 2020-2024, resulting in a projected market volume of $10,058 million by 2024 end.

The existing restauranteurs and established businesses might find it easy to set up a dark kitchen but things get a little harsh for the newbies in the industry.

The established operators have a customer base and are aware of who and how to target but the new entrepreneurs still have a long way to go with hit and trial before they figure out a suitable way of carrying out successful operations in their dark kitchens.

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The teething challenges

The food and beverage industry is known to be an intensive sector that requires professionals to pour all their energy and heart into the business and the daily lapse or damage control is usually covered by a complimentary snack, drink, or dessert.

Dark kitchens work differently than this structure as one has to tread the path of setting up their cloud kitchen spaces very carefully and to keep a note of every rupee spent as the return on investment (ROI) may take four to six months.

Spend on professionals

A debutant entrepreneur or a professional who is a new restauranteur has to start investing in the business to eventually have the returns. One of the sectors where heavy investment is required is the infrastructure of the dark kitchen.

Building a commercial kitchen needs extensive detailing which is carried out in the light of professional guidance. There are a lot of areas which need to be paid heed to. For instance, one needs to have a good drainage system in the kitchen to avoid clogging or any other plumbing-related hindrances.

Along with this, electrical connections and efficient HVAC are required to be functional to avoid any short-circuits or ventilation barriers while cooking and other activities.

Maintaining high-quality standards of hygiene and internal systems require the kitchens to be built with utmost precision and professionalism because it will directly impact the business of the restauranteur.

Formulating a budget that is inclusive of taking care of all these factors along with taking care of ergonomic risks is the foundation of a successful cloud business. 

Setting the budget will require the entrepreneur to calculate a rough estimation of the expenses as the services needed are listed linearly and with all transparency. The budget has to be case-specific and requirement-centric than being a general idea for any sort of a kitchen or food-related business.

While working around the budget and estimations, the entrepreneur should also keep in mind the ROI of their venture and if it is going to balance the expense with the revenue earned.

Another significant asset for the cloud business is the equipment that one invests in. Tapping into various eCommerce sites and looking for deals and comparisons is one way that could be of great help.

Ideally, the equipment which is not used very frequently in the kitchen should be spent the least on, and if a restauranteur is not certain of the requirement and expenditure on the equipment, he or she should reach out to their known professionals in the same field and then take a final call.

One of the added advantages of the COVID-19 pandemic here would be that the entrepreneur has ample time and can compare and negotiate the terms of the place, the infrastructure, its designing and such other significant parameters.

Some of the essentials that should be kept in mind while building a cloud/dark kitchen are checking the basics of ceiling height, power back-up, water and electrical meters and supply, avoiding going to higher floors, a place for small RO and HVAC systems. 

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Additional factors to consider

Some of the factors other than the infrastructure and equipment to consider while stationing a cloud kitchen include: 

• Researching well on your product and how it matches the target audience. 
• Planning and formulating the discovery ideas well in advance and negotiating hard with the delivery and discovery partner as they come to mutual terms with the person in charge. 
• Planning the manpower of the place and avoiding over-hiring/under-hiring of staff.
• Training the team well before going live and giving them a proper orientation to provide maximum customer satisfaction.
• Focussing on presentation skills and thus paying special attention to packaging.
• Keeping the menu concise and tempting to attract customers and avoiding over-promising.

The future of F&B

Cloud kitchens are not only expected to see a rise in India but also expected to pan out globally as the future of the F&B industry, and the new normal for people all across the world. As per a research by Goldstein, cloud kitchens are going to serve as a future-forward tool, empowering the food industry at all levels.