Cloud kitchen: a recipe for growth in food business?
When the coronavirus pandemic hit Bangladesh early in March, most industries got up and on their toes. Fearing bankruptcy, they scratched their heads and looked for a way out. This was no different for the restaurateurs of Dhaka. However, despite the disastrous setbacks of the pandemic's early days, their business remains one of the most thriving sectors in the city.
One of the keys to this has been the switch to an online-focus in doing business. With social distancing making dine-in options unsuitable, restaurateurs have moved towards more financially viable options to help sell their dishes. Of them, many business strategies have shown promise, but none more so than the concept of cloud kitchens. This not only offers hope, but as the last few months have shown, it's also a recipe for growth!
THE BRIGHTER SIDE OF THE BUSINESS
Cloud kitchen, focused on food delivery rather than dine-in services, is nothing new as a concept, but its popularity has been unprecedented since the coronavirus unsettled the conventional food industry.
Compared to brick-and-mortar restaurants, virtual kitchens are much cheaper to set up. While starting a restaurant in Dhaka can be a million-taka affair, the prospect of setting up a virtual kitchen remains within five figures. There is no need to go for prime locations, and no need for extravagant interior decor. Promotion is done through social media, word of mouth, and reviews in various food related groups are enough for most businesses to sustain.
The operating costs involve only that of hiring a chef and perhaps, a helping hand.
Tanzia Zaman (34) is a full time teacher. But in between taking online classes, she now focuses on running her new business, 137 Dessert Club. Focusing solely on baked food, she operates from the comfort of her home kitchen.
"Although this has been a dream for a while, my teaching commitments never allowed me to venture out. The pandemic provided me an opportunity, and I decided to start a few months ago. So far, the prospects seem promising," said Zaman.
She is not alone in this. Many like her have recently rolled out their "ghost kitchens", a viable business idea, given the current circumstances.
"Mezban On The Go" is a pet project of Natasha Chowdhury, and like many others, she too, relies on social media for taking orders.
"We have a Facebook page and whoever wants to order can do so through messenger. There is also a hotline number." she told The Daily Star.
"We take 1-2 days to deliver, depending on the item and the quantity of order. Since we have just started the business, demands are not too high, but it seems things will pick up soon."
While most other virtual kitchens offer a wide range of foods, Chowdhury has decided to keep the menu small in order to focus on quality.
"We cook our mejbani beef in an authentic style. We use wood to make fire, and cook in a traditional mejbani pot. In the whole process, we ensure that strict hygiene standards are maintained," she said.
"We strongly believe that our virtual kitchen will be a success, and hopefully, we will start corporate catering as soon as we can," she
said with conviction. On top of this, "Mezban On The Go" hopes to start a physical presence as soon as possible.
The fact that there is small overhead cost involved in taking online orders, Dhaka has seen a boom in opening of cloud kitchens. Without any costly investment, the menu can be altered on demand, and promotions are possible without costing a fortune in branding, as advertising in social media is cheap.
"The fact that F-businesses operate outside the tax net is an added boon to the virtual restaurant business. Had there been tax implications, it may not have been possible for us to start a kitchen amid the pandemic," said another cloud kitchen owner requesting anonymity.
OTHER SIDE OF THE SPECTRUM
Starting a virtual kitchen can be as simple as starting a Facebook page, but building and maintaining one can be challenging.
Sanzida Hassan started her own catering service a couple of years ago. "I was known for my cooking skills and that was my only tool. Like many others, I made the mistake in believing that it is enough. I decided to start the business and use word of mouth for promotion. Although the initial response was positive, attending to even the fewest orders I received every week seemed like an overwhelming task. I was forced to close my kitchen within a short time."
While she admitted the ongoing pandemic gave her reasons to consider reopening the business, Hassan is pleased that she ultimately refrained from doing so.
"A few of my relatives have started their cloud kitchen in the last few months. I have tried to dissuade them, but to no avail. Some of them find it difficult to answer to every customer inquiry. For every order you receive, at least two to three people will request for the menu and ask questions. It is not as easy as it seems if one is operating alone," she added.
PROBABLE PITFALLS
Reema Islam, food enthusiast and a specialist on its heritage and cultural aspect, observed that although on the surface the whole concept of virtual kitchens seem godsend, it is not without its own share of problems.
"The food business has always been one of the most risky ones. Taking it online doesn't make much of a difference," she said.
As the whole endeavor rests on online promotions and word of mouth, one bad dish, a few bad reviews, and the whole business stands a chance of collapsing.
"Maintaining standards is crucial, but difficult all the time. Filling orders seem lucrative because as you do well, your customer base will grow, meaning you need to expand. Unless you are prepared, it can never be easy," she added.
Reema Islam is also apprehensive about the sustainability of naïve start-ups. "For now, we have many players in the market so it is all diverse, but this too might mean too many people trying out this new fad and might prove to be a flash in the pan -- here today gone tomorrow!"
There was a time when "take away" or online orders served as a side venture for established eateries, adding to the revenue generated. In the time of the new normal, Zaman and Chowdhury believe that cloud kitchens are promising enough to ensure a profit and make it a viable business. That is why they started in the first place!
According to Reema Islam, one of the contributing factors of the soaring popularity of cloud kitchens is that they provide contactless service. However, this means that the need for maintaining a logistic support system is important. Hygiene is also more important now than ever before.
"Chefs should prepare food wearing masks and gloves; hands sanitised every time a dish is prepared. There is a need for utmost care while using utensils for meat, poultry, cheese, vegetables, etc.
"These are of course in addition to the normal health measures like not re-using frying oil," she said.
According to the World Health Organization (WHO), it is highly unlikely that people can contract Covid-19 from food or food packaging. In addition, most budding entrepreneurs are making the most of the situation. Although the day seems far away, the coronavirus pandemic will end, but before that, there seems to be no end to the rising number of cloud kitchens in Dhaka.