As the world started pulling itself out of the Covid-19 pandemic, restaurant kitchens took a new turn with e-commerce booming and food and groceries increasingly being ordered online during lockdowns.

Parallel to accelerated digitisation in telemedicine, retail, food delivery and online shopping, a demand for food businesses to develop infrastructure at the backend emerged, and the concept of cloud kitchens — also known as dark kitchens or ghost kitchens — started taking shape.

An emerging global business model for restaurants, cloud kitchens offer purpose-built, commercial cooking facilities without a storefront for take-away for food brands which operate via online food delivery platforms.

These centralised, licensed, commercial food production facilities rent space to one or two to dozens of restaurants to prepare a delivery-optimised menu, all operating under one roof. Imagine a large warehouse with numerous stainless steel work stations (mini-restaurants), prep tables, hood vents, stoves, ovens and sinks, each with its own orders flowing in directly from customers.

With advances in technology and changes in consumer habits, virtual restaurants and ghost kitchens are taking over the traditional brick and mortar model

The global cloud kitchen market is estimated to be worth 57 billion dollars in 2021, and is expected to grow up to 13 percent during 2022-2030, according to Kenneth Research, a New York-based global market research firm.

In 2020, there were over 8,000 cloud kitchens in China, representing a 70 percent increase in food delivery, and 1,550 cloud kitchens in the US, while Kitopi, a Dubai-based cloud kitchen brand, invested 415 million dollars for market development.

With its youth bulge, where under-30-year-olds make up 64 percent of the population pyramid, 36.5 percent internet penetration, further supported with 52 percent of the market being smartphone users (Dawn February 28, 2022), Pakistan is a lucrative market for tech growth driven by ventures such as cloud kitchens.

As the pandemic enabled online food delivery businesses in Pakistan, cloud kitchens were capitalised upon by enterprising entities. A number of players made their entry, while existing market players, such as Pandakitchens, Hotpod, Byte, Eat Cloud, and Lettus Kitchens to name a few, diversified further.

“Over the last few years, the food industry has found it difficult to sustain business and commit to fixed costs at large brick and mortar outlets,” explains Arsalan Mahmood, who heads commercial innovation at a premier food delivery and cloud kitchen service. “Our cloud kitchens financially enable restaurants to explore expansion without investing in infrastructure.”

Facilitating kitchen space for restaurants and home-based ‘foodpreneurs’ in Karachi, Lahore and Multan, Pandakitchens were launched in August 2020. Several home chefs and restaurants that had culinary expertise but needed operational support have kicked off through cloud kitchens. They pay a percentage of commissions on the total revenue they earn, as opposed to laying out hefty set-up costs and rentals, which would be impossible to pay off without infrastructure or capital.

Salman Shaukat, who is in his 40s, began exploring his love for cooking when the pandemic affected his trade activities. Travel and his exposure to various cultures had not only altered his perspective towards life, but also introduced him to innovative flavours. Finding the right space for his culinary talent to flourish was his moment of truth.

As a food connoisseur who grows his own herbs and vegetables, Shaukat registered his Mediterranean food set-up, Pickadeli, as a home chef, and later expanded through a cloud kitchen in Lahore.

“I focus only on food preparation and serving customers, because the back-end team support, staff, marketing and a hazard-free space are taken care of,” says Shaukat, who has scaled up his business by 25 percent through cloud kitchens.

Once his brand took off, Shaukat hired more staff, and is presently one of the top performing brands at the cloud kitchen he operates from.

“My team makes pizzas as they are made in Napoli and pastas as they are made in Milan,” he says. “I want to use local produce to ensure constant supply and reduce dependency on imports. Unlike most of the food industry in Pakistan, I like to share my knowledge and techniques, learnt from culinary institutes abroad, with the local chefs. I am trying to build an open culture of knowledge for all.”

Just in her 20s, Syeda Hafsa Naveed only earned 15,000 rupees per month as a chef at a local hotel, where she started her career as a chef. After two and half years, she registered with a food delivery platform as a home-based chef, despite her limited means and work space.

“I cook Chinese with a desi touch,” says Naveed. “After completing 80 plus orders and getting favourable ratings on the platform, I was given the opportunity to work in their commercial kitchen set-up on a commission basis.

“I have been able to manage my food orders better and scale up my business, which may not have been possible considering my limited space.” With her family also involved with her business, her customer base has expanded, including corporate clients.

Omar Omari, CEO Eat Food Pakistan, believes that, given the infrastructural challenges, the ever-increasing population and a switch to digitised platforms, the brick and mortar business model will soon convert to a cloud-based one.

“We started a food festival called Karachi Eat in 2014 and met foodpreneurs who were not professional chefs but who could prepare food really well,” he says. “The festival has now become a thriving platform for all associated stakeholders, and the birth place for a number of brands,” says Omari.

“When the food industry took a big hit during the pandemic, an idea for establishing an ecosystem that empowered budding foodpreneurs evolved and Eat Cloud, a cloud kitchen company, was established in 2021 with its first location in Khadda Market in Karachi.”

Currently Eat Cloud works on a hybrid model, housing its own brands as well as restaurant partners, and plans to expand aggressively.

“For the concept of cloud kitchens to grow fast, it must either take on institutional funding or operate as a conventional business that will generate cash within eight to 10 months of the kitchen opening,” says Bilal Sheikh, co-founder of Lettus Kitchens. Lettus is a cloud kitchen company that started from a 600 sq-ft space in Islamabad, later added another 1000 sq-ft, expanded to Rawalpindi in November 2021, and to Lahore this year.

The South Asian region is the largest market for cloud kitchens, although fairly new in Pakistan. The cloud kitchen trend is driven by the coming of age of millennials with disposable income, demanding digital, mobile-friendly solutions. This will only get more pronounced as the next generation, who have grown-up with smartphones, enters the marketplace.

The writer is a communication professional, an artist and a wildlife photographer.

She can be reached at moeen.hiba@gmail.com

Published in Dawn, EOS, October 9th, 2022