Report Overview

An increasingly high demand from online food delivery apps and rising disposable income of consumers are projected to propel the expansion of the India cloud kitchen market during the forecast period between 2023 and 2029.

India Cloud Kitchen Market - Industry Trends & Forecast Report, 2029

India cloud kitchen market size was estimated at USD 800 million in 2022. During the forecast period between 2023 and 2029, the size of India cloud kitchen market is projected to grow at a CAGR of 23.8% reaching a value of USD 2,880 million by 2029. Major growth drivers for the India cloud kitchen market include the increasing demand for online food and grocery delivery services, fostering a surge in startups supported by substantial investor backing. Transforming to enhance customer service, the industry embraces quick commerce to expedite delivery times. Cloud kitchens present an enticing alternative to traditional dine-in restaurants, offering lower initial investments, reduced operating costs, and enhanced expansion opportunities, as outlined in a recent report. Concurrently, the industry undergoes disruption as specialized service providers introduce diverse infrastructure and support services, fostering innovative business models. Key trends involve technology integration, automation, and a 'House of Brands' model, offering diverse cuisines and subscription plans, supported by substantial funding activity and increased demand from tier 2–4 cities. Quick Service Restaurants (QSRs) further extend into cloud kitchens, marking a dynamic evolution in the industry.

Cloud Kitchen – Overview

A cloud kitchen, also known as a virtual, ghost, or dark kitchen, operates solely for delivery without a physical dining or takeout area. These kitchens, which receive orders through restaurant apps or food aggregator platforms, represent a significant trend in the food industry. In Delhi alone, there are over 20,000 active cloud kitchens, with an annual growth rate exceeding 20%. This model, exemplified by popular names like Faasos by Rebel Foods, Hoi Foods, and Biryani By Kilo, offers efficient food production, supporting numerous direct and indirect jobs. The rise of cloud kitchens is transforming the traditional restaurant landscape, focusing on online orders and delivery services.

India Cloud Kitchen Market

Growth Drivers

High Disposable Income

The upsurge in the establishment of cloud kitchens can be attributed to various critical factors, prominently including the escalation in disposable income. Over the preceding 5-7 years, the escalating demand for online food delivery has been a catalyst for profound changes in the food tech industry. A notable consequence has been the proliferation of startups within the cloud kitchen domain, buoyed by substantial investments from stakeholders. In this dynamic landscape, the simplicity of placing orders through dedicated restaurant apps or food aggregator platforms has become synonymous with the concept of "cloud kitchen." This dynamic market, epitomized by the presence of over 20,000 active cloud kitchens in Delhi alone, represents an innovative response to evolving consumer preferences, offering a diverse range of cuisines with heightened efficiency.

Restraints

High Reliance on Delivery Platforms

The India cloud kitchen market faces growth constraints due to its heavy dependence on delivery platforms. While these platforms facilitate broader reach and accessibility, they also pose challenges. Cloud kitchens relying extensively on these platforms may encounter increased competition, rising commission fees, and limited control over customer interactions. This reliance restricts market growth as businesses navigate the delicate balance between leveraging delivery services and mitigating associated challenges, impacting overall operational autonomy and profitability in the dynamic landscape of the cloud kitchen industry.

Impact of COVID-19 on India Cloud Kitchen Market

COVID-19 pandemic had a mixed impact on the India cloud kitchen market. With lockdowns and restrictions altering consumer behavior, there has been an accelerated shift toward online food delivery. Cloud kitchens, leveraging their delivery-centric model, witnessed increased demand, reflecting a resilience in the face of the crisis. The emphasis on contactless transactions and home dining further fueled this trend. However, challenges such as supply chain disruptions and workforce limitations impacted operations. As the market navigates post-pandemic recovery, the experience underscores both the adaptability of cloud kitchens and the need for strategic resilience in responding to unforeseen disruptions in the food industry landscape.

India Cloud Kitchen Market

Segmental Coverage

India Cloud Kitchen Market – By Nature

By nature, the India cloud kitchen market is bifurcated into Franchised and Standalone segments. The franchised segment holds a higher share in the India cloud kitchen market by nature. This model involves multiple kitchens operating under a single parent company, sharing a common kitchen space. Each kitchen offers distinct cuisines, ensuring a varied customer base. This approach minimizes operational expenses and capitalizes on brand diversification. The franchised cloud kitchen model, with its efficiency and centralized management, appeals to investors and entrepreneurs seeking a streamlined approach to culinary ventures. Its success is marked by a synergistic blend of diverse offerings under one roof, meeting the evolving demands of a dynamic and diverse market.

India Cloud Kitchen Market – By Type

By type, the India cloud kitchen market is divided into Independent Cloud Kitchen, Commissary/Shared Kitchen, and Kitchen Pods segments. The independent cloud kitchen segment holds the highest share in the India cloud kitchen by type. This model involves standalone kitchens without a dining area, owned or rented by a single brand. Specializing in a single cuisine, these kitchens leverage various food distributors and delivery services. Their autonomy allows for focused brand identity and operational control. The independent cloud kitchen's appeal lies in its lower initial investment, reduced day-to-day operating costs, and flexibility for expansion. This segment underscores the industry's preference for streamlined, efficient, and independent kitchen operations, aligning with the evolving dynamics of consumer preferences and the demand for diverse culinary experiences.

India Cloud Kitchen Market – By Product

Based on product, the India cloud kitchen market is divided into Burger/Sandwich, Pizza, Pasta, Chicken, Seafood, and Mexican/Asian Food segments. The burger/sandwich segment holds the highest share in the India cloud kitchen market by product. The dominance reflects the popularity of these quick and versatile offerings, appealing to a broad consumer base. Cloud kitchens specializing in burgers and sandwiches benefit from the convenience of online ordering, aligning with the fast-paced lifestyle. The widespread acceptance of these iconic food items, coupled with efficient delivery mechanisms, contributes to their market prominence. With a focus on quality and variety, cloud kitchens in the burger/sandwich segment successfully capture consumer preferences, making it a thriving and integral component of the diverse and dynamic Indian cloud kitchen landscape.

India Cloud Kitchen Market – By Region

Regionally, the India cloud kitchen market is segmented as North India, South India, East India, and West India.

Competitive Landscape

Major players operating in the India cloud kitchen market include Biryani By Kilo, Masalabox, Kitchen United, Kitopi, KEATZ, Rebel Foods, and Zuul Kitchens. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In October 2023 - Cloud kitchen startup Curefoods acquired foodtech startup Yumlane, integrating its proprietary pizza technology. Established in 2016, Yumlane developed a unique technology stack for pizzas and introduced its cloud kitchen brand, Yumlane Pizza, alongside a B2B business. Curefoods, with a presence in 15 Indian cities, boasts prominent clients like Curefoods, Barbeque Nation, Frozen Bottle, and 7-11. This acquisition strategically aligns with Curefoods' earlier moves, securing Yumlane Pizza's cloud kitchen franchise rights for South India in 2021 and acquiring a 10% stake in 2022, underscoring the company's commitment to expanding its influence in the dynamic foodtech sector.

• In September 2023 - Sodexo India initiated its foray into the cloud kitchen domain, launching its first tech-enabled off-site kitchen in Hyderabad. With plans for additional kitchens in Bengaluru, Pune, and NCR, the company targets clients in ed-tech, pharma, and BFSI sectors. Equipped to produce 25,000 meals daily, the kitchen aims to cater to varied work shift timings through temperature-controlled vehicle deliveries.

• In June 2023 - Salad Days, the delivery-only food chain, expanded its presence in Bengaluru, India, inaugurating three new cloud kitchens as part of a broader growth initiative.

• In April 2023 - SetGo Kitchens & Consulting, a major player in the F&B industry, aims to guide F&B companies and entrepreneurs in establishing profitable cloud kitchen businesses. SetGo provides end-to-end solutions, including cloud kitchen hubs and Kitchen as a Service (KasS), streamlining growth for brands.

Scope of the Report

By Nature

• Franchised

• Standalone

By Type

• Independent Cloud Kitchen

• Commissary/Shared Kitchen

• Kitchen Pods

By Product

• Burger/Sandwich

• Pizza

• Pasta

• Chicken

• Seafood

• Mexican/Asian Food

By Region

• North India

• South India

• East India

• West India