Future Of Restaurant Industry: Cloud Kitchen Vs Dine-In Restaurants

 There has been quite some buzz around the future of the restaurant industry. The pandemic has changed the food industry’s approach and is influencing them to revamp the definition of new normal.

Speaking of trends, Cloud Kitchens has been the roaring highlight. It is pretty hard to ignore the revolutionary impact they have made on the restaurant industry.

But the real question that arises now is whether they can compete with the conventional Dine-in experience?

But before diving into that let's understand what are Cloud Kitchens & Dine-in Restaurants?

Cloud Kitchens, also known as ghost kitchens, are a delivery-only restaurant business model. They do not offer a dine-in option and cater to their customers solely through online delivery. Cloud Kitchens infrastructure basically includes a kitchen set-up and tie up with food delivery applications.

On the Other hand, Dine-In Restaurants are traditional brick and mortar outlets which allow customers to visit the restaurant and enjoy their food by leveraging aesthetic ambience, prompt service and option to explore new cuisines & food outlets.

Now, coming to the heat of the battle,

Difference Between Cloud Kitchen and Dine-In Restaurants:

1. Location

Location is one of the prime differentiating factors between the two models. For a dine-in restaurant, the location serves as an integral part of the success of the restaurant. A restaurant owner needs to make sure that he has set up his restaurant at a strategic location that is easily accessible to their customers.

Whereas, for a cloud kitchen the location will barely matter since it is concerned only with the food delivery and not the customer’s convenience.

2. Investment Cost

Another differentiating factor between the two is their investment cost. As a whole, the investment required for setting up a cloud kitchen is comparatively lower. The cloud kitchen can be set up anywhere as it only requires a cooking space, essential kitchen equipment and ties up with food delivery services.

Whereas, the dine-in restaurant requires great interior, furniture set-up, kitchen setup, service staff, dining space, cleaning and sanitary facilities.

3. Size and Interior

Dine-in restaurants are required to create a whole customer experience by setting up a decent seating space with at least 10-15 tables along with a kitchen.

On the other hand, cloud kitchens do not need to focus on the interiors at all. If they have adhered to all the safety norms then cloud kitchens require minimal space for setting up the kitchen and that’s all!

4. Staff Expenditure

Next, is the cost of hiring waiting staff. Again, cloud kitchens are quite effective in this matter as they do not require any waiting staff.

With dine-in restaurants, the cost of hiring staff can be heavy. Additionally, you may be required to give them training and other work-related perquisites, which further increases the owner’s expenditure...

5. Set-Up Time

Building and designing a dine-in restaurant could take you several months, if not years. To make sure that the ambience is aesthetically pleasing, the restaurant is spacious and well-lit, the seating arrangement is comfortable and easy to maneuver for the server and many more tedious decisions are to be made before your dine-in space is ready.

For cloud kitchens, you need the appropriate licenses and just a quick kitchen set-up. There is barely any time spent in choosing a location or designing the interiors. All you have to do is to focus on the quality of the food and the cleanliness of the kitchen.

6. Marketing Costs

For cloud kitchens, a strong Restaurant marketing strategy is essential. Since they operate only virtually, owners of cloud kitchens must resort to social media marketing to reach out to a wider audience and create a positive customer experience.

Given today’s scenario, marketing costs for a dine-in restaurant are also considerably high. But a distinguished advantage that the dine-ins have over their counterpart is the outdoor branding in their neighbourhood as well as the word-of-mouth marketing by their diners.

So, back to the Question,

WHICH IS BETTER?

Category	Cloud Kitchen	Dine-In Restaurant
Importance of Location
Lower Investment Cost
Lower Set Up Costs
Lower Staff Expenditure
Lesser Set UpTime

The above points highlight how and why Cloud Kitchens are gaining immense popularity for their added benefits as well as profitability.

With the help of the right assistance and seamless integrations provided by an efficient POS system, Cloud Kitchens are proving to be one of the most beneficial F&B business models. It is safe to say that Cloud Kitchens are vital to success in the post-COVID restaurant industry and are at-par with the experience offered by dine-in restaurants, in terms of food quality and services.