Cloud Kitchens Are a Sign of the Times
It’s probably not the first time you have heard of cloud kitchens. The 2019 buzzword is making a comeback again in 2020, as the dine-in plot thickens.
What are they? Cloud kitchens or ghost kitchens are centralised facilities where Food & Beverage operators can rent cooking space, thus enabling them to serve their food without investing in a brick-and-mortar presence. The concept is enticing as chefs and restaurants can lower costs by having rentable kitchen stations and have additional services such as the procurement of supplies and logistics be handled on their behalf.
Technically, this sounds ideal, since dining alongside your chums and bumping elbows with your next-table neighbour at the hottest izakaya joint in town was a mere figment just a month ago. Who needs to own a physical restaurant? Pffft. For the last few months, restaurant tables and chairs that have once been warmed by throngs of enthusiastic diners, have become obsolete—stacked against the walls or windows to make a small aisle for customers to come and collect their orders. Covid-19 has thrown the restaurant hierarchy system into a pell-mell. It doesn’t matter if you’ve donned that hard-earned World’s 50 Best Restaurants red scarf around your neck before, or placed Michelin stars at your door. In this current disquieting state that we are in, even the “Gods” are slinging burgers, hiding immaculately plated dishes in biodegradable food containers and delivering them directly to your doorstep.
Then along come these commissary kitchens, an answer fuelled by the gap in the market. The gap exploiters are strangely popular food aggregators like Swiggy, Uber and Deliveroo—each fighting for a piece of that proverbial pie. From my perspective, this makes perfect sense since these delivery platforms already have a strong customer base and enough data to know their food preferences. By locating these shared kitchen spaces in rural areas, the business model allows for easy scaling of operations and expansion into new geographies. Furthermore, you won’t have to settle for cold food coming out of the CBD anymore.
Are cloud kitchens the future of dining then? The controversy on this question has been long-drawn, and at times, morose and gloomy, because it may spell doomsday for many of my favourite restaurants.
Haters have coined cloud kitchens as “the WeWork of restaurant kitchens,” referencing the start-up’s imminent failure because of its fatally flawed business model. It’s not just the tenant, it’s the landlord. Similarly, cloud kitchens bankroll quick-serve brands, some of which have little to nothing nutritional value in favour of their smooth deliveries. The result is a severely skewered economics of food delivery where the prices are highly alluring to consumers who are looking for a quick fix at home. And as they place their orders via Deliveroo or Uber, some of them are oblivious to the fact that a concrete restaurant is not in existence. The immense profit margins enjoyed by the savvy entrepreneurs all boils down to expenses: marketing versus rent, furniture, the new coat of paint in the restaurant or even that crackerjack of a sommelier who uprooted from California to work for you.
Even in Singapore, GrabFood has pivoted to this shareable market—launching its first cloud kitchen facility in Lam Soon Industrial Building along Hillview Avenue that houses ten merchants including Thai Dynasty and several bubble tea makers. This is one of the many in Indonesia, Thailand, Vietnam and the Philippines that the ride-hailing, food delivery company is looking to finance in the upcoming months.
The real question is, will existing restaurants ditch their brick-and-mortar in favour of such a no-frills set-up? Michelin-starred chef and restaurateur Beppe de Vito of Braci, Art and Amò doesn’t believe in choosing one over the other. And, in fact, has just launched Grammi—a cloud kitchen concept that focuses on comforting Italian-Mediterranean food. Part of this ballsy move can be attributed to the shift in the dining landscape and consumers’ needs. He says, “Although restaurants will reopen in phase two, more and more people will dine al desko or order family meals, so there is an obvious need for affordable food for the masses.”
I applaud his willingness to embrace change, but simultaneously the heart mourns the diminishing prospects of dining out. A hardened restaurateur could enter the game now, build a following of spoilt takeaway customers and justify inflated menu prices as compared to the peanuts one pays for a triple combo bak chor mee for under $10. Cloud kitchens score one for the big guys, but just as we’ve witnessed supermarkets kill bodegas, fishmongers, butcheries in the past, history is repeating itself. This time, small independent restaurants are on the chopping block. So unless there is community cohesion (from hiring local to buying local produce) or other measures implemented, the dangers of monopoly lurk around the corner. This is an issue not to be overlooked.