Cloud Kitchens Put a Fresh Spin on Delivery

The world of food delivery options has expanded far beyond pizza. The advent of food delivery apps like GrubHub and DoorDash have allowed for all types of cuisine to be brought to the doors of consumers with the tap of a button. These apps have experienced wild success by employing a fleet of drivers to deliver food prepared by existing restaurants. It seems like a dream for homebound consumers, but it’s not without its own set of challenges. Some prepared foods are meant to be served immediately. The quality of a dish can diminish significantly in the 15 to 20 minutes of travel between a restaurant and the home of the individual who ordered it. This has led to frustration with restaurants lack of ability to provide high quality food options outside of their space. Restaurants are under pressure from the high delivery demand, too. In addition to serving their normal customer base in house, staff must also fulfill delivery orders. While it brings convenience to the consumers, restaurants struggle to keep up. One solution to the delivery problem comes in the form of virtual, or “cloud” kitchens. These spaces exist only to prepare food for delivery - they do not offer brick and mortar locations for consumers to visit. The benefits to this business model are immense. Firstly, existing restaurants have the opportunity to provide delivery food without putting strain on their physical locations. Costs are lowered by only renting kitchen space and no need to employ front of house staff. Additionally, it allows for experimentation with little risk involved. Companies can devote time to preparing foods that will retain their quality in the time it takes to be delivered. There is also the opportunity to offer meal prep options. This concept is already proving to be successful. Keatz, a group of restaurants designed specifically for delivery, just raised $13M to build even more virtual restaurants across Europe. The British delivery service Deliveroo opened a takeout and delivery only food hall in Hong Kong last year. This food market allows consumers to order dishes from any of its five restaurants. Ando, David Chang’s food delivery startup, experienced so much success that it was acquired by UberEats. This is one of many delivery only services that have been acquired or shut down, including Maple which is now owned by Deliveroo.

While Keatz and Deliveroo are experiencing success in Europe right now, the majority of delivery service demand falls onto companies based in the US. In 2018, the leading food delivery services were GrubHub, DoorDash, UberEats and PostMates (EMarketer). UberEats has set its sights on expansion across the US, as well as globally. As the company continues to acquire more delivery kitchens, it's likely that they'll be the company we will see rolling out this concept on a large scale in the States. However, a number of independent delivery only kitchens are expanding on their own. Clustertruck offers a huge menu with a wide variety of cuisines, and relies on couriers to deliver the dishes quickly. Though born in Indianapolis (and sourcing some ingredients from farms in Indiana), the company has additional locations in Cleveland, Columbus, Kansas City and Denver.The demand for delivery meals is higher than ever. While consumers are more than willing to pay hefty delivery fees for the convenience of prepared food being brought to their doors, restaurants often suffer under the strain and fall short in numerous ways. Cloud kitchens can provide diverse and delicious food options that cater to the convenience consumers desire. Foods are cooked and packaged specifically to retain quality, and are delivered quickly by companies with the infrastructure to do it. All of this is a precursor for food delivery ultimately taking to the sky via drone, but for now it remains the newest and most exciting innovation in fulfilling consumer food delivery demands.