October 25, 2021

How Different F&B Businesses Leverage Cloud Kitchens

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Cloud kitchens have been gaining significant traction in Malaysia in recent years with many different types of F&B businesses trying to leverage cloud kitchens, especially as industry shifts caused by the COVID pandemic have forced F&B operators to re-think how to operate and stay in business.

The most attractive benefits of cloud kitchens are their cost efficiency and the low-risk, high-reward solution they provide as dine-in orders struggle. They also allow F&B restaurant owners the opportunity to reap the benefits of the food delivery boom. But it’s important to keep in mind that cloud kitchens aren’t a one-size-fits-all solution and that there are many different varieties suited for different types of restaurants. 

It’s best to think of cloud kitchens as the bare bones of fully functioning, streamlined kitchen spaces that operate only to provide food for paying customers. They don’t have a storefront or dine-in space and operate by partnering with major third-party food delivery services—like FoodPanda, GrabFood and BeepIt — to fulfil orders. 

Due to the nature of the business model, cloud kitchen owners can minimise costs by renting a space in more economical areas of town, working with smaller teams, and focusing on the most efficient food preparation methods possible without compromising quality.

Cloud kitchen operators in Malaysia, like KitchenConnect, offer a variety of turnkey kitchen space options that come equipped with the latest in F&B industry technology needs, growth and marketing support, and more. 

If you don’t know which model is the right fit for your brand, you just need to conduct some basic research. To help get you started, here we’ve outlined the main types of cloud kitchen spaces and the types and brands we’ve worked with within this space.

Local entrepreneur/startup

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Our cloud kitchen spaces are the ideal solution for startups and small businesses. When entrepreneurs have less stress due to lower upfront costs and minimal operational investment, they have the flexibility to experiment and start testing the best business strategies at minimal upfront cost and a faster pace.

A cloud kitchen owner can get up and running with as little as MYR$39K, which is meagre compared to the average MYR$750K investment it takes to start a traditional restaurant. Scaling up is therefore much quicker with cloud kitchens, as most break even after just six weeks versus the average of 48 weeks it takes with dine-in establishments.

Notable startups and local brands that leverage cloud kitchens in Malaysia include Dhaba 15, Fowlboys, Indian Empire, Christian Tan, and Ryusei Dining.

Home-based cooking/baking

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Our cloud kitchens also offer business solutions to home-based cooking and baking food brands, which must deal with a whole different set of criteria. Home-based food businesses have a slew of food safety regulations they must adhere to, even more so after COVID. 

Besides needing contactless delivery, cashless payment and collection only by appointment, home-based food business owners can’t load or unload goods via a delivery vehicle, and can’t recruit paid staff, among other challenges.

The benefits of cloud kitchens for this category of businesses are that our spaces offer to streamline processes and serve as a launchpad for a full-scale F&B business. This is a huge help to brands looking to get a start without figuring out all of the logistics on their own.

National chains

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The greatest advantage that cloud kitchens offer national chains is the ability to expand into new locations quickly and at a low cost. In a traditional restaurant business model, expansion into new Malaysian neighbourhoods requires a significant upfront investment and taking on a high level of risk—regardless of how many locations a food business has. 

As our cloud kitchen spaces are located in highly populated areas with an active customer base, national chains can benefit from low-risk, affordable expansion into new territories.

Regional and international chains

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The benefits of low-cost and rapid expansion into new markets that cloud kitchens provide extend to regional and international food chains. Our Kitchen Connect team handles all of the labour-intensive and expensive logistics, like permitting and installation so that a regional or international food brand team can start operating their food delivery business in a ready-to-go kitchen. 

As more dine-in restaurants close or restructure under COVID restrictions, this turnkey solution becomes even more beneficial. Popular food brand, Sugar Bun, is an example of a chain that has leveraged cloud kitchens to enter the Malaysian food delivery market successfully.

Cold/dessert brands

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Another type of business that uses cloud kitchens is cold and dessert brands, which have yet another set of needs. For these F&B brands, cloud kitchens can serve as a storage location and a means to access customers in a larger market. Using this approach, brands pay less and grow their virtual brand awareness while gaining a larger market share via food delivery options.

KIV kitchen

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KIV (keep in view) kitchens can leverage our cloud kitchens as storage for food. Because our kitchen spaces come equipped with all necessary storage equipment and food licenses, KIV businesses enjoy a hassle-free food storage solution. All of the stored dishes or ingredients can be transported instantly when needed while the KitchenPlus team handles all of the maintenance logistics like insurance, cleaning, and more. 

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Are you interested in renting your own cloud kitchen in Malaysia? Fill out the form below to get in contact with our team of experts today! We’ll be happy to answer all of your questions and assist you every step of the way.


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