A cloud kitchen, also known as a ghost kitchen, dark kitchen, or virtual kitchen, is a type of food delivery business that operates without a physical storefront or dine-in service. Instead, it relies on various online platforms to receive orders and deliver food to customers.
Cloud kitchens are becoming more popular in the UK, especially after the COVID-19 pandemic, which forced many restaurants to close or limit their operations. A Statista report backs this, wherein the online food delivery market is said to experience an annual growth rate (CAGR 2023-2028) of 10.70%, resulting in a projected market volume of US$66.78 billion by 2028.
In this blog, you will learn everything you need to know about opening a cloud kitchen in the UK, from the benefits and challenges to the steps and tips. Read on and discover how to start and grow your own cloud kitchen business.
Benefits of opening a cloud kitchen
Opening a cloud kitchen in the UK can offer you several advantages over a traditional restaurant, including:
Lower costs
Save on rent, utilities, staff, equipment, and maintenance by operating from a compact space. Sharing your kitchen with other food businesses can allow you to split the costs.
Higher profits
Increase your profit margins by focusing on delivery orders, which have higher average order values and lower customer acquisition costs than dine-in orders. Offer multiple cuisines or brands from the same kitchen and cater to different customer segments and preferences.
More flexibility
Easily adapt to changing customer demands, market trends, and regulations by modifying your menu, pricing, and promotions. Experiment with new concepts and test them in different locations without committing to long-term leases or contracts.
More scalability
Expand your business faster and easier by opening new cloud kitchens in different areas or partnering with existing ones. Leverage the data and insights from your online platforms to optimise your operations, marketing, and customer service.
Challenges of opening a cloud kitchen
However, running a cloud kitchen in the UK also comes with some difficulties, such as:
Competition
Other cloud kitchens and traditional restaurants that deliver food are your rivals. To stand out, you should offer high-quality food, fast and reliable delivery, and excellent customer service. You should also invest in marketing and branding to attract and retain customers.
Regulation
The Food Standards Agency (FSA) and local authorities enforce the UK’s food safety and hygiene regulations. You must register your food business with your local council, get a food hygiene rating, and follow the Hazard Analysis and Critical Control Point (HACCP) system. Your food packaging and labelling must also meet the legal requirements.
Logistics
Managing the logistics of your food delivery involves finding reliable drivers, vehicles, and routes and tracking and monitoring your orders and deliveries. You may also face issues like traffic, weather, accidents, or customer complaints. You can either handle the delivery yourself or outsource it to a third-party platform, which will charge you a commission fee.
How to start a CloudKitchens® space in the UK: A step-by-step guide
If you are ready to start a cloud kitchen in the UK, here are the steps you need to follow:
1. Conduct market research
Dive into understanding your target audience, competition, and potential. Identify market gaps, customer preferences, competitive landscapes, and optimal cloud kitchen locations. Utilise online tools like Google Trends, Analytics, and My Business for valuable insights.
2. Create a business plan
Develop a comprehensive business plan that outlines achievable goals and strategies. Clearly define your value proposition, brand identity, menu, pricing, and marketing approach. Estimate costs, revenues, and profits while setting essential key performance indicators (KPIs) and milestones. Streamline the process using online templates such as those available on GOV.UK or Startups.co.uk.
3. Find a suitable kitchen space
Source a kitchen space that aligns with your requirements, budget, and regulations. Whether renting, leasing, or sharing with other food businesses, go to your trusted platform that can assist in finding suitable cloud kitchen spaces. Consider factors like size, location, equipment, facilities, and agreement terms.
4. Obtain necessary licences and permits
Ensure legal and safe operations by obtaining the necessary licences and permits for your cloud kitchen. Register your food business with the local council at least 28 days before trading and secure a food hygiene rating from the FSA. Apply for a food premises licence, a food handler’s certificate, and public liability insurance.
5. Set up your online platforms
Establish online platforms to handle orders and payments efficiently. Choose between creating your website and app or utilising third-party platforms for a pre-built system and exposure to their customer base. Ensure your online platforms are user-friendly, secure, and seamlessly integrated with your kitchen and delivery systems.
6. Hire and train your staff
Recruit and train a skilled team to operate your cloud kitchen efficiently. Hire qualified chefs, kitchen assistants, managers, and delivery drivers, providing them with the necessary training, equipment, and incentives. Manage staff schedules, payroll, and performance, ensuring adherence to health and safety standards.
7. Launch and promote your cloud kitchen
Market your cloud kitchen for customer attraction and retention. Develop a launch strategy encompassing a soft launch, grand opening, and promotional campaign. Utilise diverse marketing channels, such as social media, email, SEO, and online ads, to reach and engage your target audience. Communicate your value proposition, brand personality, and customer benefits, encouraging feedback and referrals.
Cloud Kitchens are the future of food delivery
Cloud kitchens are the future of food delivery. They offer food business owners a way to adapt to changing customer behaviour, market conditions, and industry trends and help lower costs, increase profits, and improve overall flexibility and scalability. However, opening a cloud kitchen in the UK is not a walk in the park. You have to overcome challenges and follow a step-by-step guide to start and run your cloud kitchen successfully.
If you want to open a cloud kitchen in the UK, the best place to start is by contacting Foodstars, the leading provider of cloud kitchens in the UK. We can help you rent a cloud kitchen space that suits your needs and budget, providing you with the support and guidance you need to grow your food delivery business.
Tap into the world of CloudKitchens® spaces today, and get in touch to learn more!