Why you should convert your restaurant into a micro cloud kitchen - and how?

Just a few years ago, "cloud" was used as a compliment for an airy omelette or mashed potatoes. Cooks at home were trying to whisk the eggs faster to capture more air in the mix. Now, cloud is used to describe a whole new restaurant model - and almost no one is trying to cook anything at home any more.

This new model is referred to as a ‘Micro Cloud Kitchen’. As online ordering increases and food deliveries see a boost like never before, micro cloud kitchens allow restaurants to leverage their existing resources such as equipment, supply chain and staff, to create additional delivery-only virtual brands and expand their offering.

SO WHAT ARE MICRO CLOUD KITCHENS AND WHY SHOULD YOU CONVERT YOUR EXISTING RESTAURANT INTO SOMETHING YOU HAVE NEVER EVEN HEARD OF?

MICRO CLOUD KITCHENS

With the ease of technology and a variety of food delivery options, online ordering had already begun to see an increase. Especially after recent events, a lot of people stopped going to restaurants because of the virus threat or the various lockdowns and curfews. The dining out tradition of centuries has almost come to a halt in the last year. However, the need to indulge oneself is still there. People still very much need to enjoy a delicious dinner and the convenience of a piping hot meal is still unparalleled.

Thus, food delivery is rapidly boosting and it’s in higher demand than ever before. This change forced many restaurants to shift their models from dine-in focused to delivery-only or at least delivery-centric, and paved the way for the establishment of micro cloud kitchens.

Micro cloud kitchens are the ideal way for restaurant owners to maximize revenue using sources they already have by adding delivery-only virtual brands to their existing brick and mortar restaurants. For example, if you are running a burger joint, you could easily leverage the same ingredients and know-how to create a sandwich brand targeting a different customer segment or different hours of the day. Taking this step adds a new revenue stream to your restaurant while allowing you to test new cuisines or ideas with minimal risk.

Your new delivery-only brands could serve similar menu items to what you are currently offering, or you could take this chance to completely reinvent yourself. The choice is yours.

KEY BENEFITS OF CONVERTING YOUR EXISTING RESTAURANT INTO A MICRO CLOUD KITCHEN

● TRY OUT NEW BRANDS AND/OR CUISINES TO REACH NEW CUSTOMERS (OR EVEN EXISTING ONES)

There might be potential customers who love your quality and approach… just not the cuisine you offer. When you make a change and add a new brand or cuisine to your offering, you might reach a whole new audience with your existing restaurant.
Another benefit of this is that we, as people, can get bored pretty quick. Even your most loyal customers will eventually want to try something different. Adding a new brand or cuisine to your existing restaurant will allow you to save yourself in this case! Your customers will be happy, and so will you.

● EASILY AND COST EFFECTIVELY TEST NEW MENU ITEMS

A new recipe might have been on your mind for a while or maybe some of your customers have been asking for certain additions to your menu. Now is the perfect time to test those ideas in a low-risk and cost effective way and see how well they do!

Maybe office staff no longer come to you for an afternoon coffee. Now you can focus this time to create a dessert or snack menu for your restaurant to ideally utilize your resources and maximize your output. For example, add cardamom buns to your offerings; and those same people who used to come to you for an afternoon pick-me-up can boost their morale from the comfort of their homes.

● GIVE THE SAME STAFF NEW RESPONSIBILITIES

Converting your restaurant to a micro cloud kitchen will allow you to better utilize your existing kitchen and restaurant staff, especially during what could be considered down time. This is particularly relevant if you are running a dine-in restaurant and have seen a drop in business.

● REDUCE FOOD WASTE

Your new food endeavor will most likely use some of the same ingredients. This will allow you to reduce food waste and make the most of your inventory.

● LEVERAGE YOUR EXISTING SYSTEMS

In addition to food ingredients, you will have the advantage of using your existing storage, supply chain and kitchen space for extra income and revenue.

HOW CAN YOU CONVERT YOUR RESTAURANT INTO A MICRO CLOUD KITCHEN?

So you have made the decision to come out on the other side of this pandemic as a winner - congratulations!

Every restaurant is unique and every food entrepreneur is different. While there isn’t one single answer to offer a solution on how *you* should convert your brick and mortar restaurant into a micro cloud kitchen, we do have some recommendations. If you would like to discuss this further we would also be happy to jump on a discovery call to walk you through your options.

• Take inventory of existing kitchen equipment and ingredients.
  This will allow you to assess what you have and how you can use these without unnecessarily spending any additional money.

• Decide whether you want to serve your existing customers or acquire new clientele.
  One does not have to mean you cannot do the other. However, understanding your target customer base and their needs will give you crucial information at this stage of your business.
  Review your sales data by items and location. If you have more than one restaurant, you may decide to create separate virtual brands for different locations.
• Build a specialized brand for the cuisines that will drive online traffic in your region and/or city. People tend to order from specialized restaurants; if you want to order sushi, you would probably be more comfortable ordering it from a restaurant that specializes in sushi, not a restaurant that prepares everything from Italian spaghettis to fried chicken wings.
  
  Consult the data and listen to your customers to choose your cuisine carefully and try to catch even the most niche audience as well as you can.
• Come up with a simple and basic menu based on your findings above.
  Since this is going to be a delivery-only brand, your focus should be production simplicity and suitability for delivery. Your objective should be to test the menu and update if needed; as quickly as possible.
• Create an appealing identity for all of your virtual brands.
  Make it interesting and easy to identify. Everyone is ordering in and receiving similar looking packages. An appealing identity will make you stand out from the competition and be top of mind the next time your customers or their friends are thinking about ordering takeout. If you believe you have strong brand equity for your brick-and-mortar store, make it known to your customers that the brand is connected, it will likely help increase your virtual brands’ credibility.
• Be prepared technologically.
  Your existing tech capabilities may not be able to accommodate the addition of a virtual brand. In order to make sure you serve your customers the best way that you can, make your preparations in advance. Put systems in place such as centralized menu management capabilities, automated order ingestion and a multi-brand Kitchen Management System, to help your staff easily cope with the additional demand that will be in your kitchen.

• To ensure your customers actually find you, work with food aggregators.
  This will ensure your brand is listed; a crucial step for the search & discovery process. Until you build brand awareness and recognition, your best strategy would be to try your best to rank better on Talabat, Careem Now and all other food aggregators.
• Set up your own direct online ordering channel, embedded with automated access to third party logistics (3PL) providers.
  The more ways customers can reach you to order their favorite foods, the better. It is very important to be associated with the existing online ordering systems, but you should always have your own channels as well. If you currently do not have a delivery system in place, having access to 3PL providers will expand your delivery capabilities by delivering food to your customers on your behalf. This is the best way to reach a wider audience without having to hire drivers yourself.
• Marketing, marketing, marketing…
  Even if you build the most mouth-watering virtual brand as an addition to your restaurant, it will not matter if people do not know about it. Create a marketing strategy at first to build awareness around your new brand, and then to build customer retention. This could be as easy as sending free dessert to those who order food, including a sweet personalized note, or even sending your promotional magnets or leaflets so they can see what else you offer.

KEEP FOLLOWING GRUBTECH FOR HELPFUL TIPS AND THE LATEST INDUSTRY NEWS. GET IN TOUCH IF YOU NEED TO SCALE YOUR BUSINESS AND OPTIMIZE YOUR DELIVERY-ONLY FOOD CONCEPT.

LET’S START!

Tag(s): Featured , Virtual Brands , Online Food Delivery , Micro Cloud Kitchen

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