The shrinking appetite for India’s cloud kitchens


Sanghamitra Kar

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Sanghamitra Kar

2 reads

India’s cloud kitchen story is on shaky ground. Once forecast to be a $2 billion industry by 2024, a combination of high platform commissions and shifting consumer preferences has plunged the cloud kitchen space into an existential crisis.

March 13, 2023


When Biraja Rout received the news that Mukunda Foods was shuttering its cloud kitchen business, Nucleus Kitchens, he was nonplussed. Biggies Burger, Rout’s burger brand, had just one outlet at a Nucleus facility, meaning the impact on his brand would be minimal.

Indeed, the news simply served to reinforce a belief that Rout had held for a while now. While cloud kitchens may have been a godsend during Covid times—when restaurants were shuttered and almost entirely dependent on delivery platforms to survive—they have lost their sheen in a post-Covid world.

“Footfalls in our outlets have increased almost 20%. Earlier, 40% of my revenue was from online orders. This has dropped to 26-27%,” Rout tells The CapTable. This comes on the back of many cloud kitchen restaurants saying that order volumes from Zomato and Swiggy—which they were heavily dependent on—have dropped 20-30% in recent months.

Rout says that Biggies Burger is now focused on offline expansion, with plans to open around 100 outlets across the country by the end of 2023. As for cloud kitchens, Rout says they’re now just a tool to test a market and understand its risks.

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