Investors see beyond silver service.
A great restaurant used to require a venue and a team of staff to showcase their skills. Now, they don’t even need a kitchen. Instead of costly waiters, orders come through apps, instead of expensive real estate, customers dine in the comfort of their homes, and instead of owning their kitchens and chefs, they simply connect with them online. Providing the food meets customer expectations, a restaurant’s success will depend less on the eating experience and more on efficient delivery.
Cloud kitchen Dahmakan, based in Kuala Lumpur with multiple ‘satellite’ kitchens across Malaysia, recently attracted $5m in funding from US and Chinese investors, and is eyeing expansion across Singapore and Indonesia, having already bought out Thai competitor Polpa. The secret to its success, says Dahmakan’s CEO Jonathan Weins, is an efficient operating system that “drastically reduces the traditionally high-cost structure of food delivery”, offering lower costs to consumers and higher profit margins.
The market is growing, and competition is rising across the region. Malaysia’s EatFun, which focuses on home-cooked food, was recently backed by a Singapore-based angel investor. Meanwhile, Thailand-based Singha Ventures led a $10m investment in the Singapore-based cloud kitchen, Grain.
Besides efficiency, how will these kitchens differentiate themselves? Appealing to customers’ interests and values is one emerging tactic. FoodCloud in India stands out for its emphasis on empowering home-based cooks, and particularly women. Most of its chefs are stay-at-home mums, but a 91-year-old Gujurati grandmother is building a fan base in South Delhi. Grain, on the other hand, has its own chefs, menu, and delivery team, and emphasizes quality sourcing for nutritious food.
Fast food, without the health risks?
How will the rise of cloud kitchens affect the region’s nutritional trends? Fast food is often recognized as a culprit in the global obesity epidemic. Will the rise of home-to-home delivery enable speed and convenience without the high salt and sugar levels of processed food?
The integration of cloud kitchens with nutritional goals and even self-monitoring health apps could be the future. Nosh, a Hong Kong-based portfolio business in the Alibaba Entrepreneur Fund, offers calorie-controlled, balanced and even plant-based diets, with the option to have all three daily meals delivered to meet your health goals. It’s no great leap to imagine these meals tailored not just to your stated goals, but to your daily blood sugar levels, exercise routine, water intake, and so on. And portion control could become a concern of the past, particularly if health insurers catch on to the potential to minimize risks by mandating smart diet subscriptions.
This article was originally published on MIT Insights