Cloud Kitchen Market Is Estimated To Witness High Growth Owing To Emergence of Online Food Delivery Ecosystem

The cloud kitchen market is estimated to be valued at US$ 39.54 Bn in 2024 and is expected to exhibit a CAGR of 12.4% over the forecast period 2023- 2030, as highlighted in a new report published by Coherent Market Insights.

The cloud kitchen market is driven by emergence of online food aggregators and delivery platforms. Online food delivery platforms have made ordering food more convenient as customers can browse menus, select dishes, pay online and have meals delivered at their doorstep. This has increased the demand for takeaway and delivery food options. Moreover, cloud kitchens being delivery-only kitchen formats allow restaurant operators to optimize costs by cutting rental and overhead expenses associated with dine-in services. This enables cloud kitchen businesses to offer competitive prices and better profit margins.

Key Market Trends: Rise of virtual brands is a major trend seen in the cloud kitchen market. Many cloud kitchen operators are launching multiple virtual brands to cater to varied customer tastes under a single kitchen space. For instance, a cloud kitchen may house brands like an Italian brand, a Chinese brand and a dessert brand operating independently. This allows maximizing asset utilization along with targeting diverse customer segments. Furthermore, growing popularity of cloud kitchen franchising models is also seen. Several cloud kitchen operators are expanding business by licensing virtual restaurant concepts to individual franchisees through master franchising agreements. This helps scaling business operations with reduced capital requirements. Get sample copy for more information into the market.

Market Opportunities: Cloud Kitchen Market for Food Delivery – Cloud kitchens offer opportunities to expand food delivery options and profitably scale operations. Here are two key opportunities in this growing segment.

Ghost Kitchens – Ghost kitchens allow restaurants to operate delivery and takeout-only facilities without a dining area. These shared commercial kitchen spaces help restaurants lower real estate costs and focus exclusively on online orders. By 2025, ghost kitchens may account for up to 20% of commercial kitchen space globally as delivery demand continues rising. For new ventures and existing brands, ghost kitchens provide a low-risk way to test new menus, expand to new areas, or handle overflow volume without a full restaurant build-out.

Virtual Brands – Operating virtual brands is another opportunity in cloud kitchens. Virtual brands allow companies to launch and scale multiple restaurant concepts from the same kitchen. For example, a single cloud kitchen may prepare meals for multiple delivery-only brands targeting different cuisines or price points. This helps maximize kitchen capacity and profitability. Virtual brands have higher margins than traditional restaurants since they don’t require front-of-house staffing or dining space. Many food companies are using this strategy to incubate new brands and diversify their portfolios.

Key Market Takeaways: The cloud kitchen market is anticipated to witness a CAGR of 12.4% during the forecast period 2023-2030, owing to rising demand for online food delivery globally. On the basis of Type, the Independent Cloud Kitchens segment is expected to hold a dominant position, owing to low overhead costs and flexibility for operations. By Product Type, the Fast Food segment is projected to hold a major share with the increasing popularity of quick service restaurants in developed markets. Regionally, North America is expected to hold a dominant position over the forecast period, due to high smartphone and internet penetration driving the adoption of online food delivery platforms.

Key Players in the Market: Rebel Foods, Starbucks Corporation, Swiggy, Kitchen United, DD Creamery

Recent Developments in Cloud Kitchen Market: Hybrid Model Gains Traction – While cloud or delivery-only kitchens continue growing, an emerging hybrid model combining dine-in and delivery services is gaining ground. Operators are partnering with retailers and malls to set up small preview kitchens, allowing customers to both dine and place online orders for pickup. This gives brands visibility, trials new customers who may become loyal delivery clients. Players like CloudKitchens and Reef are actively working with commercial property owners to launch dozens of such hybrid outlets. The flexibility and low costs of this model makes it an attractive proposition for future growth.

Funding Galore – Investors’ enthusiasm in the nascent cloud kitchen industry shows no signs of abating. A string of large funding rounds were seen in the first half of 2023 that will fuel further innovation and market penetration. Kitchen United raised $190 million, Rebel Foods secured $125 million and FoodBoss Bank announced a $200 million fund specifically for cloud kitchen startups. Industry leader Cloud Kitchens is reportedly in talks to raise over $500 million. With new platforms exploring alternate protein options and grocery delivery as well, funding activity is likely to remain robust with more new players entering the fray. Get full coverage of the report here.