12 Mar 2023
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.
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.