Cloud kitchens, popularly known as dark kitchens, delivery only restaurants, virtual restaurants, or ghost kitchens, are revolutionising the restaurant industry as it is opening up new opportunities for restaurant operators. Cloud kitchen, a popular concept in the landscapes of India and Singapore, is now spreading to other parts of the world and is gaining popularity in Saudi Arabia as well. Due to the extensive growth of online food delivery services, many businesses launched delivery apps which ease the process of doorstep delivery, connecting fast food chains, restaurants, cafes, etc. Many Saudi restaurants are now connected via one or more delivery platforms and this provides a platform for the Saudi restaurants to enter the revolutionary concept of cloud kitchen in Saudi Arabia.
The emergence of cloud kitchens is transforming the food industry sector in Saudi Arabia. It goes in alignment with the digital transformation plan of Saudi Arabia. Thus offering numerous opportunities for the new businesses entering the country. Cloud kitchen business in Saudi Arabia opens new doors of business setup in the kingdom of Saudi Arabia, thus adding to the existing business options for foreigners in the country. The cloud kitchen business in Saudi Arabia benefits the economic transformation of the country and helps it to explore technological, economic and consumer trends prevalent in the industry which is taking the industry forward, opening its potential to reshape the culinary landscape of the Kingdom.
Curious to know more about the cloud kitchen business in Saudi Arabia and how it will benefit the Saudi food sector?
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What is a Cloud Kitchen?
Cloud kitchen is a virtual restaurant that doesn’t offer dine in option and operates from a commercial kitchen which is designed exclusively for the preparation of meals for delivery or takeaway. These types of virtual restaurants offer a cost effective way to grow the food business or launch a virtual brand. It provides a platform to try out new opportunities in the businesses, experiment with new concepts, enter new markets, etc. It provides a testing ground for restaurants to make use of their staff and give a platform for their innovations.
There are different models of cloud kitchens businesses in Saudi Arabia, catering to various goals and operational needs.
Shared Space Model:
Shared space model is a cost effective way of running online food delivery services in Saudi Arabia, by preparing dine at home meals in a kitchen owned by another party. Here the restaurant operators use their own staff and ingredients to prepare the food. It reduces the cost of running a traditional restaurant as it gives the restaurant operators the privilege to share the kitchen space with other businesses.
Dedicated Space Model:
In the dedicated space model, the restaurant operator opts to rent or buy a kitchen which would be used exclusively for their own purpose, rather than sharing it with other brands. This gives the restaurant brand the privilege to explore various concepts in one location without the influence or involvement of other brands.
Cloud Kitchen Market in Saudi Arabia - An Overview
Saudi Arabia has a great future in cloud kitchens due to the accelerated growth of its food sector and forthcoming international events to be hosted in the country, driving more tourists and growth opportunities. As the global delivery industry is expected to hit $ 154 billion by next year, the demand for online food delivery services is expected to rise high in the coming years.
The cloud kitchen market in Saudi Arabia, which has a value of $157.0 million in 2020, is expected to reach $335.7 million by 2030, a growth of CAGR of 7.7% in 10 years from 2021 to 2030. The cloud kitchen market is differentiated to various types like independent kitchens, kitchen pods, commissary/shared kitchens and different food categories like pizza or pasta, burgers or sandwiches, seafood, Mexican or Asian foods, etc. Also there is differentiation on the basis of nature like the franchised and standalone operation.
| Differentiation of Market | Details |
| Type of Kitchen | Shared or Commissionary Cloud kitchen Kitchen Pods Independent cloud kitchen |
| Nature of Kitchen | Standalone Franchised |
| Type of Foods Served | Pizza Pasta Chichen Burgers Chicken items Mexican or Asian foods Sandwich Others |
Advantages of Setting Up a Cloud Kitchen in Saudi Arabia
Virtual or online business ease the launch and running of business in a more cost effective manner. It helps the online business operator to reduce the cost of equipment and legal paperworks, which ease the process of setting up a cloud kitchen in Saudi Arabia and sell them immediately without much delay. It also helps the business owner to pilot a product before making significant investment in a physical restaurant or food truck. The advantages of cloud kitchens are listed below:
1. Ease of flexibility in menu
Working online provides the flexibility to make adjustments in the menu, in response to changes in the price and availability of ingredients, without making physical changes in the printed menus, thus reducing cost.
2. Less Financial Burden
Cloud kitchens help the restaurant operator to cut costs of operating in many ways compared to traditional documents, such as dinnerware, decor, signage, staff, servers, hosts, etc.
3. Platform for Experimentation
Ghost kitchens provide a platform to try out new food concepts, and gives the flexibility to discontinue the idea if it doesn’t resonate with the concepts of your businesses, with less financial loss.
4. Efficiency in Operations
A cloud kitchen helps the restaurant operator to run multiple brands from a single kitchen, easing the batching of ingredients across multiple menus, thus enhancing the efficiency and streamlining the entire operations.
5. Provides Insights to Customer Behaviour
As cloud kitchen operates digitally, it helps the food business to directly interact with the customers throughout the entire journey, from discovery of the food to the fulfilment of the order. This helps the operator to have access to the data of customer behaviour, and thus help them to refine the process, streamline offerings in the menu, schedule the staff, etc.
6. Marketing through Third-party Apps:
Online visibility of the virtual brands can be enhanced through delivery apps, reducing the need for extensive marketing needs.
How to Set Up Your Cloud Kitchen in Saudi Arabia?
The food service industry in Saudi Arabia is ever growing and thus the scope of cloud kitchen business in Saudi Arabia, is a great option. Great food, impressive service and strong virtual presence are the key essentials to strive in the dynamic food market of Saudi Arabia.
Below we list the steps to kick start Your Cloud Kitchen Business in Saudi Arabia.
1. Get to Know the Market:
Understand the local food market, including the popular cuisine, target customers, high demand delivery areas with low service. This will surely help to tailor your menu and offer impressive services.
2. Have a Well Defined Business Plan:
Get a business plan that outlines the type of preferred business model, menu, marketing plan, prices, etc. Develop a plan to differentiate your business from the competitors.
3. Obtain Required Licenses:
Setting up a business in Saudi Arabia requires acquiring various licenses from different ministries. This includes MISA license, municipality license, commercial registration from the Ministry of Commerce, food safety license from the Saudi Food and Drug Authority (SFDA). Also you have to be compliant towards the local rules and regulations.
4. Select An Ideal Location:
An ideal location based on target delivery areas has to be selected. Industrial or peripheral areas with less rents are ideal, as customer footfall is not required for cloud kitchens.
5. Choose Efficient Kitchen Layout and Equipments:
Efficiency and safety are the two factors to be considered while designing the cloud kitchen. Get high quality equipment and technology and refine your Cloud Kitchen Business in Saudi Arabia.
6. Choose a POS System:
Gert a Point of Sale (POS) system which will go in hand with online ordering platforms and help you efficiently manage orders from various sources.
7. Registration with Delivery Platform
Get yourself registered with popular food delivery platforms in Saudi Arabia, like Careem NOW, HungerStation, and Jahez. Even building your own app could also manage your orders.
8. Build a Strong Brand:
Create a strong brand identity by developing an attractive and memorable brand name and logo. Remember to portray the values and cuisine of your brand through your efficient branding efforts.
9. Market your Brand Using Social Media:
Social media platforms can be efficiently used to market your cloud kitchen. By sharing high quality photos of your dishes prepared, marketing special offers and adding customer reviews you can attract customers and drive more sales.
10. Provide Unhindered Customer Service:
By providing excellent customer services, your cloud kitchen can win the hearts of customers and make your brand stand out. So ensure timely deliveries, and respond to feedback received from the customers.
Setup Cloud Kitchen Business in Saudi Arabia with the Help of Analytix
Careful planning and strict compliance to local rules and regulations are required to Set Up Your Cloud Kitchen in Saudi Arabia. By providing well defined operations, integrating technology and using effective marketing tactics, you can be successful in the dynamic food service industry in Saudi Arabia.
We, the team of Analytix, help you set up a cloud kitchen business in Saudi Arabia, by helping you get required licenses, and offer regulatory compliance. Our experts are well versed with the local rules and regulations regarding the business environment in the country and help you get all the necessary municipal, food safety and commercial licneses required for the cloud kitchen business in Saudi Arabia. Even we offer ongoing business support to help you be compliant towards the local rules and regulations.
Establish your cloud kitchen business in Saudi Arabia with the help of Analytix. Contact us and get professional assistance to run a cloud kitchen business in Saudi Arabia. Ease your business expansion in the Kingdom of Saudi Arabia with the help of Analytix.
Conclusion
Are you now clear with what is cloud kitchen business in Saudi Arabia and how it operates in the country and benefits the economy of the Kingdom and investors? We hope you got it. Still if any of your doubts are uncleared, write to us in the comment section below and do let us know your concerns. Let our experts help you get a comprehensive idea regarding cloud kitchens and how it will benefit you.
Until then, happy reading!
- FAQs
Frequently Asked Questions
If your question is not addressed here, please feel free to reach out to us. We value your inquiry.
Is cloud kitchen allowed in Saudi Arabia?
Yes, cloud kitchen are allowed in Saudi Arabia and is a great option for business in Saudi Arabia as it offers numerous opportunities and scope in the country.
Is cloud kitchen a b2b or B2C company?
Cloud kitchens are primarily B2C, Business to consumer, providing services to end consumers through online food delivery services.
How big is the food industry in Saudi Arabia?
Revenue of the Food market in Saudi Arabia is around US$60.03bn in 2024 and the food sector in Saudi Arabia is expected to annually grow at a rate of 3.80% from 2024 to 2029.
