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Home BUSINESS Asia’s ‘ghost kitchen’ boom as pandemic drives high demand

Asia’s ‘ghost kitchen’ boom as pandemic drives high demand

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Asia’s ‘ghost kitchen’ boom as pandemic drives high demand

The practical use of space by cloud kitchens makes them an attractive investment option for property developers.

TAIPEI – At an industrial unit on the outskirts of Taipei, chefs prepare meals that will never be served in a restaurant – welcome to the world of “ghost kitchens.” Even before the pandemic sent an earthquake through the global restaurant trade, the “amazification” of commercial kitchens was underway, but coronavirus closures and restrictions have fueled explosive growth in Asia.

The recent boom in food delivery apps meant that customers were already used to getting restaurant-quality meals delivered quickly to their homes.To meet that demand, a growing number of restaurants installed or rented delivery-only kitchens, also known as “cloud kitchens,”.Then the pandemic broke out, ending dinners out in the billions.

“It really brought the whole industry into a kind of hypergrowth, so it really helped us,” Jason Chen, Just Kitchen’s chief executive officer, told AFP.

Just Kitchen began operating Taiwan’s first ghost kitchen early last year; it now has 17 island-wide as well as one in Hong Kong and aims to expand to the Philippines and Singapore by the end of this year, he said.

Regional delivery giants like Singapore-based Grab and Indonesia’s GoJek have also joined the trend. Grab opened 20 new cloud kitchens in Southeast Asia last year, up from 42 before the pandemic.

The global ghost kitchen industry is expected to grow more than 12 percent each year to be worth $ 139.37 billion by 2028, according to a report from Researchandmarkets.com.

Asia Pacific, home to 4.3 billion people, already represents about 60 percent of the international market.

For many inhabitants of the region’s densely populated cities, where living space is scarce, eating daily at cheap restaurants or concession stands is more affordable and viable than cooking at home.

Culinary gold rush

The Euromonitor research group estimates that there are some 7,500 cloud kitchens now operating in China and 3,500 in India, compared to 1,500 in the United States and 750 in Britain.

Third-generation Thai restaurateur Natalie Phanphensophon had to turn her family’s 45 restaurant empire into takeout for much of the past year due to the pandemic.

His family owns the popular Mango Tree and Coca chains, many located in now-empty shopping malls where rents are high.

Earlier this year, they opened their first cloud kitchen on the outskirts of Bangkok, with plans for two more.

“Our goal is to make sure everyone on our ship can get through this together,” explained the 35-year-old.

Cloud kitchens, he said, are less lucrative than restaurants because people don’t order as many dishes compared to going out to dinner. But its operating costs are much lower.

iBerry Group, which operates restaurants and ice cream parlors primarily in shopping malls in Thailand, also established a delivery-only center.

“Having a kitchen in the cloud is basically an oxygen mask for us during Covid-19,” said brand manager Thitanun Taveebhol.

While conglomerates and chains have moved into delivery-only operations, familiar cloud kitchens are opening up as well.

After recently retiring from Air India, Nirjash Roy Chowdhury invested his savings in creating a cloud kitchen in Mumbai.

His six employees were from the hotel industry that has been devastated by the pandemic.

“They had nothing to eat. If I can give someone bread and butter doing this, then there is nothing like that, ”added the 61-year-old.

‘Food speaks for itself’

Chowdhury estimates that it will take six months to break even, but is confident that there is long-term potential.

“I think this cloud cooking culture is here to stay,” he predicted.

Experts say it’s a safe bet.

Nailul Huda, an analyst at the Jakarta-based think tank Institute for Development of Economics and Finance, says lower operating costs and the ordering habits of the tech-savvy younger generations will ensure continued growth.

“People will continue to order food even after the pandemic and I think the ghost kitchen … has the potential to continue to grow rapidly even after it ends,” he said.

Just Kitchen’s Chen says the pandemic has changed the way people order food right at their doorstep.

“Once you do, you get so used to it that it’s hard to walk away from convenience … We are very positive on the outlook.”

At a time when much of the restaurant industry was devastated, ghost kitchens have kept chefs, delivery people and wholesalers in business.

But they have inevitably added to the mountain of plastic that is already being produced.

A recent study in Bangkok found that plastic waste has nearly doubled during the pandemic, in part due to food delivery services.

Food writer Leslie Tay says that while ghost kitchens “have taken the personality or soul out of food to some extent,” there is room for them to thrive alongside dining out.

“At the end of the day, I think food speaks for itself … if your food is good, people will start talking about it.”

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