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Driven by changing consumer tastes, technological developments and the ever-changing nature of how we eat With the development of online food delivery services and eat-ins gaining in popularity, demand for virtual kitchens (also known as ghost kitchens or cloud eating points) has grown rapidly over the last several years. Streamlining operations and increasing efficiency by means of technology is a major trend in the market. High-tech software solutions, automation and data analytics are all utilized by virtual kitchens to optimize the entire process of preparing food and delivering it. This not only lowers operating costs, but also speeds up order processing and shipping times-important given the increase in today's fast-paced consumers.
Additionally, the emergence of third-party food delivery platforms have been an important factor in forming a market for virtual kitchens. These platforms serve as middlemen, acting to link virtual kitchens with a larger customer base. So dining hall operators can thus reach more customers without having an actual storefront, allowing them to have a presence in areas where interest is high and otherwise traditionally expensive overheads would be required. Altered consumer behavior toward online food ordering and delivery significantly influence the market dynamics.
Virtual kitchens offer convenience, with an expansive menu of different foods to choose from. They suit the needs of a diverse consumer base that wants fast and varied dining choices. The ability to explore various cuisines without opening many brick-and-mortar restaurants has become an attractive force behind the development of virtual kitchens. Also, with the outbreak of COVID-19 around two years ago lockdowns and social distancing measures made food delivery boom. This has brought virtual kitchens to mainstream popularity faster than anyone had thought possible. In addition to being convenient, consumers also turned to virtual kitchens as a safer choice than traditional dine-in.
This transformation in consumer behavior has had a significant impact on market dynamics. The proliferation of virtual kitchens is now an essential aspect of the food business landscape. As both established foodservice providers and innovative startups have entered the arena, competition within the virtual kitchen market is heating up. Now that the market is opening up, operators are choosing to differentiate themselves through unusual foods as well as quality of service and partnering with various popular food delivery platforms. This is shaping a competitive environment that is encouraging innovation and promoting constant improvement in virtual kitchens.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Segment Outlook | End-user Type, Deployment Type, Solution Type, and Region |
Virtual Kitchen Market Highlights:
Virtual Kitchen Market Overview
Virtual Kitchen Market Size was valued at USD 34.2 Billion in 2022. The Virtual Kitchen market is projected to grow from USD 39.1 Billion in 2023 to USD 80.9 Billion by 2030, exhibiting a compound annual growth rate (CAGR) of 10.95% during the forecast period (2023 - 2030).The growth of food delivery services apps, convenience, cost-effectiveness, and flexibility of virtual kitchens are the factors driving the growth of virtual kitchens.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Virtual Kitchen Market Trends
Increasing Demand Of Food Delivery Services Proliferate Demand Of Virtual Kitchen.
The increased demand for food delivery services has created opportunities for virtual kitchens to meet the needs of both restaurants and consumers, and it is likely that the trend towards virtual kitchens will continue to grow in the coming years. As more consumers opt for food delivery, restaurants are under pressure to fulfill a higher volume of orders. Virtual kitchens can help meet this demand by operating exclusively for delivery, with no physical dining space.
Operating a virtual kitchen can be more cost-effective than operating a traditional restaurant, as there is no need for a storefront, dining area, or front-of-house staff. This can make it easier for restaurants to expand their delivery capabilities without incurring significant expenses. Virtual kitchens can allow restaurant operators to test new concepts or menu items without the expense and risk of opening a new physical location. This can help restaurants adapt to changing consumer preferences and trends more quickly.
By operating from a centralized kitchen, virtual kitchens can reach new delivery markets without the need for multiple physical locations. This can help restaurants expand their customer base and increase their revenue. Many food delivery platforms, such as Uber Eats and DoorDash, partner with virtual kitchens to offer a wider range of delivery options to consumers. This can help virtual kitchens reach a larger audience and increase their visibility.
Figure 1: Food delivery market
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
food delivery market was valued at USD 150 Billon in 2022 and is expected to reach USD 340.9 Billion by 2030, growing at a CAGR of 10% from 2023 to 2030. This growth of food delivery supports cloud kitchen concept as its cheaper option for new entrepreneurs to cater easily with low capital in food services sector.
Virtual Kitchen Market Segment Insight
Virtual Kitchen by Component Type Insights
Based on component type, the Virtual Kitchen market segmentation includes hardware, software, and services. The hardware segment accounted for the largest share of this market and is also anticipated to grow at a CAGR of 9.8% through the forecast period. Virtual kitchen hardware includes appliances, tools, and equipment that are used in virtual kitchen setups. This includes:
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Cooking equipment: This includes ovens, fryers, grills, and other cooking appliances used to prepare and cook food. In cloud kitchens, these appliances may be compact and designed for high-volume cooking.
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Food storage and preparation equipment: This includes refrigerators, freezers, food prep tables, and other equipment used to store and prepare food before it is cooked.
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Order fulfillment equipment: This includes packaging and labeling equipment, such as food containers, bags, and labels, used to package and prepare orders for delivery.
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Point-of-sale systems: This includes software and hardware used to process orders and manage inventory in real-time. Cloud kitchens may rely heavily on technology to manage their operations efficiently.
Virtual kitchen hardware is designed to optimize the preparation and delivery of food orders in a virtual kitchen environment. As the demand for online food delivery services continues to increase, cloud kitchen hardware is likely to play an increasingly important role in the food industry.
Figure 2: Virtual Kitchen Market, by Component Type, 2022 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
On the other side, the services segment is also anticipated to grow with a CAGR of 24.81% over the forecast period. The market for virtual kitchen is predicted to have the second-largest proportion in the service sector. Virtual kitchens may offer a variety of cuisines and dishes that can be customized based on customer preferences and dietary restrictions. This allows customers to have a more personalized dining experience.
Virtual kitchens rely heavily on online ordering platforms such as Uber Eats, Grubhub, and DoorDash for customer orders. These platforms provide a convenient way for customers to order food and have it delivered to their doorstep. Virtual kitchen services may provide customer support through various channels such as email, phone, or live chat. This allows customers to get quick answers to their questions and resolve any issues they may encounter.
March 2023: - Kitchens@ Acquires Swiggy's Cloud Kitchen Arm 'Swiggy Access'. Swiggy sold its business at an undisclosed amount with all equity deal.
February 2022 - Curefoods Pvt Ltd, a cloud kitchen startup floated by Cure.fit, which houses brands like EatFit, CakeZone, and Aligarh House, bought Accel-backed Maverix Platforms Pvt Ltd, which runs ready-to-cook food brand Fingerlix, for an undisclosed amount. Â
Virtual Kitchen End-user Insights
Based on end-user type, the Virtual Kitchen market is segmented into commercial space, residential and hospitality. Due to low cost and ease to reach viability in residential locations, there was a huge surge in delivery from these virtual kitchens. After Covid, with new normal there was a huge decline in dine in and on contrary a huge surge in online delivery. Due to limited food option, cloud kitchens/ virtual kitchens had shown a huge penetration among residential customers.
Virtual Kitchen Regional Insights
By region, this market has been segmented into North America, Europe, Asia-Pacific, and the rest of the world. The North American region dominates this market with a significant share of 65.9% in 2023 and is also estimated to witness good growth with a CAGR of 9.7% during the forecast period. The virtual kitchen market in the US is growing rapidly, driven by factors such as the increasing popularity of food delivery services, rising urbanization, and changing consumer behavior.
The virtual kitchen market in the US is becoming increasingly competitive, with a growing number of players vying for market share. Some of the major players include Kitchen United, Zuul Kitchens, and CloudKitchens. Many virtual kitchens in the US partner with food delivery platforms, such as Uber Eats, Grubhub, and DoorDash, to reach a wider audience and increase their visibility. Some virtual kitchens in the US are expanding beyond delivery to include pickup options or even physical storefronts. This can help to differentiate them from competitors and appeal to a wider range of consumers. The virtual kitchen market in the US presents opportunities for innovation, such as the use of robotics and automation to streamline operations and reduce costs, and the development of eco-friendly virtual kitchens.
On the other side, the Asia-Pacific is also projected to become the second-largest region across the globe at a CAGR of 18.37% from 2023 to 2030. The Chinese government has been supportive of the virtual kitchen industry, as it can help to address food safety concerns and support the development of the country's digital economy. The virtual kitchen market in China is highly competitive, with a large number of players vying for market share.
Some of the major players include Panda Selected, Eleme, and Meituan-Dianping. Many virtual kitchens in China partner with food delivery platforms to reach a wider audience and increase their visibility. For example, Panda Selected operates exclusively on the Eleme platform. Some virtual kitchens in China are expanding beyond delivery to include dine-in options or even physical storefronts. This can help to differentiate them from competitors and appeal to a wider range of consumers. Â
Figure 3: Virtual Kitchen Market, by Region, 2022 & 2030 (USD Billion)
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Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The virtual kitchen market in Europe is growing, although at a slower pace than in other regions such as North America and Asia. The virtual kitchen market in Europe varies significantly by region, with the UK, Spain, and Germany among the largest markets. In the UK, for example, virtual kitchens are becoming increasingly popular due to the high cost of real estate and the increasing demand for food delivery services. In some European countries, regulations related to food safety and hygiene can be a barrier to entry for virtual kitchen operators. However, some governments are taking steps to address these challenges, such as the UK's Food Standards Agency's new guidelines for virtual kitchens.
Virtual Kitchen Key Market Players & Competitive Insights
Major players in the Virtual Kitchen market, include, Kitchen United, Rebel Foods, Keatz, Zuul Kitchens, Kitopi, CloudKitchens, Dahmakan, Swiggy Access, Foodpanda Virtual Kitchen, Taster, Cheetay, The Local Culinary, Smart City Kitchens, Ghost Kitchen Brands, DoorDash Kitchens, Deliveroo Editions, Editions by Uber Eats, Deliverect and Deliveroo Editions.
The market's growth is predicted to be accelerated by the rising adoption of cloud computing and Virtual Kitchen, as well as various strategic alliances and investments among regional businesses. Due primarily to the participation of many equipment suppliers, the United States controls the majority of the market in the region and generates a sizeable portion of overall income. Â
Key Companies in the Virtual Kitchen market includes.
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Kitchen United
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Rebel Foods
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Keatz
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Zuul Kitchens
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Kitopi
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Dahmakan
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Foodpanda Virtual Kitchen
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Taster
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Cheetay
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The Local Culinary
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Smart City Kitchens
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Ghost Kitchen Brands
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DoorDash Kitchens
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Deliveroo Editions
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Editions by Uber Eats
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Deliverect
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Deliveroo Editions
Virtual Kitchen Industry Developments
March 2023: - Kitchens@ Acquires Swiggy's Cloud Kitchen Arm 'Swiggy Access'. Swiggy sold its business at an undisclosed amount with all equity deal.
February 2022 - Curefoods Pvt Ltd, a cloud kitchen startup floated by Cure.fit, which houses brands like EatFit, CakeZone, and Aligarh House, bought Accel-backed Maverix Platforms Pvt Ltd, which runs ready-to-cook food brand Fingerlix, for an undisclosed amount.
Virtual Kitchen Market Segmentation
Virtual Kitchen Component Outlook
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Software
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Solution
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Services
Virtual Kitchen End-users Outlook
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Commercial Space
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Residential
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Hospitality
Virtual Kitchen Regional Outlook
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North America
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US
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Canada
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Europe
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Germany
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France
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UK
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Italy
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Spain
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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Australia
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Rest of Asia-Pacific
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Rest of the World
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Middle East
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Africa
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Latin America
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