AMMAN — Ghost kitchens, professional food preparation
facilities designated for the preparation of delivery-only meals, appear to be
on the rise in Amman, Jordan.
اضافة اعلان
Also known as cloud kitchens, the market of ghost kitchens was valued of at
$43.1 billion by a new “Global Opportunity Analysis” report by Allied Market
Research, which estimated that it would exceed $70 billion in value by 2027.
To Jordanian entrepreneurs, this provides for a unique
opportunity.
In an interview with
Jordan News, Khaled Khalifeh, CEO of
the
Hungry Food Company, a Amman-based corporation with a growing portfolio of
cloud-kitchen, delivery-only restaurants, encompassing “Hungry Sushi”, “Hungry
Poke” and “Eglibha,” expressed optimism towards the future of the Jordanian
cloud kitchen market.
Now that
COVID-19 restrictions are easing, “people are
longing for normalcy” and going back to physical restaurants, Khalifeh said.
“Nevertheless, it has a future in Jordan,” he added.
“Two years ago, (ghost kitchen businesses) were almost
nonexistent” in Jordan. Today, “there are dozens of new concepts initiated
every month,” estimated Khalifeh.
Prolonged closures of businesses in Amman in light of the
pandemic have led to severe economic recession, and propagated increased
unemployment. However, restaurateurs and entrepreneurs managed to identify a
silver lining: Greater reliance on food delivery as people stayed home proved a
golden opportunity for both entrepreneurs to start their ghost kitchen,
delivery-only concepts, and for restaurant owners to utilize their kitchens
towards serving ghost kitchen businesses as foot traffic reached all-time lows.
“The pandemic and cloud kitchens go together like peanut
butter goes with jelly,” said one local cloud kitchen frequenter who chose to
remain anonymous.
Khalifeh, who also owns a separate physical restaurant
location, like many other restaurant owners, was taken aback by the sudden
decline in business activity. In search for alternative revenue streams, he
came across the cloud kitchen business model, which he viewed as “ideal for
COVID.”
Novel sources of revenue are especially vital for the
support of employees. Khalifeh was looking to “avoid the downsizing of staff
members,” because of both government restrictions limiting businesses’ ability
to lay off employees, and because he aimed to avoid dismissing individuals
“that had worked at his restaurant for a long time.”
Many had spotted the opportunity to start their own
businesses, “but didn’t have the appropriate infrastructure,” according to
Khalifeh, and subsequently turned to kitchens to bring their ideas to life.
Here, a symbiotic relationship between cash-strapped food entrepreneurs and
demand-deprived kitchens is obvious. During such pandemic-induced
circumstances, “a cloud kitchen is very feasible,” said Khalifeh.
Certainly, the cloud kitchen model possesses various
advantages when it comes to the era of COVID-19, particularly when taking into
account its delivery-only nature, according to Khalifeh.
When you operate a central kitchen serving cloud
restaurants, “it doesn’t have to be cuisine specific, so you save no
appearance, furnishing and non-food items” that are usually pertinent to the
restaurant’s cuisine, according to Khalifeh.
Cost efficiency is, perhaps, the most notable advantage of
cloud restaurants when compared to traditional restaurants.
Khalifeh estimated
that starting a delivery-only restaurant can save owners “50 percent, if not
more” of what it would cost to start a traditional restaurant. A single
kitchen’s ability to serve multiple cloud restaurant clients even enables
restaurant owners to purchase materials in bulk from suppliers, which further
drives cost down, according to Khalifeh.
However, Khalifeh noted that the relative cost effectiveness
of cloud kitchens does not mean it's easy to run one. It’s an area that “people
jump into because it seems more affordable,” he said. “It’s a very price sensitive
market, and margins aren’t as high as people believe.” This sensitivity is
largely due to the fact that in exchange for generally the same prices found in
traditional restaurants, customers are losing out on the dine-in experience,
which includes service. Providing an experience, whether through presentation
or other methods, is “the core of the cloud kitchen model,” asserted Khalifeh.
“Then comes marketing,” an imperative aspect that serves to
make up for the lack of a physical location, which typically consists of
banners and cuisine-specific decoration, he said.
Ultimately, Khalifeh believes that this industry is enjoying
considerable growth. “It’s easier now, and you have people that provide that
service to clients” looking to start such businesses. “People are more
comfortable with the idea of delivery, and the logistics of it are improving”
through user-friendly delivery apps and faster transportation.
Khalifeh sees delivery apps launching cloud kitchen sections
“as they did with grocery shopping.” He even predicts the entry of regional
cloud concepts into the Jordanian market in the near future.
Price sensitivity, an issue already “prominent
in other Jordanian industries” however, “remains the main challenge.”
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