Boom of ‘ghost kitchens’ in Asia as pandemic sparks huge demand

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

TAIPEI In an industrial unit on the outskirts of Taipei, chefs prepare dishes that will never be served in a restaurant: Welcome to the world of “ghost kitchens”.

Even before the pandemic caused an earthquake in the global restaurant business, the ‘Amazonization’ of commercial kitchens was well underway, but coronavirus lockdowns and restrictions fueled explosive growth in Asia.

The recent boom in food delivery apps means customers were already used to restaurant-quality meals being delivered quickly to their homes.

To meet this demand, a growing number of restaurants have set up delivery-only kitchens – also known as “cloud kitchens” – or have rented spaces in them.

Then the pandemic struck, ending restaurant meals for billions.

“It really got the whole industry into a kind of hyper-growth, so it really helped us,” Jason Chen, CEO of Just Kitchen, told AFP.

Just Kitchen started operating Taiwan’s first ghost kitchen early last year – it now operates 17 on the island, as well as one in Hong Kong, and aims to expand into the Philippines and Singapore from here the end of this year, he said.

Regional delivery giants like Singapore-based Grab and Indonesia’s GoJek have also jumped on 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% each year to some $ 139.37 billion by 2028, according to a report from Researchandmarkets.com.

Asia-Pacific, home to 4.3 billion people, already accounts for some 60 percent of the international market.

For many people in the region’s densely populated cities, where living space is limited, eating daily at restaurants or inexpensive food stalls is more affordable and viable than cooking at home.

Culinary Gold Rush

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

Third-generation Thai restaurateur Natalie Phanphensophon has only had to pivot her family’s 45-restaurant take-out empire for much of last year due to the pandemic.

His family owns the popular Mango Tree and Coca chains, many of which are located in now empty malls with high rents.

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 that everyone on our boat can go through this together,” said the 35-year-old.

Boom of 'ghost kitchens' in Asia as pandemic sparks huge demand

Steamed Stuffed Bun, a favorite traditional Chinese dish in Asia. PHOTO STOCK

Cloud kitchens, she said, are less lucrative than restaurants because people don’t order as much food as restaurants. But their operating costs are much lower.

iBerry Group, which operates restaurants and ice cream parlors primarily in shopping malls in Thailand, has also set up a delivery-only hub.

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

As conglomerates and chains have shifted to delivery-only operations, cloud kitchens for moms and dads are also opening.

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

Its six employees were from the hotel industry ravaged by the pandemic.

“They had nothing to eat. If I can give someone bread and butter doing this, then there is no such thing, ”added the 61-year-old.

“The food speaks for itself”

Chowdhury estimates that it will take six months to break even, but is convinced 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 Institute for Economic and Financial Development think tank, said falling operating costs and the ordering habits of tech-savvy younger generations will ensure continued growth.

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

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

“Once you’ve done that, you get used to it so much that it’s hard to step away from the convenience… We’re very positive about the outlook.”

In an era when much of the restaurant industry was devastated, ghost kitchens kept chefs, delivery drivers and wholesalers in business.

But they inevitably added to the mountain of plastic already produced.

A recent study in Bangkok found plastic waste 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 flourish alongside eateries. .

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

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