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‘Ghost kitchens’ boom in Asia amid pandemic

AFP . Taipei
16 Sep 2021 00:00:00 | Update: 16 Sep 2021 01:55:38
‘Ghost kitchens’ boom in Asia amid pandemic
This photo taken on August 18, 2021 shows an employee from Taiwan company Just Kitchen, a network of “ghost kitchens” that make delivery-only food, slicing meat for takeaway meals at one of their locations in Taipei– AFP Photo

In an industrial unit on the outskirts of Taipei chefs are plating 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 “Amazonification” of commercial kitchens was well underway, but coronavirus lockdowns and restrictions have fuelled explosive growth in Asia. 

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

To meet that demand a growing number of restaurants set up delivery only kitchens -- also known as “cloud kitchens” -- or rented space in ones.

Then the pandemic struck, ending dining out for billions.

“It really drove the whole industry into sort of hyper growth, so that really helped us,” Jason Chen, the chief executive officer of JustKitchen, told AFP. 

JustKitchen started operating Taiwan’s first ghost kitchen early last year -- now it runs 17 across the island, as well as one in Hong Kong and is aiming to expand into 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 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 per cent each year to be worth some $139.37 billion by 2028, according to a report by Researchandmarkets.com.

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

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

Culinary gold rush

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

Third generation Thai restaurateur Natalie Phanphensophon had to pivot her family’s 45-strong restaurant empire into takeaway only for much of the last year because of the pandemic.

Her family own 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 ensure everyone on our boat can sail through this together,” the 35-year-old explained. 

Cloud kitchens, she said, are less lucrative than restaurants because people don’t order as many dishes compared to dining out. But their operating costs are far lower.

iBerry Group, which operates restaurants and ice cream shops mostly in shopping malls in Thailand, also set up a delivery only hub. 

“Having a cloud kitchen 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, mom-and-pop cloud kitchens are also opening.

After recently retiring from Air India, Nirjash Roy Chowdhury, sunk his savings into setting up a cloud kitchen in Mumbai.

His six employees were from the hotel trade which has been ravaged by the pandemic. “They didn’t have anything to eat. If I can give somebody bread and butter by doing this, then there’s nothing like it,” the 61-year-old added. 

‘Food speaks for itself’

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

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

Experts say that’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 tech-savvy younger generations will ensure continued growth.