This archive report was first published on 13 July 2019.
Author Sunny Bindra predicted in 2019 that the home delivery business would experience significant growth, and it has. With more women entering the workforce, worsening traffic jams, and a new generation of online shoppers, it was clear that traditional bricks-and-mortar dining and shopping would take a hit.
However, Bindra did not anticipate the rise of the cloud, and the data it stores about our habits and preferences. For those who regularly order takeout meals through apps, a great deal is known about their eating habits, including their favorite dishes, ordering patterns, and average spend.
When these data are aggregated, a fascinating map of a particular city or area can be created, showing the most popular dishes, when they are most often ordered, and for what budget. This is a goldmine for savvy entrepreneurs, who can create businesses that cater to these demands.
But there's a problem: who holds this data? Not the restaurants, who have not been smart enough to think about data collection. Instead, they have partnered with home delivery apps, which collect the food and deliver it on their behalf, while also collecting valuable customer data.
As a result, we are about to witness the emergence of the cloud kitchen, a centralized, stripped-out kitchen that produces only the most popular dishes, for delivery only. This kitchen locates itself in a place at the center of its delivery market, using cheap labor and bikes to move the food around, and may even cut costs further with the use of delivery drones.
The cloud kitchen is a threat to the established restaurant industry, and it's already happening in many cities around the world. The delivery companies are integrating backwards into food production, using the data they have collected to create efficient kitchens that produce popular dishes at a low cost.
So, what should restaurants do now? Option one is to set up centralized kitchens and partner with the delivery network guys, but this is not in everyone's capabilities. Option two is to weather the storm and focus on what they do best: fresh, tasty food served in a pleasant ambience.
But, if what you are producing today is mediocre food served mediocrely, you won't survive this cloud and this thunderstorm. You will neither be efficient enough nor distinctive enough to command a following.
