Cloud kitchens, also known as ghost kitchens or virtual kitchens, have become quite popular among investors and restaurant owners. They offer low investment expenses and can be an opportunity for restaurant owners to expand their business.
The cloud kitchen business model relies heavily on delivery services. It doesn’t require a seating area, commonly required in a traditional restaurant, and or waiters.
On the other hand, traditional restaurants have to overcome many hurdles such as rising operating costs. That’s why ghost kitchens have emerged as the golden solution for small business owners and restaurateurs who want to expand with minimal investment.
But before we can see how ghost kitchens offer such a unique solution, we first need to understand what sets the cloud kitchen sector apart from the broader F&B industry.
This article provides an overview of cloud kitchens, their importance and the Saudi Arabian cloud kitchen industry. We’ll also explore their potential to complement and grow traditional F&B and restaurant businesses.
The cloud kitchen industry in Saudi Arabia
The cloud kitchen industry has witnessed significant growth in the Gulf Cooperation Council (GCC) and, particularly, Saudi Arabia. The cloud kitchen model has attracted many investors, mainly because of its lower cost and easier expansion, compared to traditional restaurants.
In the GCC, the ghost kitchen market was valued at $2 billion in 2024. It’s forecast to grow at a compound annual growth rate (CAGR) of 13.7% between 2025 and 2033, reaching $6.6 billion by 2033.
Meanwhile, the Saudi cloud kitchen market was valued at $173 million in 2023. It’s expected to rise at a CAGR of 11% between 2024 and 2030, confirming the growing interest in the industry.
Saudi Arabia also marked the highest number of online food delivery users at roughly 7.9 million users across the kingdom. Coming in second place was Egypt with 3.6 million users, followed by the UAE and Morocco with 3.2 million and 3 million users, respectively.
Data also shows ghost kitchens are expected to cover 50% of the global takeout and fast-casual food space by 2030.
In the Middle East, the largest cloud kitchen management company is Kitopi. Established in 2018 and based out of Dubai, Kitopi manages 200 cloud kitchens across Saudi Arabia, the UAE, Bahrain, Qatar, and Kuwait.
Cloud kitchens: Expanding reach without significant overhead
Virtual kitchens focus on the end product and can expand without significant overhead, as opposed to traditional restaurants.
Here are some key benefits of cloud kitchens along with how these virtual kitchens can grow traditional dining concepts.
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Cost-effective expansion
Establishing a physical restaurant in a new city involves significant expenses, including real estate, construction, and staffing. Cloud kitchens, on the other hand, operate delivery-only models, eliminating the need for prime location leases and extensive front-of-house staff.
This reduction in overhead allows restaurants to enter new markets with minimal financial risk. For example, using a central kitchen supported by satellite kitchens to efficiently reach customers, India’s ITC expanded its cloud kitchen business into major cities like Mumbai, Delhi, and Kolkata.
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Rapid market entry
Cloud kitchens can speed up the process of entering new markets. Unlike traditional restaurant setups which require time for site selection, construction, and gathering permits, virtual kitchens provide ready-to-use kitchen spaces, helping restaurants launch in new locations quickly.
This agility is crucial for leveraging emerging market trends and meeting customer demand promptly. Brands like Grimaldi’s Pizzeria, in the U.S., have used cloud kitchens to expand into new regions without the delays associated with traditional restaurant openings.
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Opportunity to test menus and scale concepts
Ghost kitchens offer a low-risk space for testing new dishes, ideas, and culinary concepts. This flexibility enables restaurants to gather customer feedback and refine offerings before committing to a full-scale launch.
Restaurants can easily add new menu items and test them on their delivery menus, all while using cloud kitchens. For example, ghost kitchens can create these new dishes and deliver them to customers in a certain area to gauge customer interest.
India’s Rebel Foods, for example, operates multiple brands from its cloud kitchens, allowing for experimentation and rapid scaling of successful concepts.
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Enhancing delivery capabilities
With the rise of online food delivery around the world and in the Middle East and North Africa (MENA) in particular, having a robust delivery system is critical.
Known for their easy expansion, virtual kitchens can easily and quickly pop up in strategic locations. This allows for faster and quicker deliveries to customers.
United States-based food brand Popeyes adopted this trend and used it to expand into new markets. It relied on virtual kitchens to meet food delivery demand efficiently.
Wrapping it up
A collaboration between cloud kitchens and traditional restaurants can act as a strategic step in bolstering growth and business expansion in the restaurants and coffee shops sector.
While traditional restaurant concepts have the expertise in offering unique dining experiences inside their venues, cloud kitchens offer a digital infrastructure that can meet the needs of online delivery efficiently and at a lower cost.
Through this collaboration, restaurants can also benefit from virtual kitchens’ capabilities, including reaching various locations without the need to open new venues or branches. This can help restaurants reach new customers in new areas and increase their revenues.
On the other hand, cloud kitchens can benefit from working with popular restaurant brands, bolstering their market presence. This collaboration and integration can create a flexible and sustainable business model that serves both types of F&B concepts.
It also allows restaurants and virtual kitchens to adapt to changing market conditions. They can also benefit from one another in the fast-growing restaurant industry.
Discover Foodics’ solutions for cloud kitchens and how we help you improve and manage virtual kitchens and restaurants alike.
