TIRUCHY: Cloud kitchens mushroomed across Tiruchy two years ago, thanks to the low-cost business model and loyal customer base. Today, the trend has plateaued as operators are unable to withstand the operational and financial pressure.
Cloud kitchens typically operate under two models – commercial facilities and home based facilities. Due to rising overheads like rent, fuel cost, staff salary, etc, the former has seen a decline.
On the other hand, home-based operator would incur expenses of Rs 25,000 per month, excluding advertising cost. Most of them depend on social media and it would cost Rs 15,000-Rs 20,000 to shoot and post promotional videos. Home-based operators prepare food on the basis of pre-orders. For three meals a day, they charge around Rs 250 per person and the monthly subscription would be Rs 6000 on an average.
The customers are mostly youth who are staying alone for the purpose of education or employment. This loyal customer base is what keeps the home fires burning. M Ayeesha (37) from Bheema Nagar, who runs a home-based operator, says the returns have been steady but modest. "I started the venture 15 months ago. There is profit, but only after I confined the menu to biryani, mandi and brownies," she said.
Ayeesha, who is helped by her mother-in-law, said limited resources prevent her from partnering with food delivery apps. "I can't handle large orders as I cook from home. I get one or two orders a day, and either my husband delivers them or customers pick them up," she added. S Saranyabai (30) has been operating a cloud kitchen In Thiruverumbur for five months and has seen encouraging response. But competition, she says, is intense.
"Many people are entering the field. We are a team of five, and deliver food too because we don't want to pay high commission to food delivery aps," she said. Food delivery executives estimate that over 150 cloud kitchens have opened in Tiruchy over the last three years, especially in Thillai Nagar, KK Nagar, Bheema Nagar and Palakkarai. But not all ventures survive the initial enthusiasm.
A senior manager with a food delivery platform said nearly 40% of these ventures either shut down or shifted to a different business model within 18-24 months, due to factors such as rising cost, competition, limited margins and app commission. Abirami Sakthivel (36), who launched a fitness-centric cloud kitchen two years ago, shut it down within a year.
"With a niche menu, the Tiruchy crowd wasn't willing to spend much. Daily subscription orders were too few to sustain operations," she said. On the flip side, some have used cloud kitchens as a stepping stone. M. Salman (30) who started a home-kitchen in 2020 converted it into a full-fledged restaurant in 2023. "People loved the homestyle quality of a cloud kitchen, so I still market it that way. I linked with food delivery apps, and the demand increased, which encouraged me to expand," he said.