Here are the top cloud kitchen operators in Southeast Asia

The most commonly thrown-around statistics in the food and beverage (F&B) industry are that 60% of all restaurants shut down within their first year and 80% fail to make it beyond the fifth year.

Clearly, even in the best of times, restaurant owners do not have it easy. Then the Covid-19 pandemic further complicated matters and shuttered countless restaurants and cafes across the region.

Cloud kitchens, however, have emerged over the last few years as an immensely popular way of doing business in the F&B industry. What’s more, the pandemic has actually provided a boost to the cloud kitchen businesses across the region.

Investors are pumping millions into cloud kitchen operators that are experimenting with different ways to run their businesses while also expanding rapidly to get a strong foothold in Southeast Asia’s cloud kitchen market.

Multiple business models emerging

With the cloud kitchen market in Southeast Asia still at a nascent stage, there are multiple business models being developed by existing and upcoming players. Some of these business models even overlap.

Malaysia’s Dahmakan can be called a pure-play cloud kitchen operator. It prepares its meals from centralized kitchens under its own brand and delivers them on its own. It has no storefront and therefore does not offer a takeaway option.

Dahmakan has already ventured into Thailand and raised US$28 million from investors such as Rakuten Capital, White Star Capital, and Y Combinator. It closed its most recent round of funding just as Covid-19 started to spread in the region in late February 2020.

Singapore-based Grain, which has also entered Thailand, operates on a similar model.

Meanwhile, India-based Rebel Foods is blending the concepts of a pure-play cloud kitchen, where it owns virtual restaurant brands offering delivery-only services, with a third-party cloud kitchen/shared cloud kitchen model, where it partners with virtual or physical restaurant brands for delivery-only services.

There are also the delivery app-led cloud kitchens by Grab, Gojek (in partnership with Rebel Foods, which we’ll dive into later), Deliveroo, and Foodpanda. These kitchens operate similarly to a shared cloud kitchen concept, but delivery from these outlets is exclusively handled by the delivery apps. Furthermore, these delivery apps provide varying levels of expertise and infrastructure to restauranteurs who can then focus solely on the food.

Apart from being delivery app-led cloud kitchens, Grab’s GrabKitchens also apply what is known as a “hybrid cloud kitchen” model where customers can actually visit the locations for takeaway orders. In this model, while a cloud kitchen does not own any virtual restaurant brands, it partners with a large number of existing restaurants, both physical and virtual, to help them expand. In GrabKitchen’s case, it has partnered with over 300 brands/restaurants regionally.

Indonesia-based Hangry also operates on a similar concept. Its kitchens cater to orders coming from the four virtual restaurant brands it owns.

Finally, there are the traditional physical restaurant owners and quick-service restaurant chains that have realized that cloud kitchens are the future. Filipino fast-food giant Jollibee has already expanded into Singapore with its cloud kitchen offering, and it has also lined up a roughly US$144 million investment for restructuring its business and setting up cloud kitchens across the world.

Indonesia attracting the most attention

Market in early stages of growth

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