Busy lifestyle, decreasing willingness to spend time to cook in the kitchen, and the convenience of ordering food online make cloud kitchens important part of our lives. Looking at the global growth trend of cloud kitchens in recent years is enough to understand how we prefer to consume food. The cloud kitchen market size is expected to reach $71.4 billion by 2027, yet in 2019 it was only $43.1 billion!
While launching cloud kitchens requires a little upfront investment and it’s a business in demand, consumers are presented with new restaurant choices every day.
So here’s a natural question – how do you make sure that buyers will choose your cloud kitchen service and not your competitor’s? And how do you make sure that your cloud restaurant will keep growing despite so high competition, increasing food costs, and emerging problems?
Instead of googling the answers to these questions, we decided to interview restaurant owners and hospitality professionals and ask:
“What’s the secret of a restaurant/cloud kitchen’s success? What would you recommend to other restaurant owners to increase profitability?”
According to our first guest, the success is in employee retention and satisfaction:
#1 Jen Bee, Restaurant Results Coach, Owner at The Busy Bee Agency, Washington DC, USA
“One of the best-kept secrets to increasing your restaurant’s profitability is employee engagement.
When your employees feel like a valued team member they are more likely to represent your restaurant in the best way possible. They are more productive, take better care of your guests and become brand ambassadors within their network. And it generates more direct business than any Facebook ad could. They provide excellent service because they have pride in their job.
When your employees create a positive guest experience your customers are more likely to return and spend more money.
Not to mention your retention rate is higher with engaged employees meaning less turnover and money on training new hires.”
Our second guest again talks about the importance of the restaurant team, drawing attention to finding the right team members by using the right tools:
#2 Thor Wood, Founder and CEO at SnapShyft, Marketplace for staffing in foodservice & hospitality, Indianapolis, USA
“Restaurants should optimize for the war for talent and employee retention by embracing the gig-economy and labor optimization tools.
Going under-staffed (turnover) cost the industry $146 BILLION pre-covid. And now with three million less workers, dropping teen participation in the industry, outdated recruitment and retention strategies, businesses are failing to get workers in the door AND working.
Only 20% interview show up rate, 50% showing up Day 1 to work, and only 50% last a week on the job! Businesses can take advantage of dynamic labor force trends in real-time with the right tools, but must begin soon or be left behind— permanently.”
According to our next guest, increasing the restaurant profitability is dependent on a complex of optimization tactics and mentions the most essential factors:
#3 Erica Barret, Owner and Restaurateur at SOCU Southern Kitchen & Oyster Bar, Mobile, USA
“Learning how to increase the profitability of your restaurant is never-ending. You can’t be scared to think outside the box, conduct your own market research, test new menu items by running “specials” and make sure you are constantly engaging your customers via social media and digital marketing campaigns.
When you truly understand the niche of foodies in your market, you are able to curate the perfect menu based on the research and sales from specials you have run. There will be some menu items that work and some that don’t, but you can’t be scared to fine-tune the recipes and weed out the unsuccessful ones.
Being profitable also goes beyond just the menu and digital marketing, it also comes down to staying within the right percentage of labor, food cost, and growing your catering program.
Networking within your community with local vendors when it comes to purchasing is vital, do you have the right staffing to fully support your operation and what are you doing to tap into the catering opportunities in your local area. These are the questions that I ask myself daily to ensure profitability. Once you figure out the formula your brand will truly be a success!”
Our next guest puts the emphasis on the operational efficiency, considering their experience of working with different restaurants:
#4 Victor Cardamone, Owner at Mise Designs, Restaurant kitchen design and consulting firm , Williamstown, USA
“We have designed and redesigned a number of restaurants and cloud kitchens and the recent strategy to increase profitability is to increase operational efficiency.
This could take the form of adding automation to a cloud kitchen. In the case of stand-alone restaurants, it’s necessary to look at the functional capabilities of the existing operation to determine where efficiencies are lacking and provide guidance as to where to adjust accordingly.
Every operation is different, so the strategy for each business will be slightly different to ensure the changes they make increase their profitability.”
One more guest who draws attention to the employee shortage problem and how it can be fixed:
#5 Izzy Kharasch, Restaurant coach at Hospitality Works
“A surprising talent shortage in the hospitality industry is a major problem for restaurants. I suggest restaurants post job ads in places like supermarket bulletin boards, church bulletins and at other places applicants not previously in the restaurant industry might see.
There is a big shortage of applicants and a person who has never worked in a restaurant before might be eager to be trained and can turn out to be a great employee.”
Our next guest from a hospitality interior design firm draws attention to the effective space utilization:
#6 Nicole Herman, Founder and Principal Designer at The Social Design Studio, Hospitality & Retail Interior Design Firm, Phoenix, USA
“One creative way to increase the profitability of your restaurant is to rethink your existing restaurant design and layout. Are you under-utilizing any areas? Can your floor plan be reworked to allow more functional seating?
For example, a current client had a front patio space that had a 6-top dining table. They never used the table because the area was awkward and uninviting.
We looked at the space and are now transforming it into a built-in cocktail lounge to fit up to 12 guests. We anticipate this will now be a highly requested area and will add to our client’s bottom line.”
Our next guest recommends finding the best hours and places when you are most likely to meet hungry people:
#7 Timothy Woods, CCU & GMU, Carnivore Style, Resource for all things meat-related, Jacksonville, USA
“One tip to making a restaurant profitable is to meet your customers where they are, when they are looking for food.
If you are a food truck, this gets slightly easier as you can physically go to areas where hungry people are looking for food.
For stationary restaurants, you can look into adjusting hours to when people are eating and finding other ways to make your restaurant more convenient for people.”
To make cloud kitchen in USA successful, our last guest suggests to focus on developing health-conscious menus as consumer habits have changed in the post-COVID period:
#8 Baron Christopher Hanson, Growth strategy consultant at RedBaron Consulting, Florida, USA
“The most critical source of profitability post-COVID will be visible dining safety combined with more healthy ingredients –– and no added sugars or fats or other decadent ingredients once used to make dishes more salable.
What restaurant/club/fine dining chefs must understand is that America (and the world) have been largely cooking meals at home from scratch for 16 months –– NOT consuming high amounts of decadent sugars, fats, and other ingredients that make restaurant food largely unhealthy and expensive entertainment.
To please post-COVID diners, crowds, and local media, more health-conscious menus are what will make the difference in terms of repeat customers and sustainable profitability going forward.”
Final thoughts: Is your cloud kitchen in USA set to be profitable?
We hope these quotes drew your attention to some essential factors and problems and motivated you to rethink the strategies you currently use in your business.
Last but not least, if you still don’t use cloud kitchen software, you are holding your restaurant back from reducing food wastage, optimizing prices, and tracking your operations effectively.
We recommend reading our guide how to choose a cloud kitchen software which will show you the importance of restaurant systems in sustainable cloud kitchen growth and guide you in finding the most relevant solution for you.