KUALA LUMPUR, July 26 — During the movement control order (MCO) when eateries were shut for dine-in, demand for food deliveries exploded.
Even though restrictions have now been relaxed with dine-ins allowed, many have opened their minds towards food deliveries, recognising the convenience of these services.
This has also brought forth the immediate need for cloud kitchens that are just focused on food deliveries. Some operators also feel this is the way forward for the F&B industry.
But wait... what are cloud kitchens?
Also known as ghost kitchens or even dark kitchens, it is essentially a shared space with multiple kitchens under one roof.
There’s no shop front. No dine in. Just a space purely where food is cooked upon order, picked up and delivered to your doorstep.
Depending on different business models, it could be one company with different brands serving an array of cuisines or a kitchen that hosts various F&B companies.
As foot traffic is not important, it is usually located at cheaper spots like commercial premises rather than shopping malls. The attraction is a business model with cheaper operation costs such as rent, labour, decor and furnishing costs.
Even before the Covid-19 pandemic, cloud kitchens already existed in Malaysia.
Some early movers to this industry include the likes of Dahmakan (started back in 2015), Epic Food Hall and MyeongDong Topokki.
Research firm Statista estimates revenue from food delivery services in Malaysia will amount to RM896 million in 2020 — about 46 per cent increase compared to last year’s revenue. They also expect the revenue from this segment to grow at a rate of 18 per cent for the next four years.
Two companies — Cookhouse and Focus Dynamics Berhad (Focus) — are among the many who hope to crack the lucrative cloud kitchen market.
The newly-opened Cookhouse is not your conventional cloud kitchen. You can either work in a typical cloud kitchen or a co-working space that features a shared kitchen equipped with a wide range of cooking equipment for Asian and Western cuisine, baking, food preparation and packing.
The idea is to create a hub that will nurture budding food entrepreneurs. The place located at PJ’s Taman Medan also houses a venue for cooking events.
The 10,000 square feet space was dreamt up by Huen Su San who brings to this her expertise in building central kitchens for her own F&B ventures and running the event space Glasshouse at Seputeh.
On the other hand, ACE market listed Focus announced in June that they are making their maiden foray into cloud kitchens.
The company is better known for its entertainment, lifestyle operations and wine distribution such as Lavo and Bounce. As they were hit by the pandemic, Focus pivoted to this new business model.
Currently their first cloud kitchen at Menara Persoft Tropicana is still in the planning stages. Focus expects to complete the kitchen by the fourth quarter of the year and has allocated about RM3 million as initial capital.
Cookhouse’s Huen said she decided to start Cookhouse even before the Covid-19 pandemic as she realised through her own experience that setting up a central kitchen is incredibly capital intensive.
She shared, “About two years ago, I set up two central kitchens for my F&B business. While the central kitchen was essential to our operations, I quickly learned it was also a hefty investment with a long payback period and it tied up a lot of cash which could have been invested in the expansion of new outlets.”
As she observed the growing trend in co-working offices, it dawned on her that the business model may also work for kitchens.
“It hit me that it would be of greater value if there was an option to rent and share kitchens. So I decided to make it happen.”
The benefits of a community-based co-sharing space are not only monetary. Huen added, ”I am a strong believer that we, as humans, learn fastest and benefit most through interaction with others.”
This, she hopes, will benefit food entrepreneurs or new food start-ups by flattening the usually-steep learning curve.
Similarly the event space is envisioned as a place to draw like-minded people such as chefs, equipment and food service suppliers who can offer activities to nurture these entrepreneurs.
It took Cookhouse about six months to bring their idea into fruition. In fact, Huen tells us they were almost 90 per cent completed when the MCO started. Huen explained, ”This definitely set us back but I believe in the end it is very much a blessing in disguise.”
That difficult period highlighted the risks and challenges for food businesses including high rental cost and increasing labour cost. It also accelerated the growth of the food delivery business and educated Malaysians on cloud kitchen concepts.
In planning Cookhouse, Huen explained that much thought was put into creating what she calls, “an ideal space to start out an online food delivery business.” This included minimising the set up cost and maximising shared equipment uses.
They also added a co-working office, photography studio that you can use to shoot food products and a packing utility space.
Their walk-in chillers and freezers can also be rented out on an ad-hoc basis, making it a good choice should the entrepreneur need temporary space for say a special catering project.
Cookhouse has also partnered with various companies such as Unilever Food Solutions that provides food ingredients and Food Market Hub which runs a cloud inventory management software for food businesses.
Other partners such as Oddle give support on the creation of an online shop and integrating with the logistic business while Aliments provides online ordering solutions with customer relationship management. There are also logistic partners such as SoCar and Mr Speedy.
Cookhouse’s set-up has cloud kitchens with equipment and infrastructure facilities. These kitchens can be customised according to your needs.
Plans are also underway to build more cloud kitchens in more locations. This includes fully equipped or bare kitchens, depending on requirements.
For their shared kitchen, there is a lot of flexibility on the charges depending on your usage. If your use is short term, you can opt for passes on a daily or weekly basis.
Longer kitchen passes are also available on a quarterly, bi-annual or annual basis. The shared kitchen pass can start as low as RM900 per person per month that includes all utilities.
You can also rent your own private studio that comes in two sizes. The rental for the private studios start at RM3,000 per month. Those who hold longer passes and studio rentals can gain B2B purchasing services, storage facility rental, resident privileges and special prices when they do training or any activities in-house.
As Cookhouse is up and running, they already have a few restaurant operators and food entrepreneurs that have signed up for their facilities.
This includes Halo Doughnut (Instagram @halodoughnut) which sells artisanal sourdough doughnuts. Originally based at home during the MCO, Halo Doughnut moved in early June.
According to Huen, their sales have grown quickly as they could capitalise on hired kitchen help and the use of bulk production equipment. This has also paved the way for Halo Doughnut’s pop-up store to be held at the end of July.
The latest person to join the Cookhouse is Darius Seitfudem who used to be the Chef de Cuisine at Hilton Kuala Lumpur. He has launched his venture Syndicate TOD (Instagram @syndicate.tod) that delivers five-star, frozen ready-to-eat meals to your home.
Some of the Cookhouse residents include established brick and mortar eateries like Warung Wok which specialises in Kelantanese food and Humble Chef that is well known for their value-for-money meals.
Others like The Bao Specialist which makes baos, Chan who specialises in Korean side dishes and various paste producers and bakers utilise Cookhouse as a production kitchen.
For Focus, their concept is a smart cloud kitchen which will house 25 individually segregated kitchens.
Focus Executive Director Benson Tay intends to create a seamless, automated and end-to-end co- working kitchen platform for their tenants. There will be an array of facilities and features such as raw materials, kitchen equipment, maintenance services, security services, digital marketing solutions as well as packaging and delivery services.
Tay added that Focus will be launching their own supply chain of raw materials for the cloud kitchen which all tenants must utilise.
“This will be one of our highlighted features in providing convenience to our tenants. Any orders for rare or special ingredients can be placed through our supply concierge service that will be made available on our online platform.”
Focus intends to target freelance chefs, food entrepreneurs, hobbyists, restaurant owners and virtual restaurants. ”Our potential tenants are those who want to monetise their ardent passion and flair for cooking without the burden of hefty upfront capital,” said Tay.
Focus also said they will promote the menus of their tenants on all of the local food delivery apps.
As it is still early days for Focus’ cloud kitchen, no information is available on their rates but “we focus on flexibility and affordability for turning a profit. We intend to tailor all-inclusive full-service business packages to meet the different needs of our tenants.”
They also acknowledge that short term contracts are best suited for chefs.
In June also, Focus announced the appointment of Lambomove as their designated delivery partner. Tay explained Focus’ choice, “We have been working closely with Lambomove for Lavo’s food and e-commerce dealings. Moreover we have a good working relationship as they offer competitive pricing.”
Recently Lambo Group Berhad, Lambomove’s holding company also bought 22.79 million shares (or 1.11 percentage stake) in Focus for RM25.65 million on the open market.
The listed company cited the purchase as a strategic stake. In addition, another Lambo Group subsidiary, Lamboplace operates an e-commerce platform that is used by Focus to sell their wines.
As delivery radius can affect the food delivered, Focus has taken the stand that food from the cloud kitchen can only be delivered within a certain area.
Tay explained, “Our food delivery radius will be capped within a five to 10 kilometre radius from the location of our cloud kitchen as we are committed to quick delivery to ensure food is served hot and within the 30 minutes guaranteed.”
At Cookhouse, those who sign up with them are allowed to use any delivery partner they wish. Dependent on the delivery partner they use, the radius will be set accordingly.
As they have also partnered with Mr Speedy, their riders will be on standby to serve them. If not, a SoCar vehicle will be parked there for usage.
Moving forward, Focus has plans to create more cloud kitchens, provided their first one meets the occupancy rates and profitability markers set. “Our future expansion plans include targeting areas that fulfil the criteria of high food delivery demands, accessibility and affordability. The next targeted destination will be in the centre of KL,” said Tay.
For Cookhouse, there definitely will be more cloud kitchen sites on the horizon. On their website, they have earmarked areas such as Sri Hartamas, Sri Petaling, KL city centre, Kota Damansra and Jalan Klang Lama.
Huen confirms that these locations will be ready in about three months. She added, “We are planning for three more flagship outlets which will also feature event spaces and the others will just be straight-up cloud kitchens.”
Email: [email protected]
Tel: 03-7773 1755
Focus Dynamics Berhad
Email : [email protected]
Tel : 03-78037333/010-3222 888