How to open a cloud kitchen in the UK

The UK's restaurant sector is facing increasing pressure due to rising costs. The price of ingredients has surged, while energy prices are still well above their pre-pandemic levels. Staff shortages and increased demand for skilled workers have seen higher wages, squeezing restaurant profit margins and forcing many to rethink their business models. 

At the same time, the demand for food delivery is booming. The online food delivery market in the UK is projected to rise 7% per year up to 2029, according to Statista. It’s meant the number of cloud kitchens (also known as virtual restaurants or ghost kitchens) are on the rise. These innovative, delivery-only kitchens operate without the need for a physical dining space, paying rent for prime locations and front-of-house staff, or dining area upkeep.  
 
By focusing solely on food preparation and delivery, cloud kitchens can operate more efficiently and quickly. The marriage of digital technology and convenience continues to drive people towards eating in rather than out, with cloud kitchens offering a flexible and cost-effective solution for restaurateurs looking to stay competitive. So, if you're a restaurant owner in the UK looking to capitalise on their success, here’s our guide on how to set one up. 

Understanding the concept and developing a business plan

A cloud kitchen operates without a physical dining space, focusing solely on food preparation and delivery. This is a digital-driven concept, allowing people to experience restaurant-quality food in their own homes through apps like Deliveroo. By cutting out the front-of-house costs, restaurant owners can offer a wider variety of cuisines, explore new concepts, and operate more flexibly. 
 
But before diving in, it’s crucial to conduct thorough market research. Understand your local competition, target demographic, and popular food trends in your area. Consider conducting surveys or focus groups to gauge consumer preferences. Cloud kitchens generally operate better with a higher density of population (KPMG stats from last year show that while a third of consumers UK-wide had one takeaway a week, that rises to 58% in London), or where there is a large group that use apps regularly, such as student campuses. 
 
Once you have a clear understanding of the market, draft a comprehensive business plan, outlining your business model, financial projections, marketing strategies and operation. Pay attention to your menu design; a streamlined, delivery-friendly menu can significantly enhance efficiency. 

Choosing the right location

The location of your cloud kitchen is pivotal, and not just because of proximity to your customers. While you won’t need a prime spot for foot traffic, you still need to consider accessibility for delivery drivers and general costs of renting the kitchen space. Look for commercial kitchen spaces in areas with high population density but with low rental costs such as industrial estates. Alternatively, some startups opt to lower their initial investment by sharing kitchen spaces, which also provides an opportunity to network with other food businesses. 

Setting up your kitchen

Opening a cloud kitchen in the UK requires compliance with food safety regulations and obtaining the necessary licences. You’ll need to register your food business with your local council, and ensure you meet hygiene standards set by the Food Standards Agency (FSA).   
 
When it comes to kitchen equipment, focus on what’s essential for your menu. Depending on your cuisine type, this might include ovens, fryers, grills, and refrigeration. If you’re operating in a shared kitchen space, many of these facilities will already be available. Consider investing in technology that can streamline your operations, such as kitchen display systems (KDS) that integrate with delivery platforms. 

Building a strong online presence

An effective digital marketing strategy is critical for the success of your cloud kitchen. Create a user-friendly website that showcases your menu, story, and contact information. Utilise social media platforms to engage with potential customers, share updates, and showcase your dishes. High-quality photos and engaging content can significantly boost your visibility. 
Additionally, partner with food delivery platforms like Deliveroo, Uber Eats, or Just Eat to expand your reach and simplify the ordering process for customers. Each platform has its own fee structure, so analyse these costs and factor them into your pricing strategy. 
 
Since cloud kitchens operate without a physical dining space, customer experience hinges on food quality and speed of delivery. Customers have choice and can be fickle, so make sure you gather customer feedback to work towards consistent 4 or 5-star ratings. Loyalty programs or promotions can also encourage repeat business and help form habits.  
 
Additionally, ensure your packaging keeps the food hot and contained but is also aesthetically pleasing. Some customers may mark you down if your packaging is bad for the environment. A recent survey showed that 57% of customers worry about single-use packaging for takeaway food. 

A food success story

Once established, you can explore ways to scale your operations. This might include expanding your menu or creating additional kitchen locations in different areas. Outside the confines of a restaurant kitchen, there is also room to be creative. Monitor market trends and customer preferences to adapt your business model accordingly, but don’t be afraid to try something new to test the market occasionally. 
 
Opening a cloud kitchen in the UK presents a unique opportunity for restaurateurs. With careful planning, a strong online presence, and a focus on quality, your cloud kitchen can find a niche to meet the growing demand for convenient, high-quality meals delivered straight to consumers’ doors. And as many have found in recent years, embracing change and adapting to consumers’ needs could be the route to success in the competitive landscape of the UK’s food industry.