KaaS – The backbone of Dark Kitchens?
UAE online food delivery is expected to grow by a CAGR of 23% with rising penetration of dark kitchens
1. Overall UAE online food delivery is expected to grow by a CAGR of 23% with rising penetration of dark kitchens
Firstly, a glimpse of the dark kitchens market. Our forecasts indicate that UAE online food delivery is expected to continue its rise post the COVID tailwinds. The number of brands and locations has also risen since our last newsletter as there are now 400+ brands and 80+ locations in the UAE. We anticipate dark kitchens’ penetration to double as the online food delivery matures with incumbents and new players increasingly adopting the services of dark kitchens.
2. KaaS currently serves various restaurant partners and is likely going to serve other dark kitchen models with their infrastructure needs
All the dark kitchen models call for a cost-efficient method of food preparation either for themselves or the brands they serve. This is where KaaS brings in its value proposition, where it not only caters to brands with its distributed operation’s cost setup but also helps other dark kitchens to focus on broader aspects of their offerings while leaving the kitchen setup and operations to KaaS. The dark kitchens can (either themselves or via their brands) focus on meal preparation, branding & marketing, and logistics while the backend operations are handled by a KaaS player.
Therefore, KaaS will act as the physical base of operations upon which the other models will build their peripheral operations.
This will enable KaaS to grow its share by ~2.2X becoming the dominant model in the overall dark kitchens market, making it a backbone of the dark kitchens business.
3. Among the restaurant’s owners, mid-sized and independent restaurants have expressed their interest in the KaaS Model
While restaurants are aware of the modus operandi and availability of dark kitchens, their inclination is more towards the satellite kitchens and the KaaS model.
A casualty of the pandemic, the restaurants are wary of heavy investments to increase their operations. KaaS enables a cost-efficient method to test out new geographies and brands for the restaurants. This serves the aspiration of restaurants that may not be able to afford the real estate and other associated costs if they follow the traditional route.
Online food delivery adoption by restaurants and consumers, Post-COVID
- Restaurants categorized basis count of establishments under the same owner. Independent restaurants has three or less establishments. Mid size restaurants have more than three and up to ten establishments. Large restaurants have more than ten establishments.