The Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market size is expected to reach US$ 13.89 billion by 2030, from US$ 4.16 billion in 2023, at a CAGR of 18.8% during the forecast period.
Dark kitchens, also known as cloud kitchens or ghost kitchens, are delivery-only kitchens with no dine-in facility. They are professionally equipped spaces designed only for preparing food for online delivery. The growing demand for online food delivery and the cost benefits for restaurants are the key factors driving the growth of the Europe dark kitchen market.
The Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market is segmented by business model, type, nature of kitchen, and region. By business model, the market is segmented into fully equipped kitchens, semi-equipped kitchens, bring your own kitchen, and kitchen as a service. The fully equipped kitchens segment accounts for the largest market share due to the high investments by cloud kitchen companies in setting up fully fitted kitchen spaces.
Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market Drivers
- Surging demand for online food delivery services: The rapid growth of online food delivery platforms like Deliveroo, Just Eat, Uber Eats has created a huge demand for online food delivery services across Europe. Working professionals, students, and young urban consumers increasingly prefer to order food online owing to benefits like convenience, variety, and promotional discounts. Dark kitchens allow restaurants to cater to this burgeoning online delivery demand without the need for expensive dine-in real estate. By focusing only on delivery, dark kitchens can optimize operations and costs to serve the online ordering boom. The COVID-19 pandemic has further accelerated the shift to online delivery, as seen by the sharp growth in orders for platforms like Just Eat during lockdowns. This long-term shift towards online food delivery provides a major driver for dark kitchen growth in Europe.
- Cost-effectiveness and convenience for restaurants: Dark kitchens reduce overhead costs by eliminating dining rooms and focusing solely on delivery-based meal preparation. For restaurants, setting up a delivery-only dark kitchen is around 50-70% cheaper than the cost of leasing and operating a traditional dine-in restaurant outlet. Eliminating front-of-house expenses like wait staff allows restaurants to operate on leaner budgets. Dark kitchens also offer convenience benefits like easy location switching and ability for restaurant chains to expand into new areas quicker. By providing cost and operational advantages, dark kitchens incentivize restaurants to shift towards delivery-only models thereby driving market growth.
- Partnerships with food delivery platforms: Dark kitchen operators are collaborating with major online food delivery platforms like UberEats and Deliveroo to drive utilization and scale. Food delivery platforms provide dark kitchens with a ready customer base, digital ordering interface, and delivery fleet. In return, dark kitchens expand the cuisine choices and order volumes for delivery platforms. Strategic partnerships create a mutually beneficial ecosystem that promotes dark kitchen proliferation. For instance, Travis Kalanick's CloudKitchens has partnered with UberEats for its ghost kitchen expansion across the US and Europe. Such partnerships provide a solid foundation for dark kitchen growth.
- Supporting expansion of virtual restaurant brands: Dark kitchens are playing a pivotal role in enabling the emergence of virtual restaurant brands - brands that exist only for online ordering without physical locations. By providing a low-cost shared kitchen environment, dark kitchen operators like Kitopi are allowing virtual brands to quickly test new concepts at scale. Virtual brands maximize utilization of kitchen space and provide more menu choices for customers. With their emphasis on online brand building, virtual restaurant brands are thriving in the dark kitchen model. Their growth and innovation adds momentum to the overall market.
Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market Report Coverage
||Market Size in 2023:
||US$ 4.16 Bn
|Historical Data for:
||2017 to 2021
||2023 - 2030
|Forecast Period 2023 to 2030 CAGR:
||2030 Value Projection:
||US$ 13.89 Bn
- Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
- By Business Model: Fully Equipped Kitchens, Semi-Equipped Kitchens, Bring Your Own Kitchen, Kitichen as a Service, Order Management & Delivery
- By Type: Independent Cloud Kitchen, Commissary/Shared Kitchen, Kitchen PODs, Food Trucks, Incubator Kitchens, Others (Mobile Kitchens, Kiosk)
- By Nature of Kitchen: Franchised Cloud Kitchen, Standalone Cloud Kitchen, Chain Cloud Kitchen, Virtual Restaurant
- By Offering: Food Preparation, Order Management, Food Delivery, Marketing, Data Analytics, Others
Deliveroo, Uber Eats, Just Eat, Kitchen United, Kitopi, Travis Kalanick, Karma Kitchen, Kitchen Hub, REEF Technology, DoorDash
- Surging demand for online food delivery services
- Cost-effectiveness and convenience for restaurants
- Partnerships with food delivery platforms
- Supporting expansion of virtual restaurant brands
|Restraints & Challenges:
- High real estate and operating costs in urban locations
- Increasing regulatory scrutiny and food safety concerns
- Talent acquisition and retention challenges
Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market Opportunities
- Untapped potential in smaller cities and towns: While dark kitchen adoption has been high in major urban centers, smaller towns and suburban areas still present an untapped opportunity. Operating delivery-only kitchens gives restaurants a viable model to enter Tier 2 and Tier 3 cities without large upfront costs of establishing dine-in outlets. Support infrastructure like cold storage and transport facilities is also improving in smaller cities, making the dark kitchen model more feasible. Dark kitchen players can leverage this untapped potential by partnering with localized food chains and aggregators to expand into new geographies.
- Innovative kitchen models like food trucks and kiosks: Companies are experimenting with smaller, more agile dark kitchen models like food trucks and kiosks situated in high footfall areas like malls and office parks. Food trucks provide on-the-go access to consumers in areas with limited restaurant options. Kiosks can be rapidly set up across neighborhoods as nano dark kitchens tailored for quick delivery. These innovative formats allow dark kitchen services to penetrate new locations in a low-cost, flexible manner. Their adoption can be scaled up to tap into new customer segments and use cases.
- Focus on health-focused meal choices: There is a growing consumer preference for healthy, hygienic, home-cooked meals, especially post COVID-19. This presents an opportunity for dark kitchens to cater to this demand by offering wholesome regional cuisine, customized diet meals, salad bowls etc. that are freshly prepared. Developing own health-focused brands or collaborating with specialty chains can help dark kitchens tap into the premium segment and enhance profit margins.
- Leveraging technology for operational efficiency: Dark kitchens can leverage emerging technologies like IoT, AI, and robotics to drive greater efficiency through automation in production, inventory management, and delivery. For instance, automated guided vehicles can transport food between different kitchen workstations. Demand forecasting algorithms can optimize staffing and stock levels. Adoption of such smart technologies can help dark kitchens achieve higher throughput and scalability.
Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market Trends
- Focus on sustainable packaging and waste reduction practices: With rising environmental awareness, customers and regulators are demanding sustainable practices in food services. In response, dark kitchens are increasing the use of eco-friendly, biodegradable packaging materials made from natural sources like bagasse and plant starch. They are also optimizing food waste management through partnerships with recycling organizations and localized sourcing. Following green practices helps dark kitchens position themselves as environmentally responsible delivery partners.
- Use of advanced marketing techniques for customer acquisition: Dark kitchen brands rely heavily on digital platforms for customer outreach and retention. They are deploying advanced techniques like geofencing, social listening, conversational marketing and hyperlocal ads to find and engage relevant customers. Data analytics helps identify customer preferences and tailor promotional offers. Social media engagement builds brand awareness and loyalty. These marketing techniques will assume greater importance as competition increases.
- Cloud kitchens offering pick-up and takeaway options: While delivery remains the core service, some cloud kitchens are also offering pick-up and takeaway options for flexibility. Customers can order online and pick-up meals on their way home from work to avoid delivery fees. This provides an alternative revenue stream while deepening customer convenience. Offering pick-up also creates opportunities to cross-sell impulse purchases of beverages, snacks etc.
- Use of ghost kitchens to test and validate new food concepts: Food brands are leveraging ghost kitchens to rapidly prototype and test innovative dining concepts at low risk and cost. Customer feedback helps fine-tune offerings prior to scaling up. This allows brands to double down on successful concepts and avoid large investments in failed ideas. The test kitchen approach enables faster product development cycles.
Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market Restraints
- High real estate and operating costs in urban locations: While less expensive than restaurants, setting up dark kitchens in prime urban locations still involves high real estate costs in Europe. Operating expenses like rent, staffing, ingredients also remain substantial though margins are thinner due to intense competition. High costs can make profitability challenging without very high order volumes, restricting growth for smaller brands.
- Increasing regulatory scrutiny and food safety concerns: Regulators have started framing guidelines and protocols specifically for dark kitchens to ensure food quality, hygiene and safety. Different kitchens in a shared space need dedicated equipment and strict practices to avoid cross-contamination. Lack of dine-in customers also reduces oversight. Adapting operations to comply with evolving regulations raises costs. Slow regulatory approval can also delay market expansion.
- Talent acquisition and retention challenges: Dark kitchens require specialized staff like skilled chefs, inventory personnel, delivery fleet etc. Acquiring and retaining talent is challenging considering the high workload and low margins. Many also depend on gig workers which leads to variable service levels. High staff churn impacts service consistency and training costs. These workforce related challenges put a brake on the sector's growth.
New product launches
- In March 2022, Travis Kalanick’s CloudKitchens launched FoodStars, a new fast food delivery-only brand operating 200 ghost kitchens across the US. This expands CloudKitchens' portfolio into the value-meal category.
- In January 2021, Deliveroo launched Editions sites across the UK, large delivery-only kitchen spaces housing multiple restaurant brands under one roof. This expands Deliveroo's ghost kitchen presence.
- In June 2020, Uber Eats launched over 1,000 virtual kitchens in Europe, the Middle East and Africa to meet rising food delivery demand. This strengthens Uber Eats' delivery infrastructure.
Acquisition and partnerships
- In April 2021, Flipdish partnered with Delivery Hero to integrate its online ordering system with Delivery Hero's platforms across Europe. This expands Flipdish's presence in Europe.
- In March 2020, Travis Kalanick acquired UK cloud kitchen company FoodStars for $5 million to enter the European market. This supports CloudKitchen's European expansion.
- In January 2020, Kitopi acquired qkomm, a UAE-based last-mile delivery platform, to strengthen its delivery capabilities in the region.
Figure 1. Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market Share (%), by Offering, 2023
Top companies in Europe Dark Kitchens/Ghost Kitchens/Cloud Kitchens Market
- Uber Eats
- Just Eat
- Kitchen United
- Travis Kalanick
- Karma Kitchen
- Kitchen Hub
- REEF Technology
- Restaurant Brands International
- Virtual Kitchen Co.
Definition: Dark kitchens, also known as cloud kitchens or ghost kitchens, refer to professional commercial cooking facilities designed specifically for food preparation and delivery. They have no dine-in facility and operate only as delivery-only kitchens. Dark kitchens allow restaurants and food brands to expand their delivery operations to meet the rising consumer demand for online food ordering and delivery. By eliminating the costs associated with front-of-house dining spaces, dark kitchens offer a low-cost way for food businesses to enter new markets and scale up delivery operations. The Europe dark kitchens market is driven by the growth in online food delivery, partnerships between dark kitchen operators and food delivery platforms, and the cost benefits for restaurants. Key players in the Europe market include Deliveroo, Uber Eats, Just Eat, Travis Kalanick's CloudKitchens, Kitopi and more. With urbanization and digitalization leading to an on-the-go culture, dark kitchens are poised for rapid growth across Europe.
Few other promising reports in Consumer Goods Industry
Labor Productivity Tracking Market
Storage Basket Rack Market
Pedicure Unit Market
Disposable Shower Caps Market