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Taiwan startup JustKitchen rides the cloud kitchen boom

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Cloud kitchens are gaining popularity in recent years. Key players in the food delivery market such as Foodpanda and Deliveroo have changed the global food and beverages (F&B) scene at breakneck speed, and are now moving aggressively towards cloud kitchens.

The on-demand food delivery phenomenon is amplified with this year’s pandemic, when many opt to stay at home and order takeouts to avoid local transmission.

Deriving from the concept of cloud data platform, cloud kitchen, also known as ghost kitchen, refers to a centralized food production facility that has no physical dining areas and is built to produce food for delivery.

For business owners, cloud kitchen can not only dramatically reduce operating cost but also enhance efficiency and flexibility due to the automated sales process and an increased focus on food preparation.

According to a report by Allied Market Research, the global cloud kitchen market is estimated to reach NT$2,103 billion (US$71.4 billion) by 2027, almost doubling the amount in 2019.

In light of the growing potential of the market, five experienced F&B professionals in Taiwan jumped on the bandwagon and founded JustKitchen in June 2019.

With a central kitchen in Neihu – a neighborhood surrounded by mountains and temples on the outskirts of Taipei – as its base, JustKitchen adopts a hub-and-spoke model to provide rapid delivery of time- and temperature-sensitive food such as meat, cooked rice, and cut vegetables. There are currently more than 10 satellite kitchens near the city center.

The workers in the central kitchen in Neihu prepare ready-to-use ingredients and send them to satellite kitchens where workers there will create or reheat the dish and deliver it to the customer. It takes around 3-5 minutes to finish compiling an order, and most of the meals arrive at the customer’s doorstep within 20 minutes.

An inside look into a cloud kitchen.
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Liu Yang, chief strategy officer at JustKitchen, said that the cloud kitchen model allows them to focus more on food preparation. They can invest their time in creating new dishes and testing new menu items or even exclusive ingredients.

“To drive revenue and maintain day-to-day operations, a brick-and-mortar restaurant can usually only offer the top 20 most popular dishes," Liu said.

“Even though a customer might have off-menu food request that does not take a lot of effort to make it, the restaurant cannot fulfill that unless a certain amount of customers also have the same request.”

He added that JustKitchen creates a triple win for all the parties involved: consumers enjoy a wider variety of food, restaurant owners establish a stronger foothold in the city, and delivery platforms earn more from their service.

JustKitchen runs six virtual home brands and teams up with seven chain stores – including Bit Beef Noodle, Bodyfit Healthy Bento, Hot ones, Dan Ryan’s, K Bao, Smith & Wollensky Steakhouse, and LuWei Lab.

“Traditional, brick-and-mortar F&B brands can send us recipes that they want to explore but cannot achieve by themselves due to numerous economic reasons. Our chef can create the dishes in their names,” Liu said.

Looking forward, JustKitchen plans to partner with kitchenware suppliers to scale up the business and enhance flexibility for restaurants through turning cloud kitchen into co-working space where chefs can put their sole focus on the quality of food or new menus. They do not need to worry about food storage, purchasing and cleaning.

Liu hopes to open their second central kitchen, 15 satellite kitchens and 12 restaurant brands by 2021 to conclude whether the new restaurant model is feasible in Taiwan.

His colleague Tony De Graaf, who is JustKitchen’s chief operation officer, holds a more optimistic outlook towards the future of food delivery aggregators, according to HiNet.

“Looking at the data, one can immediately notice that food delivery service has been in high demand in Taiwan,” De Graaf said.

“I don’t think this is just a phrase. This business model is here to stay.”

Liu told Meet that he and his team are keen to expand JustKitchen internationally in 2022.

CSO Liu Yang (far left) CMO You Jun-Wen (left) and CTO Lin Hsiao-Cheng (right) showcased their product at SparkLabs Taipei’s demo day.
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In March, JustKitchen attended a demo day organized by the Silicon Valley-based seed accelerator SparkLabs Taipei and raised an undisclosed amount of pre-seed round from them, according to Tech in Asia and Crunchbase.