CRG banks on cloud kitchens
Central Restaurants Group Co (CRG), one of the country’s leading quickservice restaurant chains, is ramping up its cloud kitchens, facilities built to produce food and drink specifically for delivery.
CRG plans to spend 500 million baht to open 100 cloud kitchens across the country in five years.
President Nath Vongpanich said it is embarking on the e-commerce market, opening full delivery service. The new business model will respond to consumer trends and increase chances to access a new target group in shifting to the online platform.
The company’s first cloud kitchen was opened on July 7 on Nakniwas Road, in Lat Phrao, an area known to have high demand for food delivery services. Another 49 branches are planned for Bangkok and suburban areas within 2022.
The remaining 50 cloud kitchens are scheduled to open during 2023-2024.
The company set its sights on raising sales from cloud kitchens to 1.5 billion baht or 10% of sales by 2024.
In addition to the expansion of cloud kitchens, Mr Nath said the company will continue opening its restaurants the rest of this year, with the number of total outlets under CRG reaching 1,100 this year, up from 1,067 last year.
He said 98% of its existing stores have already reopened, except branches in tourist destinations and airports. Sales are estimated at 10.5-11 billion baht this year, down from 12 billion last year.
As part of the new business model, CRG yesterday joined hands with Born Project Co, the operator of Krua Khun Toi, a popular TV variety show owned by emcee Tripop Limpapath that recommends dishes from more than 2,000 restaurants on Channel 3.
Under the partnership, customers can order from 2,000 restaurant chains selected by Krua Khun Toi. Each cloud kitchen will provide both food under CRG and chains recommended by the show.
“Cloud kitchens are a new platform for the F&B industry using e-commerce and delivery services, which both continue to grow,” Mr Nath said.
“The collaboration will also respond to the changes in consumer behaviour and lifestyles as the trend for online food and delivery services has increased in popularity recently and was accelerated by Covid-19.”
He said the outbreak has resulted in tremendous growth of the food delivery market in Thailand, with delivery services now an essential part of the food business.
The market is valued at 35 billion baht.
“With the collaboration, customers can place orders more conveniently and quickly, while restaurants that use the cloud kitchen can generate more income and acquire additional distribution channels at a lower cost. Moreover, we will have opportunities to expand and develop the business sustainably,” said Mr Nath.
According to TMB Analytics, the market value of e-commerce in 2019 was 163 billion baht. The pandemic has led to a massive shift to the online platform, resulting in e-commerce growth of 19% this year, an increase of 14.9 billion baht a month.