Boosting the Culinary MSME Business through Cloud Kitchen and Food Delivery

The pandemic has become an attractive momentum for MSME players in the Indonesian food and beverage (F&B) sector. Although many have fallen, the contribution of startups as enablers is one factor in how businesses in this sector can survive.

Based on a report released by LPEM FEB UI and UNDP Indonesia in 2020, 40% of MSME entrepreneurs are in the food and beverage sector.

On the gender side, MSMEs owned by women mostly produce food and beverages. On the other hand, only 20% of MSMEs owned by men are engaged in the food and beverage sector.

The existence of a cloud kitchen, as a support for the food delivery business, is considered to help the business growth of MSME players. DailySocial tries to see how the contribution of cloud kitchen platforms, such as Yummy Corp and Dailybox.

Long-Term Positive Impact

The growth of the cloud kitchen industry in Indonesia is supported by an increase in online food orders in line with shifts in consumer behavior, especially during the pandemic.

Based on Momentum Works research, restaurants and food delivery platforms are spending more time in 2021 experimenting with new business models, one of which is cloud kitchens.

The research states that cloud kitchens help restaurants and culinary business actors to increase their total revenue (topline) through a wider reach of consumers.

Cloud kitchen is also claimed to offer easy capital flexibility with a choice of rental times that can be arranged as needed. This concept also makes it easy to quickly change the concept and type of food/menu.

One of the leading players in Southeast Asia, Grab, sees a huge opportunity for the cloud kitchen industry to grow and reach more consumers in Indonesia.

The GrabKitchen service is Grab’s way of introducing the cloud kitchen concept to empower merchant partners.

Collaboration with cloud kitchen platforms, for example between Grab and Yummy Corp, is claimed to help F&B businesses that join this network gain comprehensive support to develop and launch virtual restaurants and staff recruitment and training to operate cloud kitchens.

Currently, Grab has more than 45 cloud kitchens located in 8 cities (Jakarta, Bandung, Bali, Medan, Surabaya, Makassar, Surakarta and Malang) in Indonesia. “The combined expertise of Grab and Yummy Corp can accelerate the development of the cloud kitchen sector in Indonesia,” said Hadi.

Yummykitchen, Yummy Corp’s cloud kitchen platform, this year has provided a 30% slot for MSMEs. Currently, Yummy Corp. has more than 60 brand partners. Yummy Corp. as a platform is actually more accurately said to be a partner.

“We are here to help each other so that the F&B ecosystem in Indonesia is equally advanced. It can be said that the F&B ecosystem in Indonesia is quite developed and Yummy Corp will continue to develop this ecosystem by strengthening the technology and human resources we have,” said Yummy Corp CEO Mario Suntanu.

Synergy with MSMEs

The pandemic has accelerated the phenomenon of synergy between culinary MSME actors with food delivery services and cloud kitchens. This synergy is called helping culinary SMEs to develop and sell faster, because the costs required tend to be smaller and the time needed to build infrastructure is shorter.

“MSMEs are an important pillar for the Indonesian economy. The contribution of this sector to Indonesia’s GDP is more than 60%. MSMEs are even able to absorb 97% of the total workforce. This makes this sector very attractive to work on,” said CEO of Dailybox. Kelvin Subowo.

On the other hand, as a new player, the presence of ShopeeFood is claimed to provide income opportunities that can have a long-term positive impact for partners.

“Currently, our focus is on supporting the growth of the digital economy in Indonesia by embracing more culinary businesses, especially MSME players, users, and driver partners to maximize the use of digital services in their daily lives,” said Andreas Christiadi, ShopeeFood’s Brand Marketing Manager.