The Philippine food delivery market is growing exponentially (~48 per cent y-o-y growth), the fastest in Southeast Asia, and is projected to hit US$8 billion by 2025. This growth is attributed mainly to the pandemic. With many of the country’s major cities still under lockdown and the resumption of dine-in services is uncertain, customers prefer ordering food online and have it home-delivered.
This is where cloud kitchens fit in. Also called ‘ghost kitchens’, ‘shared kitchens’, or ‘virtual kitchens’, cloud kitchens are commercial facilities purpose-built to produce food specifically for delivery.
The cloud kitchen industry is still in its early stages in the Philippines when compared with fast-growing markets such as the US, the Middle East, and India, and even neighbouring Singapore and Indonesia. It is not surpising as the food delivery ecosystem itself is relatively young in the Philippines, where the first delivery firm to enter the market was foodpanda in 2014 — just seven years ago.
“Cloud kitchen also became a strong avenue for both F&B and delivery companies alike to experiment with new F&B concepts. The pandemic accelerated this natural evolution and brought forward that timeline as extended lockdowns created new consumption habits in consumers for delivery-based orders — be it for F&B brands that they are already familiar with or to try out new food concepts to beat the boredom during lockdowns. In fact, many popular F&B brands today in Southeast Asia are born out of cloud kitchens and never ever saw a retail outlet identity,” says Yiping Goh, Partner at Quest Ventures.
“We are already in talks with several players in the Philippines and Thailand and feel that they are only one or two years behind Indonesia and Singapore. The trajectory shows that they will also grow rapidly as demand from both F&B brands and consumers are surging in these regions as well,” says Goh of Quest Ventures.