Cloud kitchens, also known as dark or ghost kitchens, are transforming the food and beverage (F&B) environment in the Middle East and North Africa (MENA). With the region's online food delivery industry assessed at $18 billion in 2023 and predicted to expand yearly, cloud kitchens and virtual brands are gaining traction with restaurants, suppliers, and investors alike. But what is driving this growth in the Middle East and North Africa, and how are cloud kitchens serving the market's specific needs? Here's an in-depth look at how they're changing the F&B environment in MENA.

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What Are Virtual Kitchens?

Picture a kitchen exclusively dedicated to cooking meals for delivery, with no dine-in options, waitstaff, or a visible street-facing location. It's a cloud kitchen. These kitchens create meals for many brands and rely entirely on internet orders, making them an effective strategy in heavily populated cities.

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Virtual kitchens gained momentum in the Middle East and North Africa during the epidemic as food delivery increased. Even after the limitations were loosened, these kitchens continue to thrive. Why? Because they provide unmatched flexibility and cost savings. For example, they need less real estate, which is vital in high-cost places like Dubai, Abu Dhabi, and Riyadh. And in a market where 35% of consumers order food online at least once a week, ghost kitchens offer restaurants an effective way to reach customers without the overhead of a dine-in space.

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Why Are Virtual Kitchens So Successful in MENA?

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1. Cost-effectiveness in High-Rent Cities

Real estate is expensive in countries like Dubai and Riyadh, and restaurant rent can be a considerable barrier to entrance. Virtual kitchens avoid this issue by operating from less visible, lower-cost locations. According to a Knight Frank research, Dubai's premium retail rates are among the costliest in the world, making ghost kitchens an appealing alternative. 

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2. Young, Tech-Savvy Population

MENA has one of the world’s youngest populations, with high smartphone penetration rates and a strong digital culture. A recent study by Mastercard found that 70% of MENA consumers now prefer online ordering, making cloud kitchens an ideal way to meet the digital-first demands of this audience.

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3. Growing Demand for Convenience and Variety

In the Middle East and North Africa, convenience reigns supreme. Busy urbanites and expats are increasingly seeking quick, diversified solutions that respond to their own preferences. Ghost kitchens may quickly adjust to these needs by serving several cuisines under one roof in order to attract diverse market groups.

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Power of Virtual Brands in MENA

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Virtual brands enable existing restaurants to experiment with new cuisines without the risk of opening a real location. For example, a Lebanese restaurant may use a virtual brand to try a vegan Mediterranean idea, or a successful fast-food company could create a digital-only dessert menu.

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Here are a few MENA-based examples of how virtual brands are thriving:

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Kaykroo 

Kaykroo is a leading cloud kitchen platform in the UAE and Saudi Arabia that hosts several virtual brands, each targeting different cuisines and customer segments. From “Bun Fight” to “Biryani Pundits," Kaykroo leverages multiple brands to cater to diverse tastes.

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Kaykroo's concept enables them to provide a diverse range of cuisines without the need for separate physical sites, therefore addressing the huge demand for delivery in key MENA cities. Kaykroo uses KASO's platform to enable seamless buying and supplier management, allowing each brand to focus on quality and speed of delivery. 

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KLC Virtual Brands

KLC, another prominent cloud kitchen operator in MENA, runs brands such as “Go! Greek” and “Noodle Station." Each brand offers a unique menu tailored to specific culinary preferences, all delivered through digital platforms. KLC uses Kaso’s technology for streamlined order management and efficient supplier integration. KLC illustrates how cloud kitchens can leverage supplier management solutions like Kaso to quickly grow and provide a personalized experience to customers in a delivery-first market.

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Challenges for Cloud Kitchens in MENA

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Dependence on Delivery Platforms

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Cloud kitchens in the MENA region rely significantly on third-party delivery applications like as Talabat, Zomato, and Deliveroo. These applications impose fees ranging from 20 to 35 percent, which can have an impact on profitability, particularly for smaller virtual firms.

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Cultural expectations

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MENA consumers have high expectations for food quality, presentation, and consistency, which is impacted by the region's longstanding eating tradition.To sustain consumer loyalty, cloud kitchens must negotiate these expectations, which frequently necessitates the investment in specific packaging and quality control procedures.

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Opportunities for Suppliers 

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For suppliers, the cloud kitchen model presents a unique growth opportunity in MENA. With multiple virtual brands operating from single locations, the demand for fresh ingredients, innovative packaging, and efficient logistics has soared. According to the Dubai Chamber of Commerce, demand for food services in MENA is set to grow by 6% annually, driven by rising urbanization and young populations. Suppliers who can offer quick, reliable, and scalable solutions are poised to thrive in this environment.

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Additionally, the shift towards eco-friendly packaging is a major trend in the region. Many cloud kitchens now prioritize sustainable packaging to cater to the environmentally conscious, a growing segment among the MENA consumer base. Suppliers offering compostable or biodegradable packaging options are especially attractive.

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Cloud kitchens and virtual brands are transformative business models that align with the region’s demand for convenience, variety, and digital accessibility. For suppliers and restaurants looking to remain competitive, the question isn’t if they should consider ghost kitchens, but when and how they’ll leverage this model. Could a virtual brand be your next revenue booster in the region? Or, as a supplier, are you prepared to meet the growing demands of these agile kitchens?