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Food & Beverage

Thai fast-food chain operator to open 100 'cloud kitchens' by 2024

Central Restaurants aims to take large slice of $1.1bn food delivery market

Thailand's Central Restaurants, which runs more than 1,000 fast-food outlets, is expanding its delivery services by setting up "cloud kitchens" across the country.

BANGKOK -- Thailand's leading fast-food restaurant chain, Central Restaurants Group, will set up 100 "cloud kitchens" across the country within five years to strengthen its food-delivery business and capitalize on growing demand following the new coronavirus outbreak.

Cloud kitchens are centralized hubs for food preparation and delivery. Central Restaurants, a unit of retail-to-hospitality conglomerate Central Group, said Monday that the company had opened its first cloud kitchen in Bangkok's Lad Phrao district last week.

"Delivery services [have] become an essential part of the food business in the present day," said Central Restaurants President Nath Vongpanich. Cloud kitchens "will help strengthen the delivery service business," he said.

According to Nath, Thailand's food-delivery services generate 35 billion baht ($1.1 billion) in sales annually and are growing rapidly. Central Restaurants expects revenue of 1.5 billion baht from delivery services by 2024, equal to 10% of the company's current total.

TMB Bank's research unit, TMB Analytics, said recently that Thai consumers are increasingly shifting their shopping to online platforms, spurring the growth of food delivery and cloud kitchens. These services are likely to be a key driver for the broader e-commerce market in Thailand, which is forecast to grow by 19%, or 87.7 billion baht this year.

Central Restaurants' "cloud kitchens" prepare a variety of dishes in central hubs to make preparation and delivery more efficient. (Photo courtesy of Central Restaurants)

Central Restaurants operated 1,048 outlets as of March, including those of big international fast-food brands Kentucky Fried Chicken, Mister Donut, Cold Stone Creamery, Yoshinoya and Ootoya.

The company plans to set up 50 cloud kitchens in the first phase of its expansion by 2022, with the first 10 to be open in the capital this year. By 2024 it expects to have spent 500 million baht to open 100 cloud kitchens.

Such centrally located kitchens are on the rise across Southeast Asia. Singapore-based ride-hailing service Grab and Indonesian unicorn Gojek are already in the business, while Jollibee Foods, the largest fast-food chain in the Philippines, in May announced plans to spend 7 billion Philippine pesos ($141 million) to open cloud kitchens to meet growing demand for deliveries.

Central Restaurants has partnered with another major local restaurant chain, Krua Khun Toi, for the delivery service. Central Restaurants' cloud kitchens will prepare and deliver Krua Khun Toi meals to customers. The deal will allow Central Restaurants to reduce idle capacity at its kitchens and generate commissions from its partner.

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