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Singapore’s F&B Sector Assisted by Digitalisation Relief Fund

A Singapore food tech company and digital restaurant group have launched a restaurant relief fund worth over USD 700,000 in support of local restaurants. The fund will go towards helping restaurants and bars take advantage of underutilised kitchens to boost delivery revenues, the company said via news reports.

Established in 2020, the food tech company operates and manages 45 delivery optimised digital restaurant brands, which cook from the company’s restaurant as well as a network of partner restaurants. The fund will allow bars and restaurants to come on board as the tech company’s partner kitchen, with zero upfront costs. Bars and restaurants previously focused on dine-in will be able to seamlessly pivot their traditional business models by becoming cloud kitchens.

This will allow them to create parallel income streams through the addition of curated delivery-optimised brands, fulfilled through the partners’ kitchen. The tech company will also assist restaurants in optimising the productivity of staff, rent and equipment.

Existing partner kitchens are enthusiastic about the increased revenue and better margins they have achieved, the tech company said. The incremental profits from the tech company’s partner brands helped them retain staff and pay rent, they added.

With unpredictable dining regulations and enforced limits on restaurant capacity and entertainment in Singapore, the tech company said that they recognise the past year has been extremely difficult for Singapore’s local F&B community. In a spirit of solidarity, their inaugural restaurant relief fund aims to help the hard-hit industry adapt to a time of increased deliveries and self-pickups.

A report that Enterprise Singapore reproduced says that while cloud or ghost kitchens are not new in Singapore, the opening of more facilities has been accelerated by the COVID-19 pandemic as more people get used to ordering food delivery.

Food and beverage (F&B) businesses are expanding their reach by setting up in these kitchens across the island. This also reduces waiting time for customers. Some companies use cloud kitchens for research and development, others to test the market for new concepts. The latter has spun off another rising trend for virtual delivery-only brands that have no physical shop front.

This is a relatively new business model and F&B companies must consider additional third-party fulfilment costs and a revenue limited by the delivery-only model. Nevertheless, if done right, the companies can potentially expand their presence more quickly and more cost-effective via the setup of virtual restaurants in cloud kitchens said the agency.

With more options available, cloud kitchen operators also observe people ordering across various brands from the same site in a single order.

A cloud kitchen operator with a social enterprise model borne from the circuit breaker is looking to have 50 kitchens across Singapore. Its flagship launched in August at the YMCA of Singapore and houses nine brands. Unlike other cloud kitchen operators, the cloud kitchen operator covers the kitchen’s rent and manpower. Businesses must provide only ingredients and training for kitchen staff.

The F&B sector is getting used to the concept of cloud kitchens and it has become a new normal since the pandemic outbreak. The cloud kitchen operator has a unique model because they have their manpower rather than a landlord-tenant relationship in most cloud kitchens, said the company.

Experts say that big-name or unique brands can stand out from the pack. Cloud kitchens can have their respective distinct flavours and identities that people are familiar with and more likely to order from.

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