Expanding a food business is an exciting yet complex process. In Australia, the demand for food service is steadily increasing, with the online food delivery market alone projected to reach AUD 21.25 billion by 2025. There are currently over 27,400 restaurant businesses in the country, growing at a CAGR of 3.5% over the past five years. However, while the opportunities are vast, so are the challenges—rising operational costs, strict regulatory requirements, and shifting consumer behaviours all play a role in determining the success of an expansion.
For food business owners, the key question is: what’s the most effective way to scale without overcommitting resources? Whether it’s opening a larger production facility, optimising workflows, or leveraging cloud kitchen models, expansion must be strategic, cost-effective, and sustainable. In this article, we’ll explore the critical considerations for growing your food business in Australia.
1. Understanding Your Growth Potential
Before expanding, assess whether your business is truly ready to scale. Review sales trends, customer demand, and operational capacity to determine the right time to grow. If you’re consistently hitting production limits, receiving frequent delivery orders, or seeing strong demand for new locations, expansion may be the next step. However, if growth is seasonal or tied to short-term trends, a flexible approach—such as shared kitchen spaces—might be more practical.
Scaling also comes with financial and logistical risks. Traditional expansions involve high upfront costs, while central production units provide a lower-risk alternative, enabling businesses to grow without heavy investment in real estate or equipment.
2. Choosing the Right Expansion Model
Food businesses in Australia typically expand by opening a new location, increasing production capacity, or using cloud kitchens for delivery-focused growth. Each model has advantages and challenges.
A traditional expansion—such as opening a restaurant or larger facility—requires significant capital for property, staffing, and equipment. While ideal for established brands, it can be risky for smaller operators. Cloud kitchens, on the other hand, offer a cost-effective way to scale delivery operations quickly. With lower overheads and shorter setup times, this model allows businesses to expand without the complexities of running a full-service restaurant.
3. Streamlining Your Production & Operations
Efficiency is critical when scaling a food business. Poor kitchen layout, manual processes, or inefficient workflows can slow production and drive up costs. Investing in smart kitchen technology—such as automated cooking stations, cloud-based order systems, and AI-driven inventory tracking—can improve efficiency while reducing waste and labour costs.
Beyond technology, optimise workflows. Central production units consolidate preparation tasks, ensuring consistency and cost savings. This is particularly valuable for businesses with multiple locations or a delivery-first model.
4. Cost Considerations & Financial Planning
Expansion requires careful budgeting. In Australia, opening a new restaurant can cost around AUD 650,000, depending on location and size. These high costs make alternative expansion models, such as cloud kitchens and central production units, a more affordable low-CAPEX option.
To ease the financial strain, food businesses can explore instant asset write-offs, small business tax incentives, and industry-specific grants. Government initiatives such as the Business Growth Fund and regional development grants may provide financial support for eligible businesses. Carefully plan both fixed and variable costs, along with tax benefits and funding opportunities, for a financially sustainable expansion.
5. Meeting Australian Compliance & Safety Standards
Expanding a food business in Australia means navigating strict food safety and workplace compliance laws. National regulations are set by Food Standards Australia New Zealand (FSANZ), but additional state-based requirements must also be met. Ensure proper licensing, allergen management, and food handling procedures to avoid fines or operational delays.
Workplace safety is equally important. Safe Work Australia enforces regulations on staff well-being, including ventilation, fire safety, and ergonomic kitchen design. Expanding businesses can streamline compliance by using pre-approved, fully compliant kitchen spaces, reducing setup time and regulatory hurdles.
6. Leveraging Delivery & Digital Growth
With over 7 million Australians using meal delivery services every three months, digital-first strategies are essential for food businesses looking to expand. A strong online presence through Uber Eats, DoorDash, Menulog, or direct-order platforms can drive significant revenue growth.
Optimising for delivery involves more than just partnering with aggregators. Strategic location selection, efficient packaging, and seamless order management systems all contribute to profitability. Cloud kitchens, designed for delivery fulfilment, provide an operational edge, ensuring faster service and optimised logistics.
7. Future-Proofing Your Business
Expansion isn’t just about growth—it’s about sustainability. Consumer preferences are shifting towards plant-based menus, eco-friendly packaging, and AI-driven kitchen automation. Businesses that embrace these trends will stay ahead of the curve.
Sustainability is also a growing priority. New Australian regulations on packaging waste and food sustainability are reshaping the industry. Investing in eco-friendly operations, reducing food waste, and exploring alternative proteins positions businesses as forward-thinking and competitive.
The Future of Food Business Expansion in Australia
Expanding a food business in Australia requires strategic decision-making, financial planning, and an adaptable growth model. Whether you’re scaling through traditional expansion, optimising production, or leveraging cloud kitchens, success depends on balancing costs, efficiency, and market demand. Businesses that invest in smart kitchen technology, streamlined workflows, and digital-first strategies will be best positioned for sustainable growth.
If you’re a food operator looking for a cost-effective, flexible way to scale, production kitchens provide a powerful solution. At Chef Collective, our fully equipped kitchens enable businesses to expand into new markets without the financial burden of traditional fit-outs. By reducing overheads and ensuring compliance with food safety regulations, these spaces offer a low-risk, high-reward expansion model.
Ready to take your food business to the next level? Explore our production kitchens today!
