Delivery. It is the fastest-growing segment of the restaurant industry—outpacing dine-in by 300% since 2016. It’s a $35 billion industry, with the potential to grow to $1 trillion by 2030. More than half of all Americans order delivery at least once a week—a third twice a week. And this was all in motion before the coronavirus pandemic. During the pandemic, it is the only way for many to eat food from a restaurant, and the only way restaurants can survive is by looking for ways to claim their piece of the increasing large delivery pie. The tracks were laid before, but COVID-19’s devastating impact on the restaurant business has us looking full-steam ahead towards the future of dining: and ghost kitchens and virtual restaurants.
Ghost kitchens have been around in varying forms for years and share some DNA with the commissary kitchens that have aided caterers and bakeries for decades. Essentially, they are restaurant kitchens entirely detached from restaurants. There’s no host stand, no seating, no customer-facing space. Just a kitchen, some tablets for orders, and a pick-up window for delivery drivers. Where there is one, there are usually many—multiple kitchen units within one warehouse or industrial building. They also take the form of kitchens inside shipping containers and trailers. From the outside, you would have no idea that there were kitchens inside of them. In a dining landscape where delivery is king, who needs the rest of the restaurant, anyway.
What do you call a restaurant that runs out of a ghost kitchen? A virtual restaurant. The only way to get food from them is to order via an app or third-party delivery platform. These are the restaurants of the digital age—they exist solely on our devices via apps and delivery services. Take Moonbowls, a California-based restaurant serving Korean-style bowls. With the power of ghost kitchens, they have been able to rapidly expand to seven locations from San Francisco to Columbus, Ohio.
Traditional quick-serve restaurants are taking note too, using ghost kitchens to expand their well-known brands. Chick-fil-A and Wendy’s are experimenting with virtual locations in cities across the country.
Restaurants known for fine dining are making the pivot, too. SBE—known for its restaurants with chefs like Jose Andres, Wolfgang Puck, and Masaharu Morimoto—virtual restaurant game. The hospitality stalwart is gearing up to launch 500+ locations of delivery-only concepts like Umami Burger, Sam’s Crispy Chicken, and Krispy Rice—a sushi and bento concept. Even celebrities like Rachael Ray and Wiz Khalifa are getting in on the delivery game, using ghost kitchens to create national virtual chains, seemingly overnight
Virtual restaurants can also take a different form as an extension of an existing restaurant. Bloomin’ Brands has found success with this model, adding the virtual fried chicken concept Tender Shack to their portfolio. When a diner orders, it’s cooked and sent from existing locations of Carrabba’s Italian Grill.
These restaurants of the future are taking advantage of the significantly reduced costs of operating to expand into new markets and launch brand new concepts.
These changes to the traditional model have predated COVID-19, but the pandemic’s impact on the industry has made one thing clear: delivery is not only here to stay, it’s growing. Separating the kitchen from the restaurant has created an infrastructure ripe for innovation and experimentation, and one that is seeing big bets placed on it. Former Uber CEO Travis Kalanick has invested hundreds of millions of dollars CloudKitchens, which is building facilities in the U.S, U.K., and India. Kitchen United and Zuul Kitchens are creating virtual food halls in cities like New York and Chicago, where diners can order from multiple local favorites at once. Companies like Miami-based Reef Kitchens are taking it modular, building kitchens in shipping containers that can find homes in parking lots.
When delivery is the only way many customers can get your food, and with the market growing post-pandemic, ghost kitchens or going virtual are a more practical option. Whether you are looking to expand your delivery radius in your city (or a new city), open your first concept, or increase your capacity for delivery or pickup, Lunchbox had you covered. Here’s more of what you need to know https://lunchbox.io/2020/04/15/7-things-to-know-before-launching-a-ghost-kitchen/ to get your own ghost kitchen or virtual concept up and running.
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