A restaurant’s afterlife: ghost kitchen is the hottest gastro-business trend

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A restaurant’s afterlife: ghost kitchen is the hottest gastro-business trend

Posted on 11/10/2021

Ghost kitchens are restaurants that take only online delivery orders. After 2020, they flourished on all continents.

There is a restaurant where you cannot sit to dine. Sometimes it lurks in warehouses on the outskirts of districts, sometimes in shabby, inconspicuous buildings. You cannot know you are passing it, because there is no logo or a menu chalkboard on the sidewalk. It will send you vege sushi for lunch almost to your desk, and in the evening, it will deliver a pizza right to your doormat. It's the ghost, or dark kitchen - the hottest, and the most profitable proposition in the gastro-business these days.

The pandemic creates a ghost army

When the pandemic hit and gastronomy had to shut their doors overnight, the delivery option became the only chance of survival. Empty dining halls and teams of idle workers generated great losses. It was then that new places appeared in food delivery service apps, which were not on the map, but offered a short menu of favorites: pizza, burgers, or curry.

The concept of ghost, or dark/virtual kitchens, has spread its wings during the pandemic, but it actually emerged several years earlier. The idea was born in the USA, initiated by the so-called "Mr. Sandwich", a simple, ready-made catering for office workers without a corporate canteen or bars with affordable lunches. More and more small suppliers appeared in the catering market to feed the working class for less than in regular canteens.

The next step in the development of ghost kitchens was the professionalization of the global suppliers: Deliveroo, GrubHub, UberEats, DoorDash.[1]  Suddenly, to feed people, you did not need a restaurant with a large dining hall and kitchen (read: high rent), nor a large team of cooks and waiters who required salaries and insurance. It turned out that a small room rented in a cheap building, but with kitchen equipment that meets health safety requirements, supplemented with a well-promoted online offer, a smart menu, appealing photos of food, and a contract with a delivery company, and you are ready to do business.

Chef Greg Marchand, in charge of the Michelin-starred Frenchie Rue du Nil restaurant in Paris and its twin Frenchie Covent Garden in London, predicts that the ghost concepts will continue to grow. Which doesn't mean that he is happy about it. "The number of ghost kitchens will increase in the near future in restaurants across the UK due to the growing popularity of food delivery services such as UberEats. The longer the restaurant market will suffer from problems caused by the pandemic, the longer the suppliers will try to use the fast food market to increase profits," he explained in an interview with Food Tribe.[2]

A 2020 National Restaurant Association industry report found that three out of four operators consider offering food to go as "the best chance for development".[3]New York is already the largest food supply market in the United States and demand is only growing. With Deliveroo in Europe, Swiggy in India, and DoorDash and UberEats in the US, the global online food delivery industry is expected to grow to $ 200 billion by 2025.[4] As predicted by Euromonitor, by 2030 ghost kitchen will be a global, billion dollar industry.[5]

How to create a cash... ghost?

How to create a dark kitchen concept that will hit the market? Andrew Twells, an award-winning chef, argues that one way to success is through a well-thought-out menu. "Simple, with good, high-quality delivery to the customer," he said during this year's industry seminar "Trend Talk: All about Ghost Kitchens "[6] attended by over 450 restaurants from 40 countries around the world.

Stephan Leuschner, the guru of dark kitchen at Rational, emphasizing the importance of menu optimization in terms of delivery. What does this mean in practice? "Forget complicated dishes. Focus on preparing your food quickly. Create one dish that will stand out, characterize your kitchen, and keep the rest simple. Say goodbye to expensive, demanding ingredients," advised Leuschner. [7]

Efficient delivery time is another ingredient of success. As the Rational expert reminded, the ghost restaurant aims at local customers and it is they who are worth fighting for. "You have to approach the customer focusing on local flavors and preferences, offer them self-pickup in the area", Leuschner emphasized .[8]

Gastro-coworking or gastro-outsourcing? Count your options!

Ghost kitchen concepts can have multiple business models and take advantage of many flexible options due to the lack of a physical point of sale. One of them is the Deliveroo model, in which a large supply company rents space to chefs and charges a commission for orders delivered from coworking kitchens (mini-kitchens, each with its own separate brand).

Another solution is a model where both cooking and delivery are completely outsourced to a third party and we own the business.[9] Another option is to have the kitchen in the "cloud", which to facilitate the management of orders, sales and inventory; it is offered, e.g., by the company POSist.[10]

The last option is the most romantic, although the riskiest: opening a small family kitchen in an unused room of the house. It is enough to break through on social media and, at least in the beginning, to organize deliveries locally, at your own expense. The free "ghost kitchen calculator" by Dan Fleischmann from Kitchen Fund is designed to help you estimate the cost and profitability of each idea.[11]

When the restaurateur met the ghost

The ghost kitchen cannot function without technology and an efficient supply system. An interesting example is the way the Deliveroo concept operates. It is a British online food company founded in 2013 by Will Shu and Greg Orlowski.

A year before the pandemic, Deliveroo's Paris division was established near the business district of La Défense (Courbevoie). A 500-square-meter building hosts eight virtual restaurants that prepare only take-away food. Among them are brands well known to Parisian foodists such as PNY, Le Camion qui fume, Le Petit Cambodge or pizzeria Tripletta. Each restaurant has an area of 18 square meters, which is the size of a large room, and each employs a maximum of five people. Deliveroo provides restaurateurs with an ordering and selling platform and supports them in creating an online offer at 40% of the profits. Apparently, business is booming as the kitchens are in full swing.[12]

'We do not impose a fixed rent on restaurateurs', Gabriel Diaz, operational director for Europe at Deliveroo Editions explained in an interview with challenges.fr. "At the beginning of the project, we were turning to restaurateurs, and now they come to us, so the concept has been accepted. These are real restaurants, real products, and real professionals", Diaz argues.[13]

In this story, the key to success is a functional ordering system and location. Corporate areas, where hundreds of thousands of employees need lunch every workday, are the perfect place for dark kitchens. Besides, in the area of La Défense there are quite wealthy people from Neuilly, Levallois and the 16th District of Paris.

"The dark kitchen concept allows testing new locations at a low cost: check if there is a clientèle and whether a larger business is profitable," explains Valentin Bauer, founder of the Tripletta pizzeria, which serves deliveries only in Courbevoie, but runs a full-size restaurant in Belleville in Paris. "Creating a new food place takes from 8 months to a year. By renting a space for a small kitchen with supplies, you can start a restaurant in a month .[14]

A bunch of ghosts under one roof

After 2020, dark kitchen concepts have flourished on all continents. One of them is the German company Keatz, which started a dark kitchen in Berlin and has now expanded the concept to 10 locations in Amsterdam, Madrid, Barcelona and Munich.

Zuul Kitchens has opened in Lower Manhattan, a ghost kitchen space shared between six restaurant brands, both new and well established: Sweetgreen, Junzi (a fast Chinese fast casual brand) and Stone Bridge Pizza and Salad (a fast casual pizza and salad brand).[15] In Boston, Will Gilson, co-owner of Puritan & Co., converted the Puritan Trading Company warehouse space into a dark kitchen concept. Instead of braised lamb or duck carpaccio, customers order banh mi sandwiches, fish tacos and seafood dumplings. As Gilson argues, business is booming.[16]

In Chicago, there is a concept of a triple "ghost kitchen" - Cluckson's, Butterclaw Lobster Co. and GuacDog. Its co-founder, Rich Levy focused on a specific niche: corporate catering for a minimum order of 10 people. Everything is handled by a 3-person team: Levy, his partner, and one employee. If additional help is needed with orders for larger events, they hire additional staff ad hoc, thus cutting the cost of maintaining a large team.[17] On the other hand, Travis Kalanick, former Uber CEO, is working on a ghost kitchen start-up CloudKitchens, and Starbucks is building its own express stores, which will function largely as ghost kitchens for delivery orders combined with other large brands. [18]

More and more "ghosts" also in Poland

In Poland, the dark kitchen trend has been growing very fast. One of the most popular places that started operating in 2020 is Ghost Burger, a new brand of the well-known Mr. Pancake and Pizza Boyz. "Burgers are the second most popular type of delivery food after pizza, and we have a lot of experience in this segment. It is also the first step in the development of our own business delivery. Soon we will open strictly ghost kitchens, which will allow us to expand the deliveries to new districts of Warsaw. We are starting a pilot project with the Ghost Burger brand in Warsaw, with a plan to introduce it to the entire franchise network," explained the owner Piotr Śliwa in an interview with the brand portal dlahandlu.pl.[19]

Another interesting concept of virtual restaurants, which is to open soon in Warsaw, is Chef's Ghost Kitchen. Four cuisines of the world will join there to start with: Middle Eastern, American, Japanese, and Indian, with more on the way. "The experience of the last months is a huge blow to the catering industry. We all sought solutions that would save the situation and allow us to survive the new normal. This is how the idea for Chef's Ghost Kitchen emerged. We have been watching this concept develop in the USA for a long time and even then it seemed to be an interesting direction. The pandemic accelerated the execution of the plan," said Yaser Attun, co-owner and originator, said in an interview for the horecatrends.pl portal. The biggest challenge for him was to prepare a place where he could organize the work of four different chefs at four separate stations. "This allows us to simultaneously carry out orders for sushi, burgers, Middle Eastern or Indian dishes", explains Attun.[20]

Thinking of your own "ghost"?

If you are considering opening your own dark kitchen concept, remember:

1. The dark kitchen is not gourmet and will not attract outstanding chefs.

2. It is a concept focused on a simple, consistent menu and efficient food delivery.

3. Before you decide to start a dark kitchen, think about the business model that suits you. There are several of them, because the concept itself is very flexible.

4. Before you bite off more than you can chew, use the cost calculator, e.g., this one

5. The dark kitchen cooks for their neighbors, nearby offices and the local community. Advertise wisely, communicate to your target audience.