This Guide Ghost Kitchen Je Ne Sais Quoi Where
Total Page:16
File Type:pdf, Size:1020Kb
GHOSTGHOSTGHOST GUIDES KITCHENSKITCHENSKITCHENS INSIDE…INSIDE…INSIDE… THIS GUIDE is intended to give the low-down on how to set up and run a successful GHOST KITCHEN. We’ve collected tips from experts, players in the field, and we’ve also included a little StoreKit JE NE SAIS QUOI. That’s French for “technology advice”. WHERE should you look for your kitchen site? HOW should you plan your menu? WHICH delivery platform should you be on? WHAT direct marketing should you use? WHAT IS A “GHOST KITCHEN”? A ghost kitchen, also known as a dark kitchen, cloud kitchen or virtual kitchen, is a kitchen which only sells its food online. Without the need to interact with customers directly, ghost kitchens have the advantage of cheaper rent, operational, and labour costs. All that’s needed is a space kitted with kitchen equipment, along with chefs to make the food. The added expense of ghost kitchens comes in the need to deliver – but this is an operational rather than a capital expense, so is not a barrier to entry. As far as this guide is concerned, a ghost kitchen can be part of a chain which includes brick-and-mortar restaurants. HOW DOES IT WORK? Ghost kitchens work like food delivery from a restaurant would. The customer who is placing the order on Deliveroo or UberEats, for example, might not even know that their food was produced in a ghost kitchen. While some brands have added ghost kitchens to help with the influx of takeaway orders, some restauranteurs have created entirely new brands that are delivery-only, which we’ll call “virtual restaurants”. CAN GHOST GUIDES KITCHENS WORK? The food delivery market is expected to hit $365 million in 2030 globally, says UBS. That’s up from the estimated $35 million spent last year. The report imagines a future in 2030 where meals currently cooked in homes are delivered from either restaurants or central kitchens. Is this true? The crux of the argument is that delivery-only kitchens could undercut their store- based competitors: they can ‘cut meal preparation costs, and robot chefs (will) industrialize the process further. At scale, unit costs of delivery drop by 50% percent, and even more via drones and droids.’ Ghost kitchens are booming in cities all over the world. The delivery-only model has succeeded in part because of leaps in tech and consumers wanting fresh food fast. In the past 5 years and through the help of Deliveroo & other platforms, I’ve seen ghost kitchens flood the market – from the customer point of view as well as from within, they are certainly a concept to consider. Deliveroo has managed to organise the costly details of a ghost kitchen & offer package deals, thus making it an easier option for any company to open in the form of the Editions. However, in my personal opinion, while there are significantly less costs than a restaurant and may have their benefits as an operation, I do not consider them to be part of the hospitality world, as there is minimal guest interaction and opportunity to serve and be hospitable. IOANNIS PAPAPOSTOLOU Cost controller, BVC Group, London-based restaurant and hospitality company Because of the flexibility of only needing an app, website or traditional telephone ordering system, more than one cuisine can be produced in the same kitchen space. Easy to prepare, cook and deliver foods such as salads, sandwiches, Asian and other ethnic dishes, or gourmet pizza can all be offered while cross-utilizing similar ingredients in creative menu offerings. DR. CHRISTOPHER MULLER Associate Professor at Boston University School of Hospitality Administration, and leading academic expert in chain restaurant management BOOSTERSBOOSTERSBOOSTERS &&& BACKERSBACKERSBACKERSGUIDES TRAVIS KALANICK, ANDREW CHEN, MCDONALD’S FOUNDER OF UBER ANDREESEN HOROWITZ PARTNER The former Uber founder is probably the richest single man to invest in ghost kitchens. For consumers, the value is obvious. Our favorite local Early in 2020, McDonald’s After he was forced out of Uber, restaurants, not just national chains, will become launched their first UK “ghost Kalanick launched a fund focused available on the food delivery apps we already use. kitchen” in South London. on bringing ghost kitchens to China By locating the network of kitchens close to customers, – where an emergent middle class the time it takes to get our food will be shortened, so This was conceived to meet the brings with it the opportunity to that it arrives crisp and delicious, and never soggy. huge demand for delivered define tastes for what will soon be With operational excellence that’s being tested and McDonald’s following the fast the world’s most lucrative market. optimized over time, service will be consistently great, food’s giant’s partnership with with fewer mistakes on orders and less unhappy diners. Uber Eats. McDonald’s are building on their Andreesen Horowitz is a Venture Capital formidable brand and customer company based in Silicon Valley. The base – to make their low-cost venture infrastructure in Silicon Valley and model even more slick. here in the UK is starting to focus on ghost kitchens. (These comments were taken from a public statement). WHAT’S THE OPPORTUNITY? While the takeaway market is still just a ‘A restaurant costs...around £300-350K to slither of overall restaurant sales, it’s a offset it, design, and everything, while a growing proportion. The market for kitchen can do it for £60-70k, because deliverty is expected to nearly triple in you don't need a design and all that. The five years by some estimates. investment is lower, so the payback is quicker...That's definitely interesting and TOTAL restaurant sales that's where you see a big evolution towards it, but I think what's important is Online delivery & takeaway that only works still if you have a strong brand.’ Restaurant sales ZHONG XU, CEO $44.7 bn DELIVERECT Deliverect is an aggregator specifically designed to help restaurants with delivery $16.8 bn components, including ghost kitchens.. $812.2 bn We asked Zhong what he thought of ghost kitchens and their appeal earlier in 2020. $609bn It’s clear that some of the biggest names in technology and hospitality are backing ghost kitchens as a business model – and that there’s plenty of money to be made. If you’re a small merchant, you shouldn’t let that 2017 2022 discourage you. Ghost Kitchens have lower barriers to entry than normal restaurants, so we’d expect a bigger proportion of ghots Projection: Aaron Allen & Associates, 2018 kitchens to be run by start-ups and independents compared to brick-and-mortar Worldwide restaurants. GHOST KITCHENS IN PRACTICE GUIDES Part of what excited the backers of ghost kitchens was the lower start- Shout up costs. But ghost kitchens pose a different challenge to brick-and-mortar There are a few other advantages besides smaller financial restaurants, and arguably require different skills – how you market investment: flexibility of concept, freedom to experiment and you can your meals totally changes. maximise on throughput. While digital marketing is growing more important for brick-and- mortar restaurants, restaurateurs may not realise how reliant they are Experiment on passers-by, and the physical presence of their restaurant as a marketing channel. Word-of-mouth is also strong for brick-and-mortar Ghost restaurants are the perfect opportunity to experiment with new restaurants, because visiting one is more likely to be a social concepts, because you can easily scrap ideas that aren’t working. experience. That’s especially true for style and theme – brick-and-mortar All that means that the world of digital marketing has come to restaurants require a huge investment whenever you want to change restaurants in a big way. the look and feel whereas ghost kitchens rely on a collection of digital assets which can be changed more easily. “For me, one really exciting area [of ghost kitchens] is chef collaborations. Where opening a first or second brick-and-mortar restaurant can be a prohibitively large (and risky) investment for established chefs, partnering with a ghost kitchen company gives them a way to get their food into the hands of a wide audience.” WILLIAM, MARKETING MANAGER, TASTER And vice versa. Collaborations with chefs with followings is a great way to attract attention in the online universe. We caught up with Taster over their success as a ghost kitchen for this guide. “The teams that work in virtual restaurants in our kitchen ... they’re run exactly like a team in a restaurant - it’s not robots making your food, it’s real people.” ECCIE NEWTON, CO-FOUNDER, KARMA CANS Karma Cans is being quoted from a report by the Thomson Reuters Foundation Dark kitchens still regulated to much the same standards as brick-and-mortar kitchens. This is because they aren’t necessarily designed to traditional restaurants. They can complement your food business and give a new lease of life to what you already offer. “Because this concept worked so well for us, we actually changed one of our restaurants from a sushi buffet concept to a regular restaurant with 8 different virtual restaurant brands inside it. The buffet sales weren’t doing so well and the delivery side was doing better, so we thought — let’s change it completely so we’re focused more on delivery.”… it’s “almost as if we have another restaurant without paying additional rent and labor, even though [Uber Eats] takes about 30 percent.” SushiYaa is being quoted from an interview with EATER magazine SushiYaa was not started as a ghost kitchen, but pivoted a greater and greater degree of their business to online ordering.