What you need to know about ghost kitchensAuthor: Ben Luxon
The number and popularity of ghost kitchens is on the rise. It’s estimated that this sector of the industry alone could be worth $1 trillion globally by 2030 according to Euromonitor. But what is a ghost kitchen, and why are they becoming so prevalent?
Ghost kitchens, also referred to as dark kitchens or cloud kitchens, are not a new concept. In their truest form, it is the creation of an entirely virtual restaurant. What this means is that there is no dine-in service, no actual restaurant, only chefs in a kitchen. They prepare orders for delivery, eliminating the customer-facing side of the kitchen. Their entire brand identity exists digitally and often heavily hinges upon a strong social media presence.
The first ghost kitchens started appearing a few years ago but received push-back from the industry and despite the growing demand for delivery and take-out over the last two decades, it’s only recently, spurred by global economic events, that we have started to see this segment of the industry take-off.
The advantages of ghost kitchens
Ghost kitchens allow companies to maximise labor efficiency by cutting the front of house expenses. The kitchen does one job, fulfils online orders. Using this model helps justify large third-party delivery fees.
They are also extremely versatile, theoretically capable of preparing meals from several different restaurants. Because their brand nature, as we said earlier is entirely digital and not reliant on a brick and mortar location it’s perfectly possible for ghost kitchens to produce items from totally different menus side by side. As a result, customers can get their food faster and will ultimately have more options.
Strategies for launching ghost kitchens
In this form, a kitchen might be tenanted by multiple different brands. There are several reasons a company might go this route. It could be, for example, to take advantage of local delivery areas that would otherwise be outside the range of their brick and mortar store. Or it could be to add additional kitchen resources during busy service periods to fulfil delivery only orders.
Twinning runs on the principle of servicing delivery and take-out orders much like many restaurants currently do – within the brick and mortar kitchen. The difference is that these kitchens dedicate a separate space or station for these orders so that digital and take-out orders don’t interfere with in-store service.
Build your own
This is when a brand rents out a kitchen space (or even operates from their own home) in order to fulfil digital orders. This specific subset of a ghost kitchen is very versatile and can include a combination of ghost kitchen strategies such as leasing out extra space to additional tenants.
Considerations when building a ghost kitchen
Starting a ghost kitchen should be carefully planned. Failure to plan will lead to higher overhead and lost opportunities to maximise profitability.
One of the key challenges of building a ghost kitchen is developing a restaurant brand without a restaurant. People are never going to stumble past your door, smell the kitchen, pop in to grab some lunch. Instead, you have to build a powerful online presence. However, if you manage this well there is an opportunity to create a positive customer experience that extends far beyond the kitchen doors or even the meals you supply.
Additional key areas for ghost kitchens to focus on include some of the following:
- Data to better understand your customer base and demand.
- Menu building and management to create a menu that travels well can be prepared fast and has optimal margins at affordable prices.
- Streamlining processes to cut overhead and increase profits.
- Managing delivery to ensure customer satisfaction.
- Optimising ordering channels to make it as easy as possible for customers to order via any device.
Utilising online ordering technology to deliver great customer experience
Ghost kitchens are a proven concept. They empower restaurants to reach new customers without massively increasing overheads. Or they allow new brands who might not be able to afford to set up their restaurant yet to start making and serving the food they’re passionate about.
Ultimately though, a ghost kitchen is all about meeting the increasing demand for online orders. As such it requires brands to have a powerful digital presence paired with an excellent online ordering capability.
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