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Ghost kitchens have experienced significant growth during the last few years. Many brick-and-mortar restaurants limited or prohibited on-site dining during the height of the COVID-19 pandemic. Even the top 25 Michelin Star restaurants have had a lot of changes to work with.
This concept helped offset traditional restaurant expenses and minimize employee layoffs. It enabled restaurants to prepare food for multiple brands and kept them afloat during unpredictable times. It also provided opportunities for different types of chefs to supplement their income or stay employed during difficult times.
So, what is a ghost kitchen all about? It’s a concept that allowed restaurants to prepare food for deliveries when dining restrictions were in place. However, as pandemic-related restrictions have been loosening, the trend of ghost kitchens has remained strong. It’s a concept that appears to be here for the foreseeable future.
Interested in learning more about ghost kitchens? Read on to learn everything you need to know.
The Ghost Kitchen Trend
Even before the pandemic, ghost kitchens were opening in response to the increasing consumer demand for restaurant delivery meals. While it's hard to predict the future of ghost kitchens, many experts believe that ghost kitchens could be a $1 trillion industry by 2030.
Many traditional restaurant owners are warming up to running a ghost kitchen to complement their primary establishment. It's becoming more than a current trend or popular restaurant lingo trend. It appears that ghost kitchens may be here for the long run.
Ghost Kitchen Definition and Meaning
A ghost kitchen, also known as a cloud or dark kitchen, is a cooking operation that prepares delivery-only dishes. It doesn't offer an indoor dining area, a drive-through, or a parking lot for guests. This makes it impossible for customers to dine and dash. It's essentially a physical space for operators and chefs to create food for deliveries.
Unlike a virtual restaurant, a ghost kitchen isn't a restaurant brand. Moreover, it may offer kitchen space and facilities for multiple restaurant brands. Ghost kitchens can operate from within existing restaurant brands or function as standalone facilities.
What Are the Benefits of a Ghost Kitchen?
- Expanded Presence On Third-Party Delivery Apps
Ghost kitchens allow restaurants to expand their presence on third-party delivery apps such as DoorDash, GrubHub, and Uber Eats. Millions of consumers use these apps, so it gives your ghost kitchen access to a large market of potential customers. Third-party logistics companies–also known as 3PL companies–handle the deliveries so you can focus on preparing the food.
- Experiment With Different Types of Cuisine
Ghost kitchens also let restaurants experiment with different types of cuisine. For example, an Italian restaurant can use a ghost kitchen to experiment with seafood dishes they're considering for their menu. They can receive feedback that lets them know whether it's a good idea without risking adverse effects on their brand image.
- Extra Space for Food Preparation
Many restaurateurs enjoy the benefit of having extra space for food preparation. With the lack of a dining area in the facility, there's more room for delivery supplies and preparing orders. This was a key value proposition for restaurant brands during the pandemic, as restrictions and lockdowns forced them to close their dining areas anyway.
- Reduce Waste And Minimize Food Costs
A ghost kitchen provides the ability to reduce food waste and minimize your food cost percentage. Restaurateurs can combine several of their operations into one facility, which makes it easy to share and reuse ingredients for diverse menus.
Food operations are streamlined into one location, making inventory control and ordering supplies easier. This can boost team productivity and keep everything running smoothly.
What Are the Types of Ghost Kitchens?
Currently, there are three different types of ghost kitchens:
- Incubator/Pop-Up Kitchen
An incubator or pop-up ghost kitchen is affiliated with a traditional restaurant, but focuses on online orders and deliveries. This type of ghost kitchen is ideal for adding a new revenue stream and experimenting with new dishes on the local market. The restaurant creates a workflow that allows the ghost kitchen workers to focus on preparing the delivery orders.
This concept is also great for focusing on current trends within the industry. There might be high local search traffic for a particular dish, so you can offer it to meet the rising demand. If the demand eventually subsides, then you can introduce new choices.
- Commissary/Shared Kitchens
A commissary or shared kitchen is owned and operated by a third-party company or entrepreneur. There are usually multiple restaurants or brands in the same building.
The staff shares everything from refrigerators to storage space. The warehouse layout design provides plenty of space for operating smoothly. You also have additional free space for MRO inventory.
Virtual restaurants pay for a membership or rent cooking space by the hour. It's a good option to get the benefits of a ghost kitchen without paying for upfront costs.
It reduces some expenses, such as purchasing equipment and large appliances, making it an ideal scenario for potential new business owners.
- Kitchen Pods
Kitchen pods are storage containers that come with a fully-equipped kitchen. They enable you to operate a ghost kitchen as soon as possible. A kitchen pod is customized for efficiency and reduces some expenses of renting a larger commercial space.
However, you may face challenges with safety and zoning when operating a kitchen pod. There aren't windows in these kitchens, and they are typically more cramped than other types of ghost kitchens. You might not be permitted to install one in a driveway or near your restaurant–two preferential locations.
Traditional Restaurants vs. Ghost Kitchens
Now that we’ve covered the benefits and types of ghost kitchens, let’s compare them to traditional restaurants. We’ll focus on four main areas: service, food, business approach, and accommodation.
1. Service
Ghost kitchens operate in a different way than traditional brick-and-mortar restaurants. The first difference is that restaurants offer dining service and possibly a takeaway option, while ghost kitchens only provide deliveries. It saves ghost kitchen operators from spending money on furniture, décor, and a traditional industry menu.
2. Food
Food is another key difference between the two concepts. Restaurants prepare elaborate meals for each diner with an emphasis on presentation.
Ghost kitchens quickly produce large amounts of food. They emphasize ease of production and the speed of deliveries to their customers.
3. Business Approach
The overall business approach also varies between traditional restaurants and ghost kitchens. A restaurant is one brand that caters to patrons who dine in or order takeout.
Ghost kitchens might house one delivery-only brand or multiple separate entities in the same building. A commercial food facility can host anywhere from one to numerous individual brands.
4. Accommodation
Lastly, traditional restaurants focus on marketing to bring people into the establishment and provide them with a fine dining experience. Ghost kitchens are often located outside of urban areas and focus on preparing and delivering their food at a quick pace. Their space accommodates delivery drivers by ensuring they have ample parking and waiting spaces.
How to Set Up A Ghost Kitchen
Are you interested in setting up a ghost kitchen? Here are four basic steps to setting up a ghost kitchen:
1. Conduct Research
Ghost kitchens are a recent trend, so you might have to get creative when looking for resources. Connect with people operating one and ask all of the questions you have to get some insight. This will give you a good idea of what you’ll need to get off to a good start with yours.
2. Decide On A Concept
Remember, you won't have to think about your location and design, so focus on your menu and what would make your brand stand out. Find out who your competitors are and search for gaps in the market you could fill. This information will help you come up with restaurant marketing ideas for establishing your brand.
3. Choose The Right Space
The location might not be a factor, but you want to ensure that you have a suitable space for cooking. Choose between renting a place, sharing a kitchen, or using your own space.
Your budget should help you decide which is best for you. Also, consider whether this is a short- or long-term investment. Keep in mind eCommerce business insurance costs and health inspections for the place you choose.
4. Market Your Brand
Once your ghost kitchen is ready, create your restaurant marketing strategy to promote your brand. Do some research on eCommerce website examples to get some ideas for your brand’s website.
Hire an experienced graphic designer to create your website and promote it on social media. Reach out to your professional network and ask them to share your concept.
Frequently Asked Questions About Ghost Kitchens
What Is A Ghost Kitchen Concept?
A ghost kitchen is a food preparation facility without servers, a dining area, or a parking lot for guests. Restaurants and entrepreneurs rent ghost kitchens to prepare food for deliveries.
What Is An Example of A Ghost Kitchen?
Si's Chicken Kitchen of Chicago is an example of a ghost kitchen. Si-Pie Pizzeria launched it on UberEats to sell chicken to meet the high demand in the Chicagoland area.
What Is The Difference Between A Ghost Kitchen And A Cloud Kitchen?
A ghost kitchen and a cloud kitchen are similar concepts. You will hear both terms used interchangeably to describe a kitchen that prepares meals for delivery only.
How Do Ghost Kitchens Affect the Traditional Restaurant Industry?
Ghost kitchens have disrupted the traditional restaurant industry by offering a low-cost, flexible alternative to brick-and-mortar establishments. While they provide opportunities for new food concepts and brands, they also pose competition to traditional restaurants, especially those that rely heavily on delivery and takeout orders.
Can Ghost Kitchens Be Used to Test New Food Concepts?
Yes! Ghost kitchens are an ideal platform for testing new food concepts because they allow chefs and entrepreneurs to launch and experiment with new menus without the significant financial investment required for a traditional restaurant. This flexibility enables them to gauge customer interest and refine their offerings before committing to a larger-scale operation.
Can Traditional Restaurants Convert to a Ghost Kitchen Model?
Yes. Traditional restaurants can convert to a ghost kitchen model, especially if they already have a strong delivery or takeout business. By doing so, they can reduce costs and focus solely on food production and delivery. Some restaurants choose to operate both models simultaneously, maintaining a physical location while also running a ghost kitchen for additional revenue streams.
Is A Ghost Kitchen Right for Your Restaurant Business?
Ghost kitchens have been on the rise for several years now. People like having the option of receiving restaurant-quality food without leaving their home or office. Delivery services have worked on shortening delivery times through adding more employees.
The trend of ghost kitchens should continue growing in popularity during the next decade. Is it time for you to get involved in operating one? It depends on the goals you have for your restaurant or potential brand. More people use delivery services, so it makes sense to be present to meet consumers’ needs.
However, the recent global pandemic has shown that the food industry can change quickly. It might not pay to put all your eggs in one basket. The wise choice might be to balance your traditional restaurant brand with a ghost kitchen.
You can utilize your ghost kitchen to try new concepts for your menu and increase your business reach. You’ll also have your restaurant to rely on for traditional service as the restaurant industry continues to recover from the pandemic.