Ghost Kitchens, also known as “black kitchens” and “cloud kitchens,” are a new sort of “third place” facility that is transforming the food industry quickly. As the globe gets more interconnected and people’s expectations towards the delivery of goods and services are rapidly moving towards the tap of a button on an app, the industry is now bound to discover new methods to depart from its old operations to meet consumer demand.
Several chains and independent restaurants are turning to ghost kitchens to live and prosper in the future food and beverage industry. A Restaurant industry & Market Evolution study found that 52% of the restaurants surveyed were considering expanding their brands by starting a ghost kitchen or delivery-only service. Each of these kitchens is strategically put in a region where delivery services are in great demand.
Although these kitchens do not belong to a specific restaurant chain, the staff working within them makes food that is solely available for delivery. Instead of having a physical presence, these kitchens are exclusively accessible online through a food delivery app, allowing them to reach various customers.
When compared to the cost of a traditional brick-and-mortar business, ghost kitchens provide several substantial financial advantages.
According to Limetray.com, “the average monthly rent for a ghost kitchen in the United States is approximately $20,000; license fees are roughly $1,000, a small staff costs between $7,000 and $14,000, and social media advertising begins at approximately $8,000 per month. In contrast, the initial investment expenditures for a single restaurant franchise can close to $100,000.”
With the ghost kitchen model, leading companies such as The Halal Guys, Dog House, and Wow Bao are experiencing success. Even during the pandemic, it enabled restaurants to reduce expenses and increase earnings.
Multiple restaurants have successfully re-branded themselves as numerous mini-brands within the kitchen, particularly those that offer a variety of meals. Their digital front presents as a salad bar, pizza restaurant, and sandwich shop. Still, their menus are made in a single “ghost kitchen” rather than in separate locations.
Restaurants’ overall and conventional business strategy is the exclusion of seating areas and physical stores. After eliminating their front-of-house operations, these rooms comprise solely a kitchen and a tiny storage area in the back of the house, totaling between 500 and 600 square feet.
When receiving an order via a website or an app, a chef produces the specialty dish and sends someone else to collect it.
Due to the evolution of these business models, many are now turning to shared cloud kitchens, a culinary take on co-working spaces, to house more brands and cuisines.
Euromonitor, a market research group, reportedly predicted that all types of ghost kitchens may become a $1 trillion industry by 2030.
According to Michael Schaefer, leader of Euromonitor’s Global Food and Beverage, the evolving cost structures of the food service industry are one of the key factors influencing the rise of the ghost kitchen sector. Ghost kitchens force restaurants to focus more on delivery than on in-person eating, and the decrease in staff that comes with a delivery-focused model can dramatically lower restaurant rent and staffing expenses and increase tight margins, according to him.
As more consumers resort to online ordering and rely on technology, the term ’ghost restaurants near me’ will become increasingly vital to the restaurant industry’s long-term success.
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