Category: News

It’s 10 o’clock on a weeknight, and you have a craving. You get out of bed, unlock your phone, and launch a delivery app to browse a collection of buffets in your home clothes. You see a listing from a restaurant called “XYZ” that promises tasty fast food, seafood, and more. Although you are unaware of the brand, the photos of the delicious food will make you want to go there. You order the fried fish in two pieces and French fries for $12.95. An alert appears with the following text: Estimated delivery time is 15-30 minutes.

Whether you order from any of the fried seafood brands, you will get the prepared food in the same style kitchen by the trained crew on time.

As a result of the convenience of food delivery apps, many new businesses are opening up that operate entirely online and do away with the traditional restaurant’s dining area and wait for staff.

In 2018, an economic research organization, UBS, predicted that the global meal delivery market would increase by 13.5 percent annually for the foreseeable future, beating the restaurant industry’s 3 percent annual growth rate. This was before the pandemic even began. That shows that the “ghost-kitchen economy” will remain.

Currently, American restaurants are worth $863 billion, but food delivery startups like Uber Eats, DoorDash, and Grubhub are starting to change that. The apps are altering the core of running a restaurant because more customers are using them to order food for takeout and because delivery times are decreasing.

Eatery owners no longer need to lease space for a dining area. A kitchen, or even just a portion of one, would be enough to get by. They can then set up shop inside a food delivery app to advertise their wares to a captive audience without worrying about staffing or inventory.

The trend has made two sorts of virtual restaurants near me more common. There are “virtual restaurants” extensions of physical eateries that serve food made especially for delivery requests. On the other hand, ghost kitchens don’t have a physical location and only prepare food for delivery.

Alex Canter, the founder of Canter’s Deli in Los Angeles, said that the convenience of online shopping is a good thing in and of itself. “It’s the most exciting potential in the restaurant sector right now.”

Although many delivery-only businesses are just getting started, they can have a significant impact by encouraging more consumers to choose takeout over dining out or cooking at home.
Uber and other companies are leading the responsibility for change and allowing the gig economy benefits for entrepreneurs. With the support of restaurateurs, Uber has launched 4,000 virtual eateries on its Uber Eats app since 2017.

Uber Eats’ North American business head, Janelle Sallenave, said that the company uses sales data from neighborhoods to determine which cuisines are in high demand but are currently underserved. Then it contacts eateries that use the apps and proposes to launch a virtual establishment to cater to the increased demand.

In Europe, the food delivery startup Deliveroo has begun conducting “ghost kitchen” tests. In some unexpected places, like a deserted parking lot in East London, it set up metal cooking constructions called Rooboxes. Last Year, Deliveroo launched a “ghost kitchen in the warehouse in Paris, where Uber Eats has tested delivery-only facilities.

However, China’s highly crowded megacities have seen the rise of “ghost kitchens” due to the popularity of online food delivery apps. According to market research firm iResearch, in 2017, meal delivery orders in China totaled a staggering $70 billion.

The opportunities for profitable restaurant business ideas have been advanced. The food delivery services business was projected to rise from $43 billion in 2017 to $467 billion in 2025, and now it is anticipated to reach $1 trillion by 2030, even before COVID-19. Ghost kitchens are springing up everywhere and altering how we view the conventional restaurant business model to a ghost kitchen business model.

Several businesses have little option but to adapt by turning completely digital, offering new opportunities. Many companies have had to adapt as an unprecedented number of customers choose delivery or takeout from their favorite eateries rather than dining in.

Ghost Kitchen met the desire for off-premise restaurant dining, known as dark kitchens, virtual kitchens, cloud kitchens, or headless restaurants. Due to the lack of a storefront and wait for staff, they differ from traditional brick-and-mortar restaurants. As the space (kitchen) is configured for delivery or takeout-only meals, this supports restaurateurs in diversifying their online menu selections.

With fewer expenses and speedier launch periods, ghost kitchens’ popularity is widespread are more profitable than traditional eateries during the pandemic. Restaurant operators didn’t have to worry about paying for rent, power, water, gas, and other utilities for their dine-in establishments. Also, they were safe from the expense of hiring waitpersons and cashiers who deal with consumers directly. Instead, they only required wholesome ingredients, a kitchen, and cooks to make the cuisine.

This made it far simpler for new business owners to break into the market. Some operators had considered launching a restaurant but needed more initial money. They learned from the virtual kitchen craze that they could start their own companies for much less.

Traditional eateries tend to be more complex than virtual kitchens. Ghost kitchens run out of the owners’ homes or places of business, unlike big chains. This means they emphasize uncomplicated meals with wholesome ingredients instead of elaborate dinners made from reheated food. Because the food is prepared to order, ghost kitchens frequently offer more significant quantities, cheaper ingredients, and less waste. Additionally, the food must be suitable for delivery, making it even more crucial to pack as much taste into as few ingredients as possible.

Michael Schaefer, a global leader in food and beverage at the market research organization Euromonitor International, reports that global delivery sales doubled between 2014 and 2019. He adds that before the pandemic, major investors had already begun investing in “ghost kitchens.”

Since the beginning of the pandemic, Brinker International, which owns Chili’s and Maggiano’s Little Italy and has more than 1,500 kitchens across the country, has launched a virtual-only brand called It’s Just Wings delivered by DoorDash. It is projected to generate $150 million.

Schaefer estimates that China has 7,500 ghost kitchens for meal production with the aim of delivery only, while 750 in the United Kingdom, 3,500 in India, and 1,500 in the United States.

By 2030, he claims, this growing cloud kitchen business could generate a $1 trillion worldwide market.

According to Schaefer, future advancements in restaurant automation can also be brought about by a thriving cloud kitchen growth industry.

According to him, in five to ten years, this change could result in complete automation of the production of some menu items, such as pizza, ramen, or expensive coffee, to increase service speed and reduce food production costs.

Ghost kitchens are a preferred business model for restaurateurs, which makes sense given that brands are struggling with rising rents and shrinking margins and that consumers are increasingly turning to online ordering choices instead of dining out. Operating a ghost kitchen has benefits such as lower overhead, business insights, and idea flexibility.

Ultimately, anyone can open a ghost kitchen with excellent recipes, cooking skills, and sufficient business knowledge. The lower operating expenses made it possible for thousands of kitchens to be built that otherwise might not have been.