CloutKitchens: the rise of celebrity-branded ghost kitchens

CloutKitchens: the rise of celebrity-branded ghost kitchens

By
Louise Burfitt
February 23, 2021

Any ideas what the Youtuber Mr Beast, Mariah Carey and Food Network celebrity chef Guy Fieri have in common? The answer’s not exactly obvious, but all three (and many more) have recently launched their own virtual dining concepts - otherwise known as celebrity ghost kitchens or to some as ‘clout kitchens’. 

With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - over $1 billion has been invested on just the facilities that power ghost kitchens in the last two years alone. As a result, celebrity chefs, influencers and even stars from other industries have seen the dollar signs and signed up to new partnerships with delivery companies and cloud kitchens to sell branded food to hungry fans.

What exactly is a ghost kitchen? 

A ghost kitchen - also known as a cloud or virtual kitchen - is a delivery-only food business where virtual brands can prepare their food for delivery without a brick-and-mortar location. These kitchens have no dining rooms for guests, just catering facilities in key urban delivery areas. Some ghost kitchens are set up specifically for this purpose, others are repurposed restaurant facilities. During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience. 

Trend drivers: booming delivery, making ends meet & celebs with time on their hands

The main trend driver here is, of course, COVID-19 and the many challenges the pandemic has brought to bear on restaurants. Food delivery was already growing in popularity, but the pandemic hastened the trend. Delivery is the new eating out: it’s growing 300% faster than dine-in, and those in the know believe it will make up 50-60% of QSR sales within three to five years. 

For ghost kitchen logistics companies, like Virtual Dining Concepts, and chef-entrepreneurs, ghost kitchens also offer an efficient, convenient and less risky way to launch a new food venture. Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

Where food businesses are concerned, cost efficiencies are key. Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. Whereas most QSR restaurants employ 30-50 staff, ghost kitchens generally only need two or three workers per shift. This reduces costs by up to 80%. By partnering with virtual dining businesses, like VDC, struggling restaurants with extra capacity can also make up for lost income.

Thanks to the pandemic, celebrities also have more time on their hands to invest in new ventures. With lots of filming postponed and other sponsorship avenues, like live events and tours, closed off, stars have been more open to new concepts like the ghost kitchen.

Exploring the trend: celebrity chefs & star-studded partnerships 

The trend first appeared in the form of celebrity chefs launching their own virtual restaurant concepts. Pre-pandemic, TV chef Rachael Ray launched a virtual restaurant pop-up in partnership with UberEats. More recently, Guy Fieri of the Food Network has launched 100 (yes, one hundred!) virtual kitchens under the Flavortown Kitchen brand in partnership with Virtual Dining Concepts (VDC). VDC was set up by Robert Earl, former CEO of the Hard Rock Cafe and the founder of Planet Hollywood, and manages virtual kitchens. The company can install them at existing restaurants, allowing them to make extra cash from celeb-branded concepts - like the Flavortown brand. 

The company has helped launch an array of star-studded food ventures in recent times. And the craze isn’t limited to celebrity chefs anymore. It has quickly widened to other celebrities - who you might not traditionally associate with food ventures - getting on board.  Mariah’s Cookies, by none other than Mariah Carey, is a VDC partnership that launched in December 2020 - a line of freshly baked, delivery-only cookies across the US. Then there’s TYGA BITES in partnership with hip-hop musician Tyga and Mario’s Tortas Lopez, with TV host and actor Mario Lopez. That’s not to mention Pauly D’s Italian Subs, with DJ Pauly D. 

Meanwhile, rapper Wiz Khalifa has partnered with Ordermark to launch Hot Box by Wiz, a ‘munchies-inspired’ (though marijuana free) snack box for all the family. Restaurant proprietors with time on their hands can sign up by becoming a fulfilment partner with Nextbite, the delivery company owned by Ordermark. Like partnering with VDC, this allows local restaurants to bring in some much-needed cash as dine-in customer numbers remain low during the COVID-19 crisis. 

Many in the influencer space are also looking to ghost kitchens as a new, experimental sector for direct-to-consumer sales, and below we’ll learn how Youtuber Mr Beast capitalised on his social media fame to roll out a cult burger. Sam Wick, which launched Youtuber Emma Chamberlain’s coffee brand in 2019, told Business Insider that he is actively seeking out new influencer food concepts, particularly branded ghost kitchens. 

Case Studies: David Chang’s Fuku & Mr Beast Burgers

Before influencers leapt on the ghost kitchen bandwagon, celebrity chefs were driving the trend. In early 2021, celebrity chef David Chang's fried chicken ghost kitchen Fuku opened in Baltimore, following successful locations in Philadelphia, Virginia and elsewhere. The cloud kitchen from the chef who’s the face of Netflix’s smash hit Ugly Delicious serves up fried chicken treats from a mobile neighbourhood kitchen set up in a disused car park. Fuku started life as a dine-in restaurant in New York City, but the pandemic has forced it to find new ways of reaching diners. Chang attracted some criticism for opening a delivery-only kitchen when local restaurants were struggling due to the pandemic, but others lauded the chef for his good business sense.

In December 2020, an unknown burger brand launched in nearly 300 locations across the US and became a bigger overnight success than Shake Shack. MrBeast Burger, a virtual concept launched with Youtuber Mr Beast (who has 53.9m subscribers, at the time of writing), hit the top spot on the App Store chart and took in $15 million revenue in under 48 hours as fans ordered MrBeast burgers, fried and grilled cheese sandwiches from participating locations in 35 US states. The partnership is thanks to Virtual Dining Concepts, a company that works with celebs to launch delivery-only food concepts. The launch was so successful that some deliveries were hours late, due to the volume of orders, and refunds had to be given: success can come with its own drawbacks. MrBeast Burger now has plans for 500 locations, with an ambitious plan to open a total of 2,000 by 2023.

Perks & pitfalls: quality control & the ethics of the gig economy

With many participating locations, quality control may be an issue, as MrBeast Burger found out. Quality control with many different participating restaurants across state lines can be tricky to ensure, let alone manage when problems arise. 

There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. Though that’s hardly something new in the precarious restaurant industry, it is an ethical question worth considering.

2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or a restaurant struggling for business try to capitalise on that?

The 30-second pitch: Celebrity ghost kitchens

🌟 What

  • During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience.

🤷‍♂️ Why

  • With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - with the backing of celebrities to lure in hungry fans.

🍳 How

  • Virtual dining management companies (e.g. VDC, Ordermark) 
  • Delivery-only companies
  • Celebrity chef branded ghost kitchens
  • Celebrity & influencer branded ghost kitchens 

👀 Who

👍 The good

  • By partnering with logistics companies like VDC, UberEats or Ordermark, local restaurants can boost their revenue by providing ghost kitchen services for delivery.
  • Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. 
  • Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

👎 The bad

  • There can be issues with monitoring quality when many restaurants are participating in a delivery-only venture that spans state lines. 
  • The phenomenon is so far most visible in the United States - time will tell if the celebrity ghost kitchen trend will spread further afield.
  • There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. 
  • To some, virtual concept restaurants lack the authenticity of local mom-and-pop restaurants, as owners focus on churning out celebrity-branded food rather than creating original, tasty food. And who knows how long the celebrity hype will last before fans move onto the next thing?
     

💡 The bottom line 

  • 2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or struggling restaurant try to capitalise on that?
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Any ideas what the Youtuber Mr Beast, Mariah Carey and Food Network celebrity chef Guy Fieri have in common? The answer’s not exactly obvious, but all three (and many more) have recently launched their own virtual dining concepts - otherwise known as celebrity ghost kitchens or to some as ‘clout kitchens’. 

With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - over $1 billion has been invested on just the facilities that power ghost kitchens in the last two years alone. As a result, celebrity chefs, influencers and even stars from other industries have seen the dollar signs and signed up to new partnerships with delivery companies and cloud kitchens to sell branded food to hungry fans.

What exactly is a ghost kitchen? 

A ghost kitchen - also known as a cloud or virtual kitchen - is a delivery-only food business where virtual brands can prepare their food for delivery without a brick-and-mortar location. These kitchens have no dining rooms for guests, just catering facilities in key urban delivery areas. Some ghost kitchens are set up specifically for this purpose, others are repurposed restaurant facilities. During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience. 

Trend drivers: booming delivery, making ends meet & celebs with time on their hands

The main trend driver here is, of course, COVID-19 and the many challenges the pandemic has brought to bear on restaurants. Food delivery was already growing in popularity, but the pandemic hastened the trend. Delivery is the new eating out: it’s growing 300% faster than dine-in, and those in the know believe it will make up 50-60% of QSR sales within three to five years. 

For ghost kitchen logistics companies, like Virtual Dining Concepts, and chef-entrepreneurs, ghost kitchens also offer an efficient, convenient and less risky way to launch a new food venture. Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

Where food businesses are concerned, cost efficiencies are key. Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. Whereas most QSR restaurants employ 30-50 staff, ghost kitchens generally only need two or three workers per shift. This reduces costs by up to 80%. By partnering with virtual dining businesses, like VDC, struggling restaurants with extra capacity can also make up for lost income.

Thanks to the pandemic, celebrities also have more time on their hands to invest in new ventures. With lots of filming postponed and other sponsorship avenues, like live events and tours, closed off, stars have been more open to new concepts like the ghost kitchen.

Exploring the trend: celebrity chefs & star-studded partnerships 

The trend first appeared in the form of celebrity chefs launching their own virtual restaurant concepts. Pre-pandemic, TV chef Rachael Ray launched a virtual restaurant pop-up in partnership with UberEats. More recently, Guy Fieri of the Food Network has launched 100 (yes, one hundred!) virtual kitchens under the Flavortown Kitchen brand in partnership with Virtual Dining Concepts (VDC). VDC was set up by Robert Earl, former CEO of the Hard Rock Cafe and the founder of Planet Hollywood, and manages virtual kitchens. The company can install them at existing restaurants, allowing them to make extra cash from celeb-branded concepts - like the Flavortown brand. 

The company has helped launch an array of star-studded food ventures in recent times. And the craze isn’t limited to celebrity chefs anymore. It has quickly widened to other celebrities - who you might not traditionally associate with food ventures - getting on board.  Mariah’s Cookies, by none other than Mariah Carey, is a VDC partnership that launched in December 2020 - a line of freshly baked, delivery-only cookies across the US. Then there’s TYGA BITES in partnership with hip-hop musician Tyga and Mario’s Tortas Lopez, with TV host and actor Mario Lopez. That’s not to mention Pauly D’s Italian Subs, with DJ Pauly D. 

Meanwhile, rapper Wiz Khalifa has partnered with Ordermark to launch Hot Box by Wiz, a ‘munchies-inspired’ (though marijuana free) snack box for all the family. Restaurant proprietors with time on their hands can sign up by becoming a fulfilment partner with Nextbite, the delivery company owned by Ordermark. Like partnering with VDC, this allows local restaurants to bring in some much-needed cash as dine-in customer numbers remain low during the COVID-19 crisis. 

Many in the influencer space are also looking to ghost kitchens as a new, experimental sector for direct-to-consumer sales, and below we’ll learn how Youtuber Mr Beast capitalised on his social media fame to roll out a cult burger. Sam Wick, which launched Youtuber Emma Chamberlain’s coffee brand in 2019, told Business Insider that he is actively seeking out new influencer food concepts, particularly branded ghost kitchens. 

Case Studies: David Chang’s Fuku & Mr Beast Burgers

Before influencers leapt on the ghost kitchen bandwagon, celebrity chefs were driving the trend. In early 2021, celebrity chef David Chang's fried chicken ghost kitchen Fuku opened in Baltimore, following successful locations in Philadelphia, Virginia and elsewhere. The cloud kitchen from the chef who’s the face of Netflix’s smash hit Ugly Delicious serves up fried chicken treats from a mobile neighbourhood kitchen set up in a disused car park. Fuku started life as a dine-in restaurant in New York City, but the pandemic has forced it to find new ways of reaching diners. Chang attracted some criticism for opening a delivery-only kitchen when local restaurants were struggling due to the pandemic, but others lauded the chef for his good business sense.

In December 2020, an unknown burger brand launched in nearly 300 locations across the US and became a bigger overnight success than Shake Shack. MrBeast Burger, a virtual concept launched with Youtuber Mr Beast (who has 53.9m subscribers, at the time of writing), hit the top spot on the App Store chart and took in $15 million revenue in under 48 hours as fans ordered MrBeast burgers, fried and grilled cheese sandwiches from participating locations in 35 US states. The partnership is thanks to Virtual Dining Concepts, a company that works with celebs to launch delivery-only food concepts. The launch was so successful that some deliveries were hours late, due to the volume of orders, and refunds had to be given: success can come with its own drawbacks. MrBeast Burger now has plans for 500 locations, with an ambitious plan to open a total of 2,000 by 2023.

Perks & pitfalls: quality control & the ethics of the gig economy

With many participating locations, quality control may be an issue, as MrBeast Burger found out. Quality control with many different participating restaurants across state lines can be tricky to ensure, let alone manage when problems arise. 

There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. Though that’s hardly something new in the precarious restaurant industry, it is an ethical question worth considering.

2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or a restaurant struggling for business try to capitalise on that?

The 30-second pitch: Celebrity ghost kitchens

🌟 What

  • During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience.

🤷‍♂️ Why

  • With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - with the backing of celebrities to lure in hungry fans.

🍳 How

  • Virtual dining management companies (e.g. VDC, Ordermark) 
  • Delivery-only companies
  • Celebrity chef branded ghost kitchens
  • Celebrity & influencer branded ghost kitchens 

👀 Who

👍 The good

  • By partnering with logistics companies like VDC, UberEats or Ordermark, local restaurants can boost their revenue by providing ghost kitchen services for delivery.
  • Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. 
  • Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

👎 The bad

  • There can be issues with monitoring quality when many restaurants are participating in a delivery-only venture that spans state lines. 
  • The phenomenon is so far most visible in the United States - time will tell if the celebrity ghost kitchen trend will spread further afield.
  • There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. 
  • To some, virtual concept restaurants lack the authenticity of local mom-and-pop restaurants, as owners focus on churning out celebrity-branded food rather than creating original, tasty food. And who knows how long the celebrity hype will last before fans move onto the next thing?
     

💡 The bottom line 

  • 2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or struggling restaurant try to capitalise on that?

Any ideas what the Youtuber Mr Beast, Mariah Carey and Food Network celebrity chef Guy Fieri have in common? The answer’s not exactly obvious, but all three (and many more) have recently launched their own virtual dining concepts - otherwise known as celebrity ghost kitchens or to some as ‘clout kitchens’. 

With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - over $1 billion has been invested on just the facilities that power ghost kitchens in the last two years alone. As a result, celebrity chefs, influencers and even stars from other industries have seen the dollar signs and signed up to new partnerships with delivery companies and cloud kitchens to sell branded food to hungry fans.

What exactly is a ghost kitchen? 

A ghost kitchen - also known as a cloud or virtual kitchen - is a delivery-only food business where virtual brands can prepare their food for delivery without a brick-and-mortar location. These kitchens have no dining rooms for guests, just catering facilities in key urban delivery areas. Some ghost kitchens are set up specifically for this purpose, others are repurposed restaurant facilities. During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience. 

Trend drivers: booming delivery, making ends meet & celebs with time on their hands

The main trend driver here is, of course, COVID-19 and the many challenges the pandemic has brought to bear on restaurants. Food delivery was already growing in popularity, but the pandemic hastened the trend. Delivery is the new eating out: it’s growing 300% faster than dine-in, and those in the know believe it will make up 50-60% of QSR sales within three to five years. 

For ghost kitchen logistics companies, like Virtual Dining Concepts, and chef-entrepreneurs, ghost kitchens also offer an efficient, convenient and less risky way to launch a new food venture. Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

Where food businesses are concerned, cost efficiencies are key. Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. Whereas most QSR restaurants employ 30-50 staff, ghost kitchens generally only need two or three workers per shift. This reduces costs by up to 80%. By partnering with virtual dining businesses, like VDC, struggling restaurants with extra capacity can also make up for lost income.

Thanks to the pandemic, celebrities also have more time on their hands to invest in new ventures. With lots of filming postponed and other sponsorship avenues, like live events and tours, closed off, stars have been more open to new concepts like the ghost kitchen.

Exploring the trend: celebrity chefs & star-studded partnerships 

The trend first appeared in the form of celebrity chefs launching their own virtual restaurant concepts. Pre-pandemic, TV chef Rachael Ray launched a virtual restaurant pop-up in partnership with UberEats. More recently, Guy Fieri of the Food Network has launched 100 (yes, one hundred!) virtual kitchens under the Flavortown Kitchen brand in partnership with Virtual Dining Concepts (VDC). VDC was set up by Robert Earl, former CEO of the Hard Rock Cafe and the founder of Planet Hollywood, and manages virtual kitchens. The company can install them at existing restaurants, allowing them to make extra cash from celeb-branded concepts - like the Flavortown brand. 

The company has helped launch an array of star-studded food ventures in recent times. And the craze isn’t limited to celebrity chefs anymore. It has quickly widened to other celebrities - who you might not traditionally associate with food ventures - getting on board.  Mariah’s Cookies, by none other than Mariah Carey, is a VDC partnership that launched in December 2020 - a line of freshly baked, delivery-only cookies across the US. Then there’s TYGA BITES in partnership with hip-hop musician Tyga and Mario’s Tortas Lopez, with TV host and actor Mario Lopez. That’s not to mention Pauly D’s Italian Subs, with DJ Pauly D. 

Meanwhile, rapper Wiz Khalifa has partnered with Ordermark to launch Hot Box by Wiz, a ‘munchies-inspired’ (though marijuana free) snack box for all the family. Restaurant proprietors with time on their hands can sign up by becoming a fulfilment partner with Nextbite, the delivery company owned by Ordermark. Like partnering with VDC, this allows local restaurants to bring in some much-needed cash as dine-in customer numbers remain low during the COVID-19 crisis. 

Many in the influencer space are also looking to ghost kitchens as a new, experimental sector for direct-to-consumer sales, and below we’ll learn how Youtuber Mr Beast capitalised on his social media fame to roll out a cult burger. Sam Wick, which launched Youtuber Emma Chamberlain’s coffee brand in 2019, told Business Insider that he is actively seeking out new influencer food concepts, particularly branded ghost kitchens. 

Case Studies: David Chang’s Fuku & Mr Beast Burgers

Before influencers leapt on the ghost kitchen bandwagon, celebrity chefs were driving the trend. In early 2021, celebrity chef David Chang's fried chicken ghost kitchen Fuku opened in Baltimore, following successful locations in Philadelphia, Virginia and elsewhere. The cloud kitchen from the chef who’s the face of Netflix’s smash hit Ugly Delicious serves up fried chicken treats from a mobile neighbourhood kitchen set up in a disused car park. Fuku started life as a dine-in restaurant in New York City, but the pandemic has forced it to find new ways of reaching diners. Chang attracted some criticism for opening a delivery-only kitchen when local restaurants were struggling due to the pandemic, but others lauded the chef for his good business sense.

In December 2020, an unknown burger brand launched in nearly 300 locations across the US and became a bigger overnight success than Shake Shack. MrBeast Burger, a virtual concept launched with Youtuber Mr Beast (who has 53.9m subscribers, at the time of writing), hit the top spot on the App Store chart and took in $15 million revenue in under 48 hours as fans ordered MrBeast burgers, fried and grilled cheese sandwiches from participating locations in 35 US states. The partnership is thanks to Virtual Dining Concepts, a company that works with celebs to launch delivery-only food concepts. The launch was so successful that some deliveries were hours late, due to the volume of orders, and refunds had to be given: success can come with its own drawbacks. MrBeast Burger now has plans for 500 locations, with an ambitious plan to open a total of 2,000 by 2023.

Perks & pitfalls: quality control & the ethics of the gig economy

With many participating locations, quality control may be an issue, as MrBeast Burger found out. Quality control with many different participating restaurants across state lines can be tricky to ensure, let alone manage when problems arise. 

There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. Though that’s hardly something new in the precarious restaurant industry, it is an ethical question worth considering.

2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or a restaurant struggling for business try to capitalise on that?

The 30-second pitch: Celebrity ghost kitchens

🌟 What

  • During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience.

🤷‍♂️ Why

  • With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - with the backing of celebrities to lure in hungry fans.

🍳 How

  • Virtual dining management companies (e.g. VDC, Ordermark) 
  • Delivery-only companies
  • Celebrity chef branded ghost kitchens
  • Celebrity & influencer branded ghost kitchens 

👀 Who

👍 The good

  • By partnering with logistics companies like VDC, UberEats or Ordermark, local restaurants can boost their revenue by providing ghost kitchen services for delivery.
  • Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. 
  • Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

👎 The bad

  • There can be issues with monitoring quality when many restaurants are participating in a delivery-only venture that spans state lines. 
  • The phenomenon is so far most visible in the United States - time will tell if the celebrity ghost kitchen trend will spread further afield.
  • There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. 
  • To some, virtual concept restaurants lack the authenticity of local mom-and-pop restaurants, as owners focus on churning out celebrity-branded food rather than creating original, tasty food. And who knows how long the celebrity hype will last before fans move onto the next thing?
     

💡 The bottom line 

  • 2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or struggling restaurant try to capitalise on that?

Any ideas what the Youtuber Mr Beast, Mariah Carey and Food Network celebrity chef Guy Fieri have in common? The answer’s not exactly obvious, but all three (and many more) have recently launched their own virtual dining concepts - otherwise known as celebrity ghost kitchens or to some as ‘clout kitchens’. 

With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - over $1 billion has been invested on just the facilities that power ghost kitchens in the last two years alone. As a result, celebrity chefs, influencers and even stars from other industries have seen the dollar signs and signed up to new partnerships with delivery companies and cloud kitchens to sell branded food to hungry fans.

What exactly is a ghost kitchen? 

A ghost kitchen - also known as a cloud or virtual kitchen - is a delivery-only food business where virtual brands can prepare their food for delivery without a brick-and-mortar location. These kitchens have no dining rooms for guests, just catering facilities in key urban delivery areas. Some ghost kitchens are set up specifically for this purpose, others are repurposed restaurant facilities. During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience. 

Trend drivers: booming delivery, making ends meet & celebs with time on their hands

The main trend driver here is, of course, COVID-19 and the many challenges the pandemic has brought to bear on restaurants. Food delivery was already growing in popularity, but the pandemic hastened the trend. Delivery is the new eating out: it’s growing 300% faster than dine-in, and those in the know believe it will make up 50-60% of QSR sales within three to five years. 

For ghost kitchen logistics companies, like Virtual Dining Concepts, and chef-entrepreneurs, ghost kitchens also offer an efficient, convenient and less risky way to launch a new food venture. Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

Where food businesses are concerned, cost efficiencies are key. Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. Whereas most QSR restaurants employ 30-50 staff, ghost kitchens generally only need two or three workers per shift. This reduces costs by up to 80%. By partnering with virtual dining businesses, like VDC, struggling restaurants with extra capacity can also make up for lost income.

Thanks to the pandemic, celebrities also have more time on their hands to invest in new ventures. With lots of filming postponed and other sponsorship avenues, like live events and tours, closed off, stars have been more open to new concepts like the ghost kitchen.

Exploring the trend: celebrity chefs & star-studded partnerships 

The trend first appeared in the form of celebrity chefs launching their own virtual restaurant concepts. Pre-pandemic, TV chef Rachael Ray launched a virtual restaurant pop-up in partnership with UberEats. More recently, Guy Fieri of the Food Network has launched 100 (yes, one hundred!) virtual kitchens under the Flavortown Kitchen brand in partnership with Virtual Dining Concepts (VDC). VDC was set up by Robert Earl, former CEO of the Hard Rock Cafe and the founder of Planet Hollywood, and manages virtual kitchens. The company can install them at existing restaurants, allowing them to make extra cash from celeb-branded concepts - like the Flavortown brand. 

The company has helped launch an array of star-studded food ventures in recent times. And the craze isn’t limited to celebrity chefs anymore. It has quickly widened to other celebrities - who you might not traditionally associate with food ventures - getting on board.  Mariah’s Cookies, by none other than Mariah Carey, is a VDC partnership that launched in December 2020 - a line of freshly baked, delivery-only cookies across the US. Then there’s TYGA BITES in partnership with hip-hop musician Tyga and Mario’s Tortas Lopez, with TV host and actor Mario Lopez. That’s not to mention Pauly D’s Italian Subs, with DJ Pauly D. 

Meanwhile, rapper Wiz Khalifa has partnered with Ordermark to launch Hot Box by Wiz, a ‘munchies-inspired’ (though marijuana free) snack box for all the family. Restaurant proprietors with time on their hands can sign up by becoming a fulfilment partner with Nextbite, the delivery company owned by Ordermark. Like partnering with VDC, this allows local restaurants to bring in some much-needed cash as dine-in customer numbers remain low during the COVID-19 crisis. 

Many in the influencer space are also looking to ghost kitchens as a new, experimental sector for direct-to-consumer sales, and below we’ll learn how Youtuber Mr Beast capitalised on his social media fame to roll out a cult burger. Sam Wick, which launched Youtuber Emma Chamberlain’s coffee brand in 2019, told Business Insider that he is actively seeking out new influencer food concepts, particularly branded ghost kitchens. 

Case Studies: David Chang’s Fuku & Mr Beast Burgers

Before influencers leapt on the ghost kitchen bandwagon, celebrity chefs were driving the trend. In early 2021, celebrity chef David Chang's fried chicken ghost kitchen Fuku opened in Baltimore, following successful locations in Philadelphia, Virginia and elsewhere. The cloud kitchen from the chef who’s the face of Netflix’s smash hit Ugly Delicious serves up fried chicken treats from a mobile neighbourhood kitchen set up in a disused car park. Fuku started life as a dine-in restaurant in New York City, but the pandemic has forced it to find new ways of reaching diners. Chang attracted some criticism for opening a delivery-only kitchen when local restaurants were struggling due to the pandemic, but others lauded the chef for his good business sense.

In December 2020, an unknown burger brand launched in nearly 300 locations across the US and became a bigger overnight success than Shake Shack. MrBeast Burger, a virtual concept launched with Youtuber Mr Beast (who has 53.9m subscribers, at the time of writing), hit the top spot on the App Store chart and took in $15 million revenue in under 48 hours as fans ordered MrBeast burgers, fried and grilled cheese sandwiches from participating locations in 35 US states. The partnership is thanks to Virtual Dining Concepts, a company that works with celebs to launch delivery-only food concepts. The launch was so successful that some deliveries were hours late, due to the volume of orders, and refunds had to be given: success can come with its own drawbacks. MrBeast Burger now has plans for 500 locations, with an ambitious plan to open a total of 2,000 by 2023.

Perks & pitfalls: quality control & the ethics of the gig economy

With many participating locations, quality control may be an issue, as MrBeast Burger found out. Quality control with many different participating restaurants across state lines can be tricky to ensure, let alone manage when problems arise. 

There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. Though that’s hardly something new in the precarious restaurant industry, it is an ethical question worth considering.

2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or a restaurant struggling for business try to capitalise on that?

The 30-second pitch: Celebrity ghost kitchens

🌟 What

  • During the pandemic, ghost kitchens have increasingly been seen teaming up with superstar chefs and celebrities to bring delivery-only food options to a hungry audience.

🤷‍♂️ Why

  • With restaurants closed or empty thanks to the pandemic, food delivery has skyrocketed, growing 158% year on year in August 2020. Ghost kitchens, and associated logistics companies, have stepped in to facilitate the trend - with the backing of celebrities to lure in hungry fans.

🍳 How

  • Virtual dining management companies (e.g. VDC, Ordermark) 
  • Delivery-only companies
  • Celebrity chef branded ghost kitchens
  • Celebrity & influencer branded ghost kitchens 

👀 Who

👍 The good

  • By partnering with logistics companies like VDC, UberEats or Ordermark, local restaurants can boost their revenue by providing ghost kitchen services for delivery.
  • Delivery-only ventures allow struggling restaurants to cut outgoings, especially costs surrounding staff. 
  • Ghost kitchens equal minimal startup costs, much higher margins than a traditional restaurant if successful and the potential for unlimited growth. And by partnering with a celebrity or winning the backing of a high-profile chef, these advantages can be supercharged.

👎 The bad

  • There can be issues with monitoring quality when many restaurants are participating in a delivery-only venture that spans state lines. 
  • The phenomenon is so far most visible in the United States - time will tell if the celebrity ghost kitchen trend will spread further afield.
  • There’s also the awkward fact that most delivery-only ventures, similar to Uber and Deliveroo, rely on the same set of workers - so-called ‘gig economy’ workers who aren’t classed as employees and do not therefore receive the same benefits as salaried staff. 
  • To some, virtual concept restaurants lack the authenticity of local mom-and-pop restaurants, as owners focus on churning out celebrity-branded food rather than creating original, tasty food. And who knows how long the celebrity hype will last before fans move onto the next thing?
     

💡 The bottom line 

  • 2021 is highly likely to bring a raft of branded celebrity and influencer cloud kitchens. Most fans love food, so why wouldn’t a social media superstar or struggling restaurant try to capitalise on that?
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