Ghost kitchens: threat or opportunity?

Ghost kitchens: threat or opportunity?

By
Laura Robinson
May 26, 2020

Eating in is now the new eating out - and food delivery is booming. Growing 300% faster than dine-in, experts claim that it will make up 50-60% of quick-serve restaurants’ sales within the next three to five years.

But how can the food service scale up to meet this growing demand? One solution is the mysteriously named ghost – cloud or dark – kitchen. For advocates, they’re the future of experiential retail. While critics claim that they will flood the market and make it impossible for independent brick and mortar restaurants to compete.

Either way, one thing’s for sure: the concept is proving to be one juicy worm for big fish in the food and delivery world. Amazon has invested millions in Deliveroo. Travis Kalanick’s concept has whet Saudi Arabian investors’ appetites to the tune of $400 million. And Panda Selected - China’s leading shared kitchen company - recently bagged $50 million in series C financing.

So, ghost kitchens: friend or foe? Let’s demystify this spooky phenomenon by taking a closer look at the pros, the cons and the brands that are benefitting.

So, what is a ghost kitchen?

According to US celebrity chef, Eric Greenspan, a ghost kitchen is the physical place where virtual brands – a delivery-only food concept - can be created without their own brick and mortar location. Brands rent kitchen space from a company with facilities in key urban delivery areas, advertise on third party apps and deliver out to customers. They can help restaurants increase delivery capacity for an existing brand or enable budding food entrepreneurs to launch a new concept.

Greenspan stresses that the term is often used interchangeably with “virtual restaurant”, even though the concepts vary. Virtual restaurants use their own kitchen spaces to create delivery-only menus, rather than renting from third parties. This might be a good option for restaurants that have extra production space or kitchen capacity and want to bring in extra revenue - typically by identifying a gap in the market and developing a concept to fill it.

Trend drivers: convenience, variety and lower barriers to entry

Food delivery has been growing in popularity for some time, thanks to smartphone supremacy and demand for convenience. But, of course, the COVID-19 pandemic has added a fair few slugs of fuel to the fire. Experts put this down to the “lipstick index” effect. When we’re tightening our belts, food delivery is one of life’s little luxuries that we continue to splurge on. The question is how to ensure that supply meets demand and make sure that the right food is available at the right place and time. Ghost kitchens provide an alternative model to offer delivery-hungry millennials the affordable variety they crave.

When it comes to food businesses, cost efficiencies are a key driver. Margins for typical dine-in restaurants are notoriously thin. In addition to food purchases and staff costs, owners need to consider long term rental contracts, utilities, equipment leases and operating fees and licenses. Ghost kitchens remove many of these barriers to entry and reduce much of the set-up admin headache. Staff costs are a particular case in point. While most quick-service chains employ thirty to fifty people, ghost kitchens typically only require two people per shift, reducing costs by 75 – 80%.

Business benefits: flexibility to respond to emerging trends

Due to lower upfront costs, ghost kitchens can be an affordable way of testing out a new concept with minimal commitment. Experts claim that successful entrepreneurs tend to take one of two directions. Some launch several brands in a single category, while others create offers for multiple cuisines made from the same range of ingredients. This approach provides a greater level of flexibility. If a concept isn’t working for consumers, you can shut it down and start something new – something that’s a lot more challenging when operating out of a brick and mortar location.

And it’s not just individual restaurants that are riding this trend. A new generation of delivery-only hospitality operators, like C3 and Salted, are jumping on the bandwagon. Through a mix of existing retail locations and ghost kitchen providers, both companies have launched a number of “better for you” brands – from cauliflower pizza to healthier variations of Chinese or Korean classics – that consumers currently can’t get enough of. C3 claims that it costs them $60k to set up each kitchen, reaching profitability in around six months at a $1 million run-rate.    

Challenges: competition and brand building

As rosy as it sounds, there are a few things that potential ghost kitchen entrepreneurs need to bear in mind.

Yes, brands have access to a large pool of existing customers via third party apps. But this is the equivalent of competing in a giant virtual food court, alongside a plethora of experienced and well-known brands. Virtual restaurants have no physical shop front to draw in curious or hungry walk-in traffic. And even getting positive press coverage doesn’t guarantee a rise in sales if the area you’re covered in falls outside of your delivery radius.

As Swiss delivery platform Smood noted in a recent interview, ghost kitchens may only be an option for restaurants if they already have a strong brand presence. When customers have already enjoyed your food in a physical restaurant, they’re more confident about the quality they’ll receive when ordering virtually. So newcomers really need to master social media and brand building to find other ways to make their offer stand out.

From data analytics to accelerators: CloudKitchens and Karma Kitchen

Travis Kalanik witnessed the food delivery boom firsthand as former CEO at Uber. So it’s hardly surprising that he’s now investing heavily in the development of CloudKitchens. Beyond its core business of renting kitchen facilities on a monthly basis, the company offers its tenants data analytics support. Some claim that this information is more valuable than the rent itself, providing the CloudKitchens with insights into customer preferences that they could leverage through their own offers. Last year, the concept bagged $400 million in investment - shadowing the $50 and $15 million raised by its key competitors. Kalanik now has plans to expand both domestically and in a number of key global markets, including China, India and the UK.

On the other side of the pond, Eccie and Gini Newton, co-founders of Karma Kitchen are approaching the opportunity from a different perspective. Having set up and grown a successful catering company, the sisters know exactly how important it is to get kitchen operations right from day one. Their spaces are rented in shifts and offer everything a business needs to grow – from kitchen porters and community managers to the latest equipment. In summer 2019, the company partnered with Uber to launch an accelerator programme to provide brands looking to cater to unmet demand – as identified on the Uber Eats platform - with operations, branding and marketing support.

Ghostly efficiency may work for some - but let’s not lose the human touch

Delivery isn’t going away. But food service entrepreneurs will have to consider carefully if the ghost kitchen model is right for them. If you’re a restaurant with a strong existing brand or want to quickly and cheaply test demand for a novel concept, you may just be onto something.  

But those who make the leap mustn’t forget that even food created in a ghost kitchen shouldn’t lose its human touch. When it comes to your favourite restaurant, was it that delicious dish alone or that quirky waiter that kept you coming back? People love brands with personality. So new concepts that use online channels creatively to help their virtual concepts feel human and social are most likely to keep customers coming back.

Thinking of launching a virtual brand? Here are some things to consider:

  • Find a concept that fills a genuine gap in your local market. A better-for-you version of the most popular takeaway dishes or new cuisines that help third-party platforms diversify their offer are good choices.

  • Pick a small number of dishes with good margins that travel well - and make sure you factor in delivery fees when setting your prices.

  • Create an Instagram or Facebook account to build some buzz for your brand on social media.

Written by
Laura Robinson

From policy geek to digital consultant, Laura has always enjoyed bringing people together through words or tools to drive positive change. She is most proud of finally taking the leap into entrepreneurship by founding Pink Pear Agency - a network of passionate specialists who help food businesses grow innovative projects and share their stories with the world. Laura is currently interested in project development and management, digital tools, content strategy and copywriting.

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Eating in is now the new eating out - and food delivery is booming. Growing 300% faster than dine-in, experts claim that it will make up 50-60% of quick-serve restaurants’ sales within the next three to five years.

But how can the food service scale up to meet this growing demand? One solution is the mysteriously named ghost – cloud or dark – kitchen. For advocates, they’re the future of experiential retail. While critics claim that they will flood the market and make it impossible for independent brick and mortar restaurants to compete.

Either way, one thing’s for sure: the concept is proving to be one juicy worm for big fish in the food and delivery world. Amazon has invested millions in Deliveroo. Travis Kalanick’s concept has whet Saudi Arabian investors’ appetites to the tune of $400 million. And Panda Selected - China’s leading shared kitchen company - recently bagged $50 million in series C financing.

So, ghost kitchens: friend or foe? Let’s demystify this spooky phenomenon by taking a closer look at the pros, the cons and the brands that are benefitting.

So, what is a ghost kitchen?

According to US celebrity chef, Eric Greenspan, a ghost kitchen is the physical place where virtual brands – a delivery-only food concept - can be created without their own brick and mortar location. Brands rent kitchen space from a company with facilities in key urban delivery areas, advertise on third party apps and deliver out to customers. They can help restaurants increase delivery capacity for an existing brand or enable budding food entrepreneurs to launch a new concept.

Greenspan stresses that the term is often used interchangeably with “virtual restaurant”, even though the concepts vary. Virtual restaurants use their own kitchen spaces to create delivery-only menus, rather than renting from third parties. This might be a good option for restaurants that have extra production space or kitchen capacity and want to bring in extra revenue - typically by identifying a gap in the market and developing a concept to fill it.

Trend drivers: convenience, variety and lower barriers to entry

Food delivery has been growing in popularity for some time, thanks to smartphone supremacy and demand for convenience. But, of course, the COVID-19 pandemic has added a fair few slugs of fuel to the fire. Experts put this down to the “lipstick index” effect. When we’re tightening our belts, food delivery is one of life’s little luxuries that we continue to splurge on. The question is how to ensure that supply meets demand and make sure that the right food is available at the right place and time. Ghost kitchens provide an alternative model to offer delivery-hungry millennials the affordable variety they crave.

When it comes to food businesses, cost efficiencies are a key driver. Margins for typical dine-in restaurants are notoriously thin. In addition to food purchases and staff costs, owners need to consider long term rental contracts, utilities, equipment leases and operating fees and licenses. Ghost kitchens remove many of these barriers to entry and reduce much of the set-up admin headache. Staff costs are a particular case in point. While most quick-service chains employ thirty to fifty people, ghost kitchens typically only require two people per shift, reducing costs by 75 – 80%.

Business benefits: flexibility to respond to emerging trends

Due to lower upfront costs, ghost kitchens can be an affordable way of testing out a new concept with minimal commitment. Experts claim that successful entrepreneurs tend to take one of two directions. Some launch several brands in a single category, while others create offers for multiple cuisines made from the same range of ingredients. This approach provides a greater level of flexibility. If a concept isn’t working for consumers, you can shut it down and start something new – something that’s a lot more challenging when operating out of a brick and mortar location.

And it’s not just individual restaurants that are riding this trend. A new generation of delivery-only hospitality operators, like C3 and Salted, are jumping on the bandwagon. Through a mix of existing retail locations and ghost kitchen providers, both companies have launched a number of “better for you” brands – from cauliflower pizza to healthier variations of Chinese or Korean classics – that consumers currently can’t get enough of. C3 claims that it costs them $60k to set up each kitchen, reaching profitability in around six months at a $1 million run-rate.    

Challenges: competition and brand building

As rosy as it sounds, there are a few things that potential ghost kitchen entrepreneurs need to bear in mind.

Yes, brands have access to a large pool of existing customers via third party apps. But this is the equivalent of competing in a giant virtual food court, alongside a plethora of experienced and well-known brands. Virtual restaurants have no physical shop front to draw in curious or hungry walk-in traffic. And even getting positive press coverage doesn’t guarantee a rise in sales if the area you’re covered in falls outside of your delivery radius.

As Swiss delivery platform Smood noted in a recent interview, ghost kitchens may only be an option for restaurants if they already have a strong brand presence. When customers have already enjoyed your food in a physical restaurant, they’re more confident about the quality they’ll receive when ordering virtually. So newcomers really need to master social media and brand building to find other ways to make their offer stand out.

From data analytics to accelerators: CloudKitchens and Karma Kitchen

Travis Kalanik witnessed the food delivery boom firsthand as former CEO at Uber. So it’s hardly surprising that he’s now investing heavily in the development of CloudKitchens. Beyond its core business of renting kitchen facilities on a monthly basis, the company offers its tenants data analytics support. Some claim that this information is more valuable than the rent itself, providing the CloudKitchens with insights into customer preferences that they could leverage through their own offers. Last year, the concept bagged $400 million in investment - shadowing the $50 and $15 million raised by its key competitors. Kalanik now has plans to expand both domestically and in a number of key global markets, including China, India and the UK.

On the other side of the pond, Eccie and Gini Newton, co-founders of Karma Kitchen are approaching the opportunity from a different perspective. Having set up and grown a successful catering company, the sisters know exactly how important it is to get kitchen operations right from day one. Their spaces are rented in shifts and offer everything a business needs to grow – from kitchen porters and community managers to the latest equipment. In summer 2019, the company partnered with Uber to launch an accelerator programme to provide brands looking to cater to unmet demand – as identified on the Uber Eats platform - with operations, branding and marketing support.

Ghostly efficiency may work for some - but let’s not lose the human touch

Delivery isn’t going away. But food service entrepreneurs will have to consider carefully if the ghost kitchen model is right for them. If you’re a restaurant with a strong existing brand or want to quickly and cheaply test demand for a novel concept, you may just be onto something.  

But those who make the leap mustn’t forget that even food created in a ghost kitchen shouldn’t lose its human touch. When it comes to your favourite restaurant, was it that delicious dish alone or that quirky waiter that kept you coming back? People love brands with personality. So new concepts that use online channels creatively to help their virtual concepts feel human and social are most likely to keep customers coming back.

Thinking of launching a virtual brand? Here are some things to consider:

  • Find a concept that fills a genuine gap in your local market. A better-for-you version of the most popular takeaway dishes or new cuisines that help third-party platforms diversify their offer are good choices.

  • Pick a small number of dishes with good margins that travel well - and make sure you factor in delivery fees when setting your prices.

  • Create an Instagram or Facebook account to build some buzz for your brand on social media.

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Eating in is now the new eating out - and food delivery is booming. Growing 300% faster than dine-in, experts claim that it will make up 50-60% of quick-serve restaurants’ sales within the next three to five years.

But how can the food service scale up to meet this growing demand? One solution is the mysteriously named ghost – cloud or dark – kitchen. For advocates, they’re the future of experiential retail. While critics claim that they will flood the market and make it impossible for independent brick and mortar restaurants to compete.

Either way, one thing’s for sure: the concept is proving to be one juicy worm for big fish in the food and delivery world. Amazon has invested millions in Deliveroo. Travis Kalanick’s concept has whet Saudi Arabian investors’ appetites to the tune of $400 million. And Panda Selected - China’s leading shared kitchen company - recently bagged $50 million in series C financing.

So, ghost kitchens: friend or foe? Let’s demystify this spooky phenomenon by taking a closer look at the pros, the cons and the brands that are benefitting.

So, what is a ghost kitchen?

According to US celebrity chef, Eric Greenspan, a ghost kitchen is the physical place where virtual brands – a delivery-only food concept - can be created without their own brick and mortar location. Brands rent kitchen space from a company with facilities in key urban delivery areas, advertise on third party apps and deliver out to customers. They can help restaurants increase delivery capacity for an existing brand or enable budding food entrepreneurs to launch a new concept.

Greenspan stresses that the term is often used interchangeably with “virtual restaurant”, even though the concepts vary. Virtual restaurants use their own kitchen spaces to create delivery-only menus, rather than renting from third parties. This might be a good option for restaurants that have extra production space or kitchen capacity and want to bring in extra revenue - typically by identifying a gap in the market and developing a concept to fill it.

Trend drivers: convenience, variety and lower barriers to entry

Food delivery has been growing in popularity for some time, thanks to smartphone supremacy and demand for convenience. But, of course, the COVID-19 pandemic has added a fair few slugs of fuel to the fire. Experts put this down to the “lipstick index” effect. When we’re tightening our belts, food delivery is one of life’s little luxuries that we continue to splurge on. The question is how to ensure that supply meets demand and make sure that the right food is available at the right place and time. Ghost kitchens provide an alternative model to offer delivery-hungry millennials the affordable variety they crave.

When it comes to food businesses, cost efficiencies are a key driver. Margins for typical dine-in restaurants are notoriously thin. In addition to food purchases and staff costs, owners need to consider long term rental contracts, utilities, equipment leases and operating fees and licenses. Ghost kitchens remove many of these barriers to entry and reduce much of the set-up admin headache. Staff costs are a particular case in point. While most quick-service chains employ thirty to fifty people, ghost kitchens typically only require two people per shift, reducing costs by 75 – 80%.

Business benefits: flexibility to respond to emerging trends

Due to lower upfront costs, ghost kitchens can be an affordable way of testing out a new concept with minimal commitment. Experts claim that successful entrepreneurs tend to take one of two directions. Some launch several brands in a single category, while others create offers for multiple cuisines made from the same range of ingredients. This approach provides a greater level of flexibility. If a concept isn’t working for consumers, you can shut it down and start something new – something that’s a lot more challenging when operating out of a brick and mortar location.

And it’s not just individual restaurants that are riding this trend. A new generation of delivery-only hospitality operators, like C3 and Salted, are jumping on the bandwagon. Through a mix of existing retail locations and ghost kitchen providers, both companies have launched a number of “better for you” brands – from cauliflower pizza to healthier variations of Chinese or Korean classics – that consumers currently can’t get enough of. C3 claims that it costs them $60k to set up each kitchen, reaching profitability in around six months at a $1 million run-rate.    

Challenges: competition and brand building

As rosy as it sounds, there are a few things that potential ghost kitchen entrepreneurs need to bear in mind.

Yes, brands have access to a large pool of existing customers via third party apps. But this is the equivalent of competing in a giant virtual food court, alongside a plethora of experienced and well-known brands. Virtual restaurants have no physical shop front to draw in curious or hungry walk-in traffic. And even getting positive press coverage doesn’t guarantee a rise in sales if the area you’re covered in falls outside of your delivery radius.

As Swiss delivery platform Smood noted in a recent interview, ghost kitchens may only be an option for restaurants if they already have a strong brand presence. When customers have already enjoyed your food in a physical restaurant, they’re more confident about the quality they’ll receive when ordering virtually. So newcomers really need to master social media and brand building to find other ways to make their offer stand out.

From data analytics to accelerators: CloudKitchens and Karma Kitchen

Travis Kalanik witnessed the food delivery boom firsthand as former CEO at Uber. So it’s hardly surprising that he’s now investing heavily in the development of CloudKitchens. Beyond its core business of renting kitchen facilities on a monthly basis, the company offers its tenants data analytics support. Some claim that this information is more valuable than the rent itself, providing the CloudKitchens with insights into customer preferences that they could leverage through their own offers. Last year, the concept bagged $400 million in investment - shadowing the $50 and $15 million raised by its key competitors. Kalanik now has plans to expand both domestically and in a number of key global markets, including China, India and the UK.

On the other side of the pond, Eccie and Gini Newton, co-founders of Karma Kitchen are approaching the opportunity from a different perspective. Having set up and grown a successful catering company, the sisters know exactly how important it is to get kitchen operations right from day one. Their spaces are rented in shifts and offer everything a business needs to grow – from kitchen porters and community managers to the latest equipment. In summer 2019, the company partnered with Uber to launch an accelerator programme to provide brands looking to cater to unmet demand – as identified on the Uber Eats platform - with operations, branding and marketing support.

Ghostly efficiency may work for some - but let’s not lose the human touch

Delivery isn’t going away. But food service entrepreneurs will have to consider carefully if the ghost kitchen model is right for them. If you’re a restaurant with a strong existing brand or want to quickly and cheaply test demand for a novel concept, you may just be onto something.  

But those who make the leap mustn’t forget that even food created in a ghost kitchen shouldn’t lose its human touch. When it comes to your favourite restaurant, was it that delicious dish alone or that quirky waiter that kept you coming back? People love brands with personality. So new concepts that use online channels creatively to help their virtual concepts feel human and social are most likely to keep customers coming back.

Thinking of launching a virtual brand? Here are some things to consider:

  • Find a concept that fills a genuine gap in your local market. A better-for-you version of the most popular takeaway dishes or new cuisines that help third-party platforms diversify their offer are good choices.

  • Pick a small number of dishes with good margins that travel well - and make sure you factor in delivery fees when setting your prices.

  • Create an Instagram or Facebook account to build some buzz for your brand on social media.

Eating in is now the new eating out - and food delivery is booming. Growing 300% faster than dine-in, experts claim that it will make up 50-60% of quick-serve restaurants’ sales within the next three to five years.

But how can the food service scale up to meet this growing demand? One solution is the mysteriously named ghost – cloud or dark – kitchen. For advocates, they’re the future of experiential retail. While critics claim that they will flood the market and make it impossible for independent brick and mortar restaurants to compete.

Either way, one thing’s for sure: the concept is proving to be one juicy worm for big fish in the food and delivery world. Amazon has invested millions in Deliveroo. Travis Kalanick’s concept has whet Saudi Arabian investors’ appetites to the tune of $400 million. And Panda Selected - China’s leading shared kitchen company - recently bagged $50 million in series C financing.

So, ghost kitchens: friend or foe? Let’s demystify this spooky phenomenon by taking a closer look at the pros, the cons and the brands that are benefitting.

So, what is a ghost kitchen?

According to US celebrity chef, Eric Greenspan, a ghost kitchen is the physical place where virtual brands – a delivery-only food concept - can be created without their own brick and mortar location. Brands rent kitchen space from a company with facilities in key urban delivery areas, advertise on third party apps and deliver out to customers. They can help restaurants increase delivery capacity for an existing brand or enable budding food entrepreneurs to launch a new concept.

Greenspan stresses that the term is often used interchangeably with “virtual restaurant”, even though the concepts vary. Virtual restaurants use their own kitchen spaces to create delivery-only menus, rather than renting from third parties. This might be a good option for restaurants that have extra production space or kitchen capacity and want to bring in extra revenue - typically by identifying a gap in the market and developing a concept to fill it.

Trend drivers: convenience, variety and lower barriers to entry

Food delivery has been growing in popularity for some time, thanks to smartphone supremacy and demand for convenience. But, of course, the COVID-19 pandemic has added a fair few slugs of fuel to the fire. Experts put this down to the “lipstick index” effect. When we’re tightening our belts, food delivery is one of life’s little luxuries that we continue to splurge on. The question is how to ensure that supply meets demand and make sure that the right food is available at the right place and time. Ghost kitchens provide an alternative model to offer delivery-hungry millennials the affordable variety they crave.

When it comes to food businesses, cost efficiencies are a key driver. Margins for typical dine-in restaurants are notoriously thin. In addition to food purchases and staff costs, owners need to consider long term rental contracts, utilities, equipment leases and operating fees and licenses. Ghost kitchens remove many of these barriers to entry and reduce much of the set-up admin headache. Staff costs are a particular case in point. While most quick-service chains employ thirty to fifty people, ghost kitchens typically only require two people per shift, reducing costs by 75 – 80%.

Business benefits: flexibility to respond to emerging trends

Due to lower upfront costs, ghost kitchens can be an affordable way of testing out a new concept with minimal commitment. Experts claim that successful entrepreneurs tend to take one of two directions. Some launch several brands in a single category, while others create offers for multiple cuisines made from the same range of ingredients. This approach provides a greater level of flexibility. If a concept isn’t working for consumers, you can shut it down and start something new – something that’s a lot more challenging when operating out of a brick and mortar location.

And it’s not just individual restaurants that are riding this trend. A new generation of delivery-only hospitality operators, like C3 and Salted, are jumping on the bandwagon. Through a mix of existing retail locations and ghost kitchen providers, both companies have launched a number of “better for you” brands – from cauliflower pizza to healthier variations of Chinese or Korean classics – that consumers currently can’t get enough of. C3 claims that it costs them $60k to set up each kitchen, reaching profitability in around six months at a $1 million run-rate.    

Challenges: competition and brand building

As rosy as it sounds, there are a few things that potential ghost kitchen entrepreneurs need to bear in mind.

Yes, brands have access to a large pool of existing customers via third party apps. But this is the equivalent of competing in a giant virtual food court, alongside a plethora of experienced and well-known brands. Virtual restaurants have no physical shop front to draw in curious or hungry walk-in traffic. And even getting positive press coverage doesn’t guarantee a rise in sales if the area you’re covered in falls outside of your delivery radius.

As Swiss delivery platform Smood noted in a recent interview, ghost kitchens may only be an option for restaurants if they already have a strong brand presence. When customers have already enjoyed your food in a physical restaurant, they’re more confident about the quality they’ll receive when ordering virtually. So newcomers really need to master social media and brand building to find other ways to make their offer stand out.

From data analytics to accelerators: CloudKitchens and Karma Kitchen

Travis Kalanik witnessed the food delivery boom firsthand as former CEO at Uber. So it’s hardly surprising that he’s now investing heavily in the development of CloudKitchens. Beyond its core business of renting kitchen facilities on a monthly basis, the company offers its tenants data analytics support. Some claim that this information is more valuable than the rent itself, providing the CloudKitchens with insights into customer preferences that they could leverage through their own offers. Last year, the concept bagged $400 million in investment - shadowing the $50 and $15 million raised by its key competitors. Kalanik now has plans to expand both domestically and in a number of key global markets, including China, India and the UK.

On the other side of the pond, Eccie and Gini Newton, co-founders of Karma Kitchen are approaching the opportunity from a different perspective. Having set up and grown a successful catering company, the sisters know exactly how important it is to get kitchen operations right from day one. Their spaces are rented in shifts and offer everything a business needs to grow – from kitchen porters and community managers to the latest equipment. In summer 2019, the company partnered with Uber to launch an accelerator programme to provide brands looking to cater to unmet demand – as identified on the Uber Eats platform - with operations, branding and marketing support.

Ghostly efficiency may work for some - but let’s not lose the human touch

Delivery isn’t going away. But food service entrepreneurs will have to consider carefully if the ghost kitchen model is right for them. If you’re a restaurant with a strong existing brand or want to quickly and cheaply test demand for a novel concept, you may just be onto something.  

But those who make the leap mustn’t forget that even food created in a ghost kitchen shouldn’t lose its human touch. When it comes to your favourite restaurant, was it that delicious dish alone or that quirky waiter that kept you coming back? People love brands with personality. So new concepts that use online channels creatively to help their virtual concepts feel human and social are most likely to keep customers coming back.

Thinking of launching a virtual brand? Here are some things to consider:

  • Find a concept that fills a genuine gap in your local market. A better-for-you version of the most popular takeaway dishes or new cuisines that help third-party platforms diversify their offer are good choices.

  • Pick a small number of dishes with good margins that travel well - and make sure you factor in delivery fees when setting your prices.

  • Create an Instagram or Facebook account to build some buzz for your brand on social media.

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