Ghost Kitchens Explained

Ghost kitchen: It’s the buzzword on everyone’s lips in the hospitality industry lately. But what exactly is it? Basically, it’s a commercial cooking space rented by either virtual restaurants or more traditional dining venues. They exclusively focus on creating food to be delivered to customers. Unsurprisingly, interest in them has surged since the onset of COVID-19. However, this trend has actually been growing and attracting investors for years now. So why are they so popular, and what does their future look like?

It’s A Head Start for New Dining Concepts

Low overhead costs make ghost kitchens particularly appealing for businesses of all sizes. But they especially give new dining concepts a leg up in their start-up phase. Owners need less upfront capital since they won’t need to hire front of house staff or pay rent on space for a dining room. With reduced overhead, there’s less standing in the way of passionate food and beverage operators to enter the market.

Most startup brands will take advantage of one or more of the many delivery apps available. This automates the entire customer service aspect of running a food and beverage operation. So new restaurants can put more of their focus on producing delicious food. This means customers have even more access to unique chef-driven concepts.

They Let Existing Food & Beverage Operations Branch Out

Ghost kitchens are useful for existing brick-and-mortar dining operations looking to experiment and try new things. They can use ghost kitchens to break into new neighborhoods that might be too financially risky to invest in a dine-in space. They can also create hyper-specialized menus for certain areas, or even brands-within-brands, to target specific customers without muddying their existing brand image or overcomplicating their current operations.

Some larger, more established brands have even cut out the delivery middle-man and created their own proprietary apps with in-house delivery people. And since most orders are placed online, customers probably have no clue that their food was prepared in a ghost kitchen, not the brick-and-mortar location. Ghost kitchens have even collaborated with hotels recently, making use of underutilized space and adding to the hotel dining experience.

The Drawbacks

Marketing a brand with no physical footprint is a tall order. Some third-party delivery apps help out by suggesting brands based on customer searches. However, this approach only reaches existing app users. Virtual brands need their own strong web presence to engage more customers.

On top of that, quality control is much more logistically complicated than it would be in a traditional dining operation. Because of this, there is even less margin for error in the kitchen. Kitchen management and staff need to have a high level of attention to detail. Adding to that, ghost kitchens using a delivery have even less control once the food leaves the facilities. They have no say in the delivery route, food handling, and customer communication.

What’s Next for Ghost Kitchens?

While ghost kitchens certainly won’t replace in-person dining experiences entirely (how else will people post pictures of their beautifully plated meals to Instagram), we will still see more of them after the pandemic. Since these kitchens focus entirely on preparing food to go, they were already poised for success going into the pandemic. Their menu items were already developed with transportability in mind. The low overhead and payroll expenses kept profit margins and staffing stable. And, ghost brands with an strong customer base can consider opening a brick-and-mortar location in the future.

When Should a Food and Beverage Operator Consider a Ghost Kitchen?

There are so many factors to consider, and restaurant owners need a clear direction and strategy. Since traditional front-of-house roles would be obsolete, having talented culinary, marketing, and operational management becomes even more central to the success of the business. The food and beverage recruiters at Horizon Hospitality have access to the top talent in the industry and can help virtual restaurants and ghost kitchens keep up with the growing demand for food delivery. Contact Horizon Hospitality to learn more.

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