Everyone’s talking about the advantages of ghost kitchens – purpose-built production units, also known as dark kitchens or virtual kitchens, that use data to optimize for delivery.
They allow businesses to avoid front-of-house overheads, reducing costs while increasing revenue by reaching new off-premise customers.
By the way, if you’re asking yourself, “What is a ghost kitchen?”, here’s some reading for you.
But every food business is different. The big question needs to be answered: Is the ghost kitchen model right for your business?
The answer will depend on the dark kitchen business model you decide to operate with. And what kind of business owner you are.
So let’s take a look at who might be thinking about starting a ghost kitchen. We’ll cover how well a ghost kitchen is suited to each profile and what to consider if you find yourself in one of these categories as an entrepreneur hungry for success.
Ghost kitchens have numerous advantages over conventional restaurants, but that doesn’t mean they’re right for everyone.
Overall, you should ask yourself a few questions:
Are you ready to invest in the latest kitchen and delivery tech?
Are you more interested in pouring over data than face-to-face customer interactions?
Are you obsessed with data-driven optimization?
If the answer to all these questions is yes, there’s a good chance you’ll get on well with the ghost kitchen model. But before you jump in, here are some considerations for different business owners looking to move into this exciting new space.
The ghost kitchen model is appealing to those who are strapped for cash and want to open a low-risk business with minimal overheads.
Ghost kitchens avoid the costs of front-of-house staff and dining space and can operate with a lower marketing spend and lower setup costs than traditional restaurants.
But are they the right model to start out with? You are competing against the delivery-focused chains that have been optimizing for years. And starting from scratch, you have no customer base or reputation to give you an initial boost.
It’s true that the ghost kitchen model can provide a platform to newbies with a lower barrier to entry. So it could make sense if you are focused on building a brand without the outlay of a brick-and-mortar outlet.
But you should also consider that investment in kitchen tech, order management equipment, menu optimization, and the right team will massively improve your chances of success in the competitive delivery market. So you should be wary of trying to do it on too tight of a budget.
With more people than ever ordering food to go, many restaurants have found off-premise orders outstripping dine-in customers. Many have turned to the ghost kitchen model to make the most of this change in consumer preferences.
Rather than starting a separate ghost kitchen, these enterprising souls leverage existing kitchen space to launch delivery-only concepts from their brick-and-mortar restaurants. These virtual restaurants could offer a spin-off from their regular dine-in menu or could be completely new concepts created to satisfy specific customer demand.
This model is a relatively low-cost way to adapt and take advantage of the ghost kitchen concept without forking out for an entirely new kitchen. To make the most of your existing resources and keep staff busy at quieter times.
However, It also carries the risk of diluting your dine-in experience. One of the reasons for setting up a ghost kitchen is to maximize efficiency. You won’t get this benefit if your kitchen is not optimized for serving both dine-in and delivery customers.
The advantage of a food truck is that it is a self-contained kitchen on wheels. Meaning you have everything you need to prepare and serve your food and you can go to wherever the customers are.
In reality there are limitations to the model. Space is at a premium, good locations are hard to come by, insurance can be complex and expensive, and business is badly affected by the weather and other uncontrollable factors.
So food truck operators may well be looking to scale up and use a ghost kitchen to either centralize aspects of production or expand and reach more customers. This could be a great option especially if you have money to invest and a strong brand to build upon.
If you run a successful restaurant group with a number of popular concepts in a particular city or area, you might consider a ghost kitchen to make the most of off-premise orders. Not only can it serve as a central production kitchen, but it can also be purpose-built for takeaway and delivery orders.
A ghost kitchen could enable you to reach more customers outside the catchment area of your restaurants. With the potential to increase the efficiency of production for the whole group while also offering new opportunities for revenue generation.
This means more people are able to try more of your restaurants paving the way for exponential growth.
When you’re operating restaurant brands across nations and even at a global scale, every inch of space, every second lost, and every ounce of efficiency adds up to make a huge difference. More and more restaurant chains have been turning to some form of ghost kitchen to improve efficiency and cut overheads where possible.
Restaurant chains have the big data to pinpoint the demand in different areas and different cities. They can analyze the numbers and see exactly where a ghost kitchen makes sense over a traditional brick-and-mortar restaurant. Or where a central production kitchen is the best option to serve nearby locations while also producing meals for delivery.
Reports that chains are using ghost kitchens to recoup lost revenue from the pandemic demonstrate the value of the model. Having moved over to the model, many restaurant chains will continue to leverage the ghost kitchen model to maximize efficiency at each location.
FMCG and global enterprise brands have an even deeper need for consistency and efficiency in getting their products out to customers around the world. You might be surprised at the use cases for the ghost kitchen model for these food industry behemoths.
Ghost kitchens can be used to take control of product storage and distribution in areas where local stores are a weak link in the supply chain.
Unilever’s partnership with Deliverect is a great example. After issues storing its Ben & Jerry’s ice cream at local stores, the global brand implemented a ghost kitchen model using cold cabinets to ensure the product was delivered on time and intact with the help of Deliverect’s integrations with Deliveroo and Uber Eats.
With technology so important to the modern restaurant business, we’re now seeing entrepreneurs entering the industry from a purely tech-driven perspective. With so much data available from delivery providers and online searches, it’s an attractive prospect for techy data heads.
Those with a keen eye for analyzing the numbers relish the opportunity to quickly create virtual brands based on the demand in a certain area. The ghost kitchen model allows you to quickly pivot if demand changes, and even create seasonal restaurants at different times of the year. It also offers huge opportunities to optimize your delivery operations.
The only caution here would be to not underestimate the rigors of the restaurant business. For any techies looking to break into the food and beverage industry, you’d be wise to get an experienced chef or restaurateur on board to deal with the real-world challenges of running a busy kitchen.
On the flip side of the coin, ghost kitchens are also attractive to big-name chefs looking to make the most of their 15 minutes of fame.
Whether you’re a local chef that made your name with a popular neighborhood joint in town, or even a national TV chef opening a new line in your growing empire, you’d be wise to partner with one of the tech-savvy data heads described in the previous section so you can each concentrate on what you do best.
A ghost kitchen perfectly suits this pairing of hands-on food industry experience with data-driven tech know-how.
A ghost kitchen could be a great way to capitalize on the trend for off-premise dining. But even if it’s not right for you, you can still boost your efficiency when it comes to takeaway and delivery orders.
Deliverect helps businesses take advantage of the huge demand for delivery and takeaway that has swept the industry. It aggregates orders from all the major delivery platforms and has a ton of features to make handling orders more efficient.
Like menu management of all your platforms from one dashboard. And automatically syncing sending orders your POS so your team doesn’t have to re-punch orders.
Find out how Deliverect has helped businesses like yours take control of delivery, boosting efficiency and growing revenue.
Freelance B2B Food & Restaurant Tech Writer
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