At the beginning of 2020, food industry market research firm Datassential released its “Foodbytes: 2020 Trends” report detailing consumer and marketplace habits that could prove impactful over the course of the year – and even the next decade.
In the latter pages of the report, an elusive foodservice trend materialized, one that Datassential said could reimagine and redefine what restaurants are and could be: ghost kitchens.
“Ghost kitchens continue to expand across the country, whether it’s a dedicated ghost kitchen commissary or an existing restaurant brand that creates a delivery-only concept operating out of the same kitchen,” the Datassential report stated. “If we expand the definition of a restaurant to include these options, we have the potential to create a near-infinite number or virtual ‘restaurants’ on demand: a single brick-and-mortar restaurant could, in fact, be multiple restaurant brands on a delivery platform. A restaurant brand that only exists on an app could open for a single two-hour lunch block and disappear just as quickly – LTOs could make way for LTRs (limited-time restaurants).”
Published pre-pandemic, the report’s ghost kitchen forecasts have certainly come to pass, albeit with an unanticipated intensity in light of the global COVID-19 crisis.
The coronavirus climate has demanded that foodservice operators make sweeping adjustments to keep business afloat amid public restrictions and new safety measures. With their dining rooms destined to be emptier in 2020, operators began thinking beyond the brick-and-mortar and, naturally, some of them started seeing ghost kitchens as a viable pivot-point, according to Datassential Group Manager Mark Brandau.
“If restaurants have been forced to shut down their dining rooms, then this model is an option to diversify a little bit and survive the pandemic,” Brandau told SeafoodSource.
The formation of the ghost kitchen model really began a few years back, Brandau said, as digital delivery services like DoorDash, Uber Eats, and Postmates, among others, rose in prominence.
“It’s hard to pinpoint exactly when a trend like this starts. It’s safe to say, though, that [ghost kitchens] didn’t exist before Uber Eats, Postmates, DoorDash, and all of these food delivery services really started popping up – especially these kind of app-based, GPS-based platforms,” Brandau said. “A ghost kitchen leverages this food technology that’s out there and it allows a restaurant to exist without a brick-and-mortar location where people are going to come and dine in.”
A few key ingredients tend to comprise a ghost kitchen: a virtual brand, a kitchen commissary, a menu, a delivery method, and a marketing budget. When combined together successfully, these elements can create a foodservice model in a fraction of the time and with fewer costs than a standard restaurant operation, Brandau explained.
“If you have the wherewithal to set up a brand that’s wholly online and you have either a commissary or kitchen space in an existing restaurant that you can use to execute a limited menu – while getting it delivered either through one of these third-party services or managing delivery yourself (which is a huge technology investment) – then you can be up and running with a restaurant concept in probably a fraction of the time and cost that it would take to set up in a brick-and-mortar restaurant location,” Brandau said.
“It’s basically a stationary food truck, and then other drivers take your food from you to the end-customer,” he added.
From unknown to necessity
In 2019, the ghost kitchen model was showing promise, landing it on analysts’ radars as a trend expected to grow incrementally over time. That trajectory underwent an inevitable shift with the arrival of COVID-19, Brandau said.
“The pandemic has definitely been an accelerant to this trend that has been running for a couple years,” he said. “I think that in normal times, this trend would still be growing by a lot, and be a little bit more of a supplemental thing for an established restaurant. And we were starting to see that late last year and earlier this year before everything changed – it was another way for some restaurants to either experiment with some new menu ideas or expand into different markets where a brick-and-mortar restaurant wasn’t totally viable.”
Restaurants have been getting involved in the ghost kitchen concept in different ways as the pandemic has unfolded.
Ruby Tuesday’s, an established American franchise and brand, has seen one of its locations in Lebanon, Pennsylvania, double as a ghost kitchen for The Captain’s Boil, a seafood franchise based in Canada, LebTown reported in September. Meanwhile, in October, Matt Dean Pettit launched COAST, a seafood ghost kitchen being run out of Toronto’s Pearl Diver restaurant. According to blogTO, consumers can order COAST dishes – including lobster rolls and lobster poutine – via Uber Eats, SkipTheDish, and DoorDash.
Brandau said he’s seen more than just restaurants and foodservice operators embracing the model, too – consumers are also eager to engage with the category, especially when so much of their activity has been confined to the home.
“The way that the pandemic has transformed ghost kitchens is that they’ve become a necessity for a lot of restaurants. Also, they’ve become somewhat of a necessity, too, for restaurant consumers. A lot of consumers are trying more of these food delivery apps, and so there’s more exposure and more trial,” Brandau said.
In a sense, the ghost kitchen concept can give struggling restaurants new life, with consumers indicating to Datassential that they would continue to support their favorite establishments in their new digital formats.
“We have asked consumers, ‘If one of your favorite restaurants had to shut down because of the pandemic, would you be open to supporting them as a ghost kitchen?’ And consumers are plenty comfortable with that idea. Everybody gets the situation that we’re in, and if restaurants have to do this model, they’re willing to go find them wherever they’re still operating,” Brandau said.
While more big brands have been developing and participating in ghost kitchens as a way to “diversify and survive when dining rooms have been either shut down or have had to reduce their capacity,” Brandau said some restaurants may drop the ghost-kitchen model post-pandemic.
“I don’t know if the big restaurants will need to keep their virtual brands going beyond the pandemic,” he said.
However, that’s not to say that ghost kitchens won’t persist when on-premise dining makes its comeback.
“I don’t see a situation where people are just going to sort of drop their interest and usage of these new off-premise ordering strategies, because they are incredibly convenient,” Brandau said.
It’s far more likely, according to Brandau, that on-premise and off-premise dining formats will coexist in the future.
“On-premise dining certainly won’t be going to go away,” he said. ”We’ll still go out to eat and celebrate at restaurants and gather with friends again when we can. But, just think about how easy it’s been to adopt some of these new, convenient things, and those don’t really go away when they prove their worth. I think that’s going to be the case with certainly a lot of these thirdparty food delivery apps and maybe ghost restaurants, too.”
A safe bet, but a heavy lift
For seafood-focused establishments considering the ghost kitchen model, there are certain factors to be aware of, including the kinds of dishes to put on offer, packaging, and real estate, Brandau noted.
“I think for seafood in particular, it’s kind of a heavy lift. It’s a type of food that’s going to take a little bit more ingenuity,” Brandau said. “Seafood doesn’t travel as well as wings or pizza do, which might mean you have to limit your menu a little bit in terms of what you try to execute with a ghost kitchen. You might sell a lot more popcorn shrimp or something like a lobster roll – that can probably be a really good product that can travel.”
All types of restaurants weighing the idea of “going ghost” must put a lot of brain power into their packaging, Brandau said, in terms of both safety and product integrity.
“Anytime you’re trying to deliver any kind of food, figuring out the packaging is a really big challenge, and not just for helping seafood keep well,” he said. “Packaging has changed in the pandemic, where people are looking for a lot more indication that the food is safe. Everybody now does tamper-proof seals on everything that they put into packaging and bags. Everybody’s got to figure out packaging, and that’s certainly the case with seafood restaurants.”
Having a strategically-located kitchen can also have a considerable impact on the success of a seafood brand in this category.
“It matters where your kitchen is located. Is the kitchen going to be close to both the source of the seafood and then the trade market where you’re trying to deliver it? Finding that right location where your commissary or kitchen trailer is close enough to both the source and the end-customer is a hard needle to thread,” Brandau explained.
Another critical component to ghost kitchen operations is marketing. Although “it doesn’t always make a huge difference to consumers whether they’ve heard of a brand or not” while ordering on an app delivery platform, Brandau said, they do have to know that the option is available. With ghost kitchens, marketing is the key to getting this done.
“If you’re starting a virtual brand, you basically have to build a new restaurant concept out of whole cloth and then you have to market it on these platforms where people don’t know that they’re looking for you. The way that you do that – and the way that any existing restaurant gets in front of people on these apps – is that often you can pay for placement to boost your brand in search results,” Brandau said. “This all becomes part of your marketing cost. Can you budget enough in your marketing budget to build the brand and then boost search to make sure you’re completing these transactions?”
Brandau doesn’t mince words – it can be hard work to get a ghost kitchen seen.
“It’s hard enough with brick-and-mortar restaurants to get real estate right, to get marketing right, much less build a menu, so converting that all to an online environment with a ghost kitchen raises the degree of difficulty over every aspect,” he said.
Operations that can shoulder the heavy lift, though, stand to be rewarded: Brandau said ghost kitchens are “a safe bet over the long term,” even if the trend’s growth cools down a bit once pandemic pressures ease.
Photo courtesy of Kcuxen/Shutterstock
