January 23, 2021
In a COVID-19-plagued community, the restaurant industry is facing steeper hurdles than ever before. With no way to serve customers in person, many dining institutions are facing two hard choices: moving to a delivery-only service model or shutting down to wait out the storm.
In spite of these challenging changes, a delivery-based operation can be an excellent way to keep customers and drive revenue in this challenging time. For those unsure of how to capitalize on this opportunity, a virtual kitchen may be the best possible opportunity.
The virtual kitchen idea isn't exactly new, but as the times change, the concept is becoming more relevant than ever.
Unlike a standard restaurant kitchen, in which the primary purpose is to feed customers at their tables, a virtual kitchen operates behind the scenes to produce food designed specifically for delivery. There's no need to maintain a fancy space, make room for tables, or hire a full staff. Instead, food is cooked in a modest kitchen area and delivered to homes and offices rather than tables and barstools. Virtual kitchens can be used to take advantage of niche markets that don't currently have a footing in an area, sample new menu ideas, or even as a pop-up concept.
If starting a virtual kitchen, whether as a new brand to take advantage of a delivery-heavy market or to supplement current restaurant operations, appeals to you, these steps can help you bring your vision to life.
Commercial kitchens are heavily regulated in many states. This can range from cleaning protocols to operating licenses. Before setting up shop, make sure you understand both state and city laws, including any licenses and certifications for both you and your business, health department inspections, and even business permits. Failing to establish your company by the book could result in steep fines down the road, so stick to the letter of the law in arranging operations.
When food service is your primary function, a great kitchen is a must. The kind of kitchen setup you require will vary based on everything from cuisine to size and scale. For example, a burger place may require access to a large grill area, while a Chinese restaurant may need space for woks.
Available space can vary greatly based on where you live and the resources in your area. Options might include local kitchens that are either closed during this time or that have additional space due to limited operations. If these aren't available, there are resources, like Cloud Kitchens, that exist to pair virtual startups with commercial kitchen space.
Before getting into the kitchen, you need a menu. In most cases, this will be an abbreviated version of a traditional menu as not all dishes will work well in a delivery context. The menu you choose can be a favourite cuisine, an area of expertise, or a trendier cuisine that's currently missing from the market. For example, if bahn mi is popular in your area but the only shop in the area closed, this could be a valuable direction.
Sourcing for a restaurant isn't as easy as going to the grocery store. In order to manage demand, finding a supplier that can provide the ingredients you need on the schedule you require is key. Food isn't the only essential, however; you will also need access to packaging material, like to-go cups, boxes, and bags.
Regarding partners, you can benefit from fast complimentary products, such as Ben & Jerry's, Cheesecake Factory or Cinnabon, and we hear they're increasingly open to exploring collaborations and virtual franchises. At the same time, there's virtual franchises and consultancy services like Virtuateur who will help you with virtually anything you need, from creating menus that resonate within your audience, to sourcing suppliers, ingredients or help you onboard third party delivery apps.
Even just five years ago, ordering by phone was fairly common in many areas, but that is no longer the case. Most customers aren't interested in even going to a restaurant's website; instead, delivery services such as UberEats and DoorDash are the new standard. Diners prefer to visit one website, choose from favourite spots, and place an order in one convenient place. While many restaurants do succeed without joining the most popular sites, it's far harder for a new name to break into the market without taking advantage of the biggest platforms.
Diversification is an extremely important part of succeeding in the competitive delivery marketplace. Many diners have preferences – while some won't deviate from GrubHub, others are dedicated to UberEats – so failing to spread your presence as far as possible can be a detriment to ongoing business. In a heavily fragmented industry, market leaders like GrubHub and DoorDash tend to account for around 20% of the local online market, so failing to capitalize appropriately on multiple platforms can mean leaving money on the table.
Some restaurateurs shy away from this option due to the complications, but this can be a bad move. While it's true that each platform generally uses its own ordering system and tablet, sitting in a sea of tablets in the kitchen isn't the only way to handle incoming orders. Platforms like Cuboh let restaurants consolidate all ordering resources into one streamlined application, making it easy to coordinate deliveries across all of the major players. While delivery drivers will still come from a variety of sources, orders can be managed quickly and conveniently, guaranteeing maximum revenue.
Navigating the current environment is stressful and somewhat scary, but there is a little light on the horizon. As restaurants embrace new opportunities and avenues, it's possible to drive enough revenue to maintain operations through this tough time. If you want to best manage the COVID-19 roadblocks, we can help. Book a 15-minute consultation to learn more about breaking into online ordering and winning the virtual kitchen game.
The second part (of this two part series), where we explore virtual kitchens further, from incorporating one to your existent restaurant to creating one from scratch.
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