How Virtual Brands are Disrupting the Restaurant Industry

The coronavirus pandemic continues to propel virtual brands into the mainstream world and the hospitality sector has particularly suffered one of the biggest hits. Virtual kitchens are the future of dining, at least for the foreseeable future and ghost restaurants have been popping up everywhere. The ghost kitchen concept is simple enough and involves delivery-only meals, with no room for walk-in guests. Meals preparation kitchens can also be hired by multiple ghost restaurant brands, which add interesting dynamics to the scene. Here's a quick look at how virtual brands are disrupting the restaurant industry.

What's A Virtual Brand?

As the name suggests, virtual brands lack brick-and-mortar offices and headquarters. They rely on internet technologies and integrations to deliver meals straight to the customer's doorsteps or office. Ghost kitchen startups can rent meal preparation facilities or invest in a food truck with preparation and packaging equipment. Customers interact with the virtual brand online through websites, mobile applications and third-party applications. Ghost kitchens are virtual brands, although traditional restaurants can still have ghost kitchens in addition to their walk-in facilities. Initially seen as a threat to conventional models, virtual kitchens have become essential during the pandemic. Here's how the rise of virtual kitchens and ghost restaurants is affecting the restaurant industry.

1. Low Startup and Operation Cost

The ghost restaurant concept eliminates dine-in space areas from the business model, one of the core elements of traditional restaurants. With no need for a walk-in facility, there's no need for forefront personnel. Labor and maintenance costs are also remarkably reduced when no guests are coming to the facility. You might need to invest in a ghost kitchen food truck, packaging and digital marketing. However, launching ghost kitchen companies require fewer infrastructures than brick-and-mortar restaurants.

2. Shifting Customer Behavior

Virtual restaurant brands aren't novel and were existent long before Covid-19. However, the pandemic has increased demand for delivery meals and third-party apps are big winners. Many people use ghost kitchens Uber services. GrubHub and DoorDash are also popular. The model is quite similar and involves online ordering systems (website, payment processing), third-party apps and delivery services. With the fear of catching the new virus, most people choose to stay indoors, naturally increasing the demand for delivery meals. More people are also working from home and have less time to prepare their meals.

3. Concept Experimentation

The traditional restaurant model isn't easy to pivot and there's little room to experiment. It takes several years to adopt new concepts once a facility is set up. For an Uber ghost kitchen, ideas and menus can be tested on different platforms to gauge reception. There's more room for trial and error until the brand finds a perfect fit for their customers. However, consistency will grow your Uber eats ghost kitchen brand as you identify the core offering.

Are Virtual Brands the Future of Restaurants?

The current challenges make off-premise ghost kitchens valuable and in line with efforts to prevent new infections. However, humans are social and dining with friends and family isn't about to change any time soon. With news of a possible vaccine, walk-in restaurants will be back once there's a solution for the pandemic. Nonetheless, virtual brands existed before the virus threatened the world and are projected to continue growing.

There are several merits to starting a ghost kitchen facility or restaurant, both for customers and startups. As a ghost restaurant, the challenge is to reduce meal production cost and time, and guarantee food quality. This means fewer headaches than a typical brick-and-mortar restaurant that needs food spreading, ambiance, front-of-the-house experiences, training and servicing. However, while cloud kitchens and virtual brands are set for the long-haul, they present unique challenges and call for comprehensive research before investing. The right marketing and pricing strategies are still essential for success.

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