Restaurant Revitalization Fund: How It's Benefited Ghost Kitchens and Will Continue to Help

While many may worry about how the pandemic has impacted the food and beverage industry, the United Arab Emirates (UAE) has been quietly leading a restaurant revolution. With restrictions in place around the world that prohibited inside dining, many established restaurants have turned to home delivery. The struggle to make this profitable for a physical restaurant with the high overhead costs that come from premium real estate isn't experienced in the UAE kitchens. This is because Dubai has been steadily growing a new trend of ghost kitchens that operate out of ghost kitchens.

What is a Ghost Kitchen?

A ghost kitchen, also referred to as a cloud kitchen or virtual kitchen, is a restaurant-style kitchen that prepares food for home delivery and has no in-person dining area. Ghost kitchens operate through an app-to-door ordering model with customers never setting foot in the kitchen itself.

With a ghost kitchen, a popular brand can hand over its menu and recipes and have the kitchen prepare its food while customers never know where it was made. As far as the customer knows, they ordered their favorite meal from their favorite brand and it shows up at their door in familiar packaging and tastes the same.

The ghost kitchen can operate anywhere, keeping costs down through low-rent locations in addition to the cost-saving realized through the elimination of a dining area and wait staff. Brands can expand into new areas without the expense of setting up a physical location.

The UAE Ghost Kitchen Explosion

Although ghost kitchens are operating all around the world now through traditional restaurants out of necessity, the UAE is the leader in exclusive online food delivery, with an over $800 million annual market. The majority of the 400 UAE brands are based in Dubai and operate out of 80 ghost kitchens.

The virtual trend began before the pandemic, with many startups launching in the last few years before 2020, such as Dubai-based iKcon which launched in 2019. One of the leaders of the Dubai-area ghost kitchen trend is Kitopi, which started in 2018 and has headquarters in Dubai. Kitopi has branched into five countries and is planning expansion throughout Southeast Asia after completing its quest to raise $400 million in venture capital.

Kitopi has recently partnered with Kuwait-based KLC Virtual Restaurants, the leader in the Kuwaiti market with 15 ghost kitchens and more than 50 brands, with plans to also expand into the UAE market. With this partnership, a ghost kitchen would be expanding its market through another ghost kitchen.

How Restaurants can Adapt

As restaurants around the world struggle to recover from the economic fallout of lockdowns and restrictions in a weakened market, the ghost kitchen model offers some hope. Rather than going extinct through competition by ghost kitchens, traditional restaurants have options to grow beyond their borders.

Some traditional restaurants have converted their entire space into an expanded kitchen, but their delivery radius is limited by their location. Through a partnership with a ghost kitchen, a traditional restaurant can expand its brand into a new market without having to incur the expense of opening a physical location. By expanding into new markets, restaurants have the ability to recover some of the losses experienced since the pandemic started while also experiencing new growth.

With the ghost kitchen model, restaurants are limited only by the number of people they can find who love their food in any given area. The competition will come not from the model, but from which brands make the best food. By cutting the costs of overhead, ghost kitchens can make restaurant-style cuisine affordable for more people who might not normally visit a higher-priced restaurant, expanding the ghost kitchen market itself.

Cuboh Is Your Restaurant Recovery Solution

If your restaurant has suffered from the economic stress of shutdowns or you are interested in getting started in the ghost kitchen trend, Cuboh has the tools you need to make your venture successful. Cuboh makes working with different existing delivery services easy because everything is integrated into one device. Cuboh can help your restaurant expand its delivery service and streamline the app-to-door ordering model.

As ghost kitchens expand their services worldwide, we are there to help you every step of the way. With Cuboh's reporting and data at your fingertips, you can make informed decisions about what is working and what isn't as you scale up or expand. Cuboh can integrate with your POS service or a restaurant SAAS (Software as a Service) to streamline the process as your business grows. Our integrated in-kitchen printers take the stress out of keeping track of orders so none are missed. Cuboh also has enterprise services for chains that operate out of multiple locations. Learn more about how Cuboh can help your restaurant start or expand app-to-door delivery or how to get started with a ghost kitchen through an information call and a free demo of Cuboh's services. Contact Cuboh today.

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