Signs of Sustainable Growth In A Ghost Kitchen

Ghost kitchens are the hottest new restaurant trend born of necessity from circumstances surrounding the pandemic. Yelp data shows that 60% of foodservice businesses have closed since the beginning of the pandemic. Business Insider cites the number of permanently closed restaurants in the United States as closer to 110,000 in the first six months of 2020 alone. Over 5,000,000 Americans work in food service, some of them spending four or more years in college and years of on the job training for the privilege of running a kitchen. And now because of Covid-19 shutdowns, the need for common-sense solutions like social distancing, and fear of the spread of the pandemic, millions of these hard-working people are out of a job.

Covid-19 might've killed off a stunning number of businesses, but it can't kill off the entrepreneurial spirit of the people who've been left jobless. These people have to do something to keep going, and ghost kitchens are a brilliant adaptation to keep hope alive for the foodservice industry. The best part is that this ghost kitchen trend is showing signs of stability and sustainability. These ghost kitchens show the potential to stick around long after the pandemic dissipates.

What is a ghost kitchen?

Ghost kitchens, also known as cloud kitchens or virtual kitchens, are commercial kitchens that provide carryout only menu options for delivery only. These kitchens have no seating capacity, no check-out counters or waiting areas, no outdoor or indoor dining, and no public amenities. They're a restaurant minus everything but food storage and the kitchen itself. These businesses are bare-bones, keep-back-and-stay-safe style operations that are running off of ingenuity, passion, and pure, unadulterated grit. Luckily, it's working. The ghost kitchen business model is super simple and super clever, and many of these businesses are showing signs of sustainable growth that could carry their businesses well into the future.

Ghost kitchens can run multiple "restaurants" out of the same kitchen, and the "restaurants" are signed up to use multiple delivery apps to get customers ordering. The delivery apps do the difficult and expensive work of advertising for the restaurants as part of their business model. When they get delivery orders for pickup, they get income and so do restaurants.

Ghost kitchens and delivery apps have a symbiotic relationship. Foodservice workers who used to bus tables, wash dishes, and wait tables are now running orders to homes all over America while doing their best to stay contactless. Gone are the days of picky problem diners, messy eaters, and bad tippers. Many of the most frustrating aspects of working food services have been eliminated by taking in-house dining out of the foodservice equation.

How are ghost kitchens different?

Ghost kitchen companies are unlike any eatery of the past. There's nothing traditional or familiar about this concept at all. Kitchens create simple menus with items that can't be changed or substituted. This saves a huge amount of time and money for business owners while eliminating opportunities for errors in the kitchen, which is the main source of income loss for any restaurant. For example, a customer of the past would order a breaded chicken sandwich with mayo and lettuce. The customer didn't like breading on their chicken, so they wanted a "sub-out" of a grilled chicken sandwich with a lightly toasted bun, no mayo, and pickle. This customer is out of luck when ordering with the ghost kitchen. There are no options to change or substitute items in the delivery app, so they have to choose something they like and don't want to change. If this person wants a grilled chicken sandwich, they'll have to order from a sit-down restaurant or go home and cook it themselves. Gone are the days of endless options for diners. Toppings and condiments now come on the side so customers can pick and choose what they do or don't want to eat.

This type of food service is certainly less accommodating than the standard dining experiences of the past. However, it keeps kitchens running smoothly and efficiently with a bare-bones staff, tiny budget, and limited food and kitchen supplies. They have to do what they have to do to survive. This is the nature of the beast since covid-19.

The trick to sustainability

Ghost kitchen companies can sign up with a wide variety of delivery apps, which advertise the restaurants and their menus for free as part of their business model. Restaurants have quickly adapted their business model to be more sustainable by coming up with what's known as a multiple kitchen concept. By offering just a few super-simple menu items, customers don't get decision fatigue, orders are quick and easy to fill, and customers tend to order more food. When a ghost kitchen only offers six items, it's easy for them to run a second ghost kitchen with another four or five items from the same kitchen. Food delivery apps can charge a premium for picking up orders from two restaurants and delivering the food quickly.

Ghost kitchens are booming in popularity thanks to the lingering pandemic, the closure of more and more restaurants as time progresses, and the lack of dining options in major cities across America. What's making ghost kitchens sustainable is the trend of working from home, avoiding public places, and the convenience and safety that food delivery offers. Even without the pandemic, more and more Americans are working from home at least part of the time. When working from home, people have to focus on their jobs rather than cooking meals, so food delivery is an obviously good option for them. The work-at-home trend has been increasing for 15 years and doesn't show signs of slowing. Because of this and because of the lasting effects of the pandemic, ghost kitchens are showing signs of long-term sustainability. Considering the circumstances for food industry workers and patrons of restaurants in America, we should consider ourselves lucky to have ghost kitchens as an option.

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