The 2020 Guide to Ghost Kitchens [Part 1]

It's 11 p.m. on a Saturday night and everyone, from the danced-out, ravenous party goer to the up-late, on-their-grind entrepreneur has their heart set on a big plate of chef-crafted take-out food. There's only one problem: No one wants to leave the comfort of home.

Enter hunger-saving apps like Uber Eats and Grub Hub. With a quick menu perusal and touch of a screen, freshly prepared plates are delivered across the United States and countries around the world. What is a little less known, however, is that much of these delicious orders are fulfilled in ghost kitchens.

What Are Ghost Kitchens?

Also called dark kitchens, ghost restaurants or virtual restaurants, ghost kitchens are designated areas for food preparation only. There is no fancy artwork, seating or separate bar area as ghost kitchens exist solely for the purpose of making and packaging food for delivery orders.

Alternatively, ghost kitchens may be run in leased portions of brick-and-mortar restaurant kitchens but for the sole purpose of serving delivery customers, not a live crowd. This 2020 trend is gaining popularity among customers, delivery drivers and business owners as a lean, efficient way to conduct a thriving food start-up.

Uber Eats is set to outpace the competition backed by more than 1,600 ghost kitchens across the globe. As we get deeper into 2020, ghost kitchens are primed to outperform traditional restaurants in both customer base and convenience.

Why Are Ghost Kitchens a Trend in 2020?

It's unlikely the traditional walk-in restaurant will ever go away completely. People do enjoy the ambiance, table side service and daily fare offered by a sit-down establishment; however, there is a growing preference for the perfect mix of convenience and quality — particularly among millennials.

Research shows that millennials, when compared with younger and older generations, allocate a larger portion of their budget to prepared food. That means less shopping, cooking and cleaning, which translates to more free time. That free time may be spent gaining a competitive edge in their career or spending time with loved ones.

Whatever the motivation, ghost kitchens are already answering the increased demand for food delivery options. With the most purchasing power across generations, millennials are driving change in the way the market responds to their needs. Millennials choose to spend their hard-earned dollars at businesses that have a customer-first mindset with a side of convenience. Unlike their older counterparts, millennials spend more on restaurants and, paired with their preference for on-demand service, naturally use delivery apps more as well.

Why Should Entrepreneurs Launch Ghost Kitchens?

According to the National Restaurant Association's Restaurant Performance Index, the restaurant industry showed marked gains for the second consecutive month as of December 2019. Supported by a boost in same-store restaurant sales, which itself is bolstered by participation in third-party apps, the outlook is good for restaurants.

But if starting a business today with the goal of being lean and profitable, a brick-and-mortar restaurant may not be the best option. In terms of overhead, there is everything from location-based costs to staffing concerns to consider. Again, enter ghost kitchens. New operators have the lowest barrier to entry into this highly competitive industry when ghost kitchens are paired with third-party delivery apps.

What Are the Advantages of Ghost Kitchens?

This latest wave of food service innovation offers some significant advantages for business owners. Whether you have an existing restaurant and are looking to increase sales or want to get your foot in the restaurant industry's door quickly, launching a ghost kitchen may be the answer. Top advantages include:

  • Cost savings: When researching ghost kitchens, the most obvious advantage is cost savings. Because there is no need to find a location with curbside appeal, decorate and furnish the interior, and hire a full staff to cater to walk-in customers (or even purchase kitchen equipment, in some circumstances), the overall start-up costs are minimal compared to those of traditional restaurant businesses
  • Flexibility: If a concept needs to be tested to determine its viability, ghost kitchens provide that type of flexibility without breaking the bank. When it's discovered that something isn't working as planned, entrepreneurs can re-examine, re-strategize and re-launch without a ton of roadblocks.
  • Creativity: There's no limit to what a restauranteur can do with a ghost kitchen. Multiple cuisines can be prepared in one location, a food business can have numerous sub-brands catering to different tastes and owners are free to source local and farm-fresh ingredients quickly.

When you start your ghost kitchen venture with Cuboh by your side, you can be as creative as you want without sacrificing man-hours on repetitive tasks. Change menu items, update daily specials and remove out-of-stock items across all apps within seconds from your one point of operation — your Cuboh tablet.

How to Increase Business with a Ghost Kitchen

The way of the future and certainly the trajectory on which food businesses will grow in 2020, ghost kitchens offer significant value for restauranteurs. But, how do you start? It depends where you are today.

Stay tuned for our PART 2 next week, on how to kickstart your virtual operations, whether you're a restaurant owner, or an entrepreneur willing to test a new concept.

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