Why Did Ghost Kitchens Grow Rapidly in 2020?

In theory, ghost kitchens sound like they would require years of setup. But in 2020, restaurant owners launched ghost kitchens throughout the world in a matter of months. Ghost kitchens soared in popularity during the pandemic, turning the virtual kitchen trend into a multi-billion dollar industry. During this time, advancements in ghost kitchen innovation like REEF have helped restaurant owners run successful businesses. The success of virtual kitchens made it clear that they're not a fleeting trend--they're major competitors in the culinary market.

2020 was a particularly successful year for virtual kitchens. With restaurants shutting down across the United States, ghost kitchens helped restaurants stay afloat and revolutionize the industry in the process. Here's a look at why ghost kitchen startups skyrocketed in 2020.

How Did the Pandemic Affect the Restaurant Industry?

Without ghost kitchens, the restaurant industry could have collapsed entirely in 2020. Statewide shutdowns forced restaurants to stop operating, limit their hours or switch to a delivery-only model. Even when restaurants started reopening, customers were hesitant to eat in public again. Social distancing and mask requirements made dining an uncomfortable experience and limited the number of diners that restaurants could serve. Ultimately, thousands of restaurants shut down permanently because the owners couldn't afford the operating costs.

Despite this, one service skyrocketed in popularity: pickups and home delivery. Apps like DoorDash and GrubHub saw an uptick in orders from customers who wanted to order food without leaving their houses. Instead of visiting restaurants and potentially exposing themselves to COVID-19, diners waited for their food to arrive with minimal contact with the driver. This increase in sales showed restaurants that they can still make money if they focus on home delivery.

In the wake of these changes, business owners realized that they can make money if they focused on ghost kitchens. Some restaurant owners opened virtual kitchens that operated out of their existing restaurants. Others opened completely new virtual kitchens that operated exclusively through delivery apps. These factors contributed to the skyrocketing popularity of ghost kitchen startups in 2020.

Why Do Business Owners Prefer Ghost Kitchens?

With fewer expenses and faster launch periods, ghost kitchens were more profitable than regular restaurants during the pandemic. Restaurant owners didn't have to worry about paying for rent, electricity, water, gas and other utilities for their dine-in locations. They also didn't have to hire waiters and cashiers that interact directly with customers. Instead, all they needed was fresh ingredients, a place to cook and people to prepare the food.

This made it much easier for new business owners to enter the industry. Some operators had thought about opening a restaurant but didn't have enough startup funds. The virtual kitchen trend showed them that they could launch their own businesses at a fraction of the cost. If they prepared the food for themselves, they could save even more money, although most virtual kitchens still had to hire a few employees.

Virtual kitchens tended to be simpler than traditional restaurants. Unlike major chains, ghost kitchens operate out of the owners' homes or workspaces. This means that they focus on simple meals with wholesome ingredients, not elaborate dinners made from reheated food. Ghost kitchens often have bigger portions, cheaper ingredients and less waste because the food is made to order. The food also needs to be delivery-friendly, making it even more essential to cram the most flavor into a few ingredients.

Ultimately, anyone can open a ghost kitchen if they have good recipes, cooking skills and enough business know-how. The reduced operating costs opened the door for thousands of kitchens that might not have existed otherwise.

Has the Trend Continued in 2021?

In 2021, virtual kitchens are as popular as ever. Some business owners integrated their ghost kitchens into their dine-in restaurants when the state regulations started to wane. Others kept their kitchens open and enjoyed continued success. Hundreds of people have opened new virtual kitchens in 2021--and with advancements in apps, networking and restaurant tech, ghost kitchens have become a major force in the restaurant industry. Restaurant SaaS applications like Cuboh have made it easier than ever for business owners to streamline the process.

What is Cuboh?

Cuboh represents the latest in ghost restaurant innovation. With a single application, businesses can view every order, check their point of sale system and view pertinent data to ensure that they're running on schedule. The data and analytics help business owners track their progress and grow their restaurant even further. Better yet, owners can access the entire application from one device--no need to switch between different apps.

To learn more, sign up for a free Cuboh demo today. You'll get a 30-minute informational call where we'll talk to you about Cuboh and figure out a plan to accelerate your business's growth. Get in touch with us today to get started.

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