It was a dark and stormy night… That’s how many cliched ghost stories start, but we’re not talking about haunted kitchens (although I might have to add that to the editorial calendar). Ghost kitchens and dark kitchens have become big business, especially since the beginning of the pandemic when business went to take away only and tried to reduce running costs and overheads. And for those businesses that don’t require a retail or dine-in space, they’re the perfect solution.
In a post-pandemic, short-staffed world, where on-demand is the expectation, more restaurants are cooking up concepts to maximise their sales. Virtual brands, ghost kitchens and hybrid restaurants that change identity are among a new class of eateries emerging in Australia. The spread of food delivery apps is a critical ingredient in the rise of these businesses, which are set to take off as owners try to outsmart a tough economic climate.
What is a ghost kitchen?
There are no ghosts and it isn’t dark. Getting that disappointment out of the way, ghost kitchens (also sometimes called cloud kitchens, dark kitchens, or virtual kitchens) are only available online and don’t operate out of an existing restaurant. They often have no brick-and-mortar counterpart at all. Instead, they run out of a space rented from a third party.
Essentially, a ghost kitchen is a rented kitchen space where restaurateurs can launch a virtual restaurant brand without a brick and mortar location.
Ghost kitchens can be useful for launching a new business with less capital. Without a storefront, ghost kitchens avoid all the overhead costs associated with buying or leasing a commercial restaurant space. If you want to update your menu, you don’t need to re-print anything—just make updates online and you’re all set.
Ghost restaurants can also capitalise on increasing demand for online ordering by selling through as many third-party delivery services as they want as well as through their website.
In 2020, The ABC reported on one Perth couple who were running five separate restaurants out of the one backroom, commercial kitchen, located inside an industrial area warehouse in the city’s southern suburbs.
Mimi and Line specialise in Moroccan cuisine, but in an effort to tap into consumer demand, they also have four other separate menus serving burgers, chicken parmigianas, fries and artisan desserts.
“With a restaurant, it takes too much money,” said Mimi, who has worked as a chef for more than a decade.
“We don’t have a fixed lease here. So we can walk in, walk out anytime we want.
“We just want to try our food out first to see if it actually works.
“If it works, we might open a small place somewhere in the future, and then we already know what people like.”
What is a virtual restaurant?
Like a restaurant within a restaurant, virtual restaurants (sometimes called cloud restaurants or delivery-only restaurants) are typically new brands that run out of existing kitchens. In fact, even pre-pandemic, it was reported that one in 25 of the restaurants listed with Uber Eats in Australia was a virtual restaurant that only operates online.
With no expensive fit-out and no front-of-house staff, delivery-only restaurants (also known as virtual restaurants) are a much cheaper proposition for business owners looking for additional revenue.
In 2019, Uber Eats identified virtual restaurants as an avenue of growth in the highly competitive online food delivery market, which Deloitte valued at $1.3 billion for 2019 in its “Future of Food” report commissioned by Uber Eats.
You may be wondering what the point is, but many business owners see the creation of a spin-off as a way to have another bite of the cherry, without the investment that comes with starting an entirely new business. The key to their success is the perception the customer has of having more options.
Soul Burger, which has four locations across Sydney, is now wrapping plant-based burritos in the same kitchen where it grills its vegan burger patties. Plantas Taqueria, an online-only Mexican restaurant, launched on July 21 at Newtown, with three more locations to follow. Owner Amit Tewari said he’s responding to customer demand for plant-based options via delivery, which he says has nearly tripled in revenue compared to pre-COVID.
The trend of ghost/dark kitchens and virtual restaurants is here to stay, according to experts, with developers like Brookfield Properties throwing their weight behind the concepts.
In fact, a first-of-its-kind, four-in-one restaurant has now opened in the new $2bn Brookfield Place precinct above Sydney’s Wynard Station. Behind the innovative new spot, which sees one kitchen cook for four outlets, is Allan Lam, a restaurateur from Hong Kong who operates several cafes and bakeries across the city.
“In Australia, in some instances, operators would carve a tenancy into four shops, but you’d be forced to have different staff with four different dishwashers and four cooking lines, which is just a logistical nightmare,” Lam told The Australian.
A spokesperson for Uber Eats said ghost kitchens and virtual restaurants were growing on its platform.
“We’ve seen success stories from restaurant partners that have gone on to have online sales on Uber Eats where the virtual brand exceeds their primary restaurant,” they said.
These kitchens provide room for a brand to test a new idea before fully committing.
“Delivery-only kitchens are a unique and efficient way existing restaurants can creatively test whether a new range, cuisine type or dish has a product market fit,” Uber’s spokesperson said.
“In other instances restaurant partners have been so delighted by the online response that they have scoped building an additional physical storefront for their digital offering to capture foot-traffic as well as online orders.”
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