Pre-pandemic, ghost kitchens looked to be the “it” trend of 2020. So you would think a global health crisis that’s forced dining room closures around the world and seemingly increased demand for delivery would have many restaurants rushing to embrace the concept. Ghost kitchens, after all, are restaurant facilities that operate solely to fulfill off-premises orders and require no front of house. If you wanna get technical about it, most restaurants are running ghost kitchens right out of their own stores right now.
But after an email exchange with Jim Collins, co-founder and CEO of ghost kitchen network Kitchen United, I’m led to believe that restaurants shouldn’t necessarily go all in on a ghost kitchen strategy right now just because delivery happens to be one of the few order channels they can work with. “I think right now the industry is honestly in a state of shock,” Collins says. “As many restaurants work hard at this moment in time to remain operational, it’s nearly impossible to consider different models.”
Instead, businesses should focus on strengthening their delivery strategies in-house, thereby laying foundations for off-premises orders that might one day warrant using large-scale ghost kitchen facilities.
Restaurants first need to understand if they even have that level of customer following and demand for off-premises orders. “Prior to the current situation we are in, we have always told operators that we are a good fit for them if they have an existing fan base, smart marketing in place and are looking to expand their market reach. The virtual kitchen model works best when there’s existing brand demand,” explains Collins.
The widespread shutdown of dining rooms may mean restaurants are pivoting to off-premises models faster, but we don’t yet have the numbers to tell us if demand for delivery is equally as widespread. A Technomic report from earlier this month found that only 13 percent of people think they will order more restaurant delivery because of coronavirus. Granted, that number was released before dining rooms closed down. Still, it suggests that until we see more numbers, we can’t really determine if restaurants will see the kinds of spikes in demand for delivery that warrant the use of a ghost kitchen facility like those of Kitchen United, DoorDash Kitchens, Kitopi, and others. Collins told me that even in a pre-pandemic world, Kitchen United won’t consider opening a facility “in a market with current delivery revenue less than $60 million.” He added that the company’s current locations are working towards significantly larger numbers than that. “You just need a lot of demand to make a delivery/take out only model work.”
Smaller chains without the deep pockets of, say, Chick-fil-A or Sweetgreen, should instead focus on making their in-house delivery strategy as efficient as possible. If you haven’t already (and I’m sure you have), take Collins’ advice and “get moving now.” He suggests opening as many channels as you can with third-party delivery providers like DoorDash, Postmates, and Uber Eats. However, instead of striking independent deals with each, go through yet-another third-party platform like ChowNow, which streamlines the setup and management of delivery orders. (Olo, Ordermark and Chowly are similar options.)
For those who’ve already used reservation and guest-management platforms like OpenTable and Resy, Collins suggests downloading the customer email lists and reaching out to those who’ve opted into marketing. “Make sure they know you’re open and available to serve them,” he says.
Another common piece of advice: optimize your menu for “people stuck at home.” Pare down your menu to only include food that travels well, and consider family-style options that can feed large groups of people. This is something Southern California-based chain Wahoo’s Fish Tacos has been utilizing over the last several days to generate more off-premises orders.
Since no one can foresee the future, especially when it comes to COVID-19, it’s impossible to say how long we’ll have to operate in this off-premises-only world. It could be that restaurants who survive this time will come out with a stronger delivery brand, so much so that when the dining rooms open up again and people are willing to sit in crowds, they’ll have the delivery demand Collins mentions to warrant looking into a ghost kitchen. Until then, getting the strongest delivery strategy possible remains the top priority for restaurants.