REEF Technology, an operator of ghost kitchens and proximity hubs, announced it has acquired 2ndKitchen, a provider of turnkey food service to hotels, offices, buildings, and other hospitality businesses. REEF and 2ndKitchen will combine their businesses under the REEF brand and will operate under REEF’s Hospitality division. The terms of the deal were not disclosed.
The concept behind 2ndKitchen is to provide food service to local businesses that don’t have their own kitchen facilities, such as pubs, sports venues and hotels. The company handles everything, including setup, ordering, menu development, payment, fulfillment, and customer support. The company, which has set up shop in Chicago, New York City, Miami, Denver, Dallas and New Orleans, powers food service to over 100 thousand rooms and common areas today.
For REEF, the deal instantly adds a large inventory of customers for their kitchen business. The company, which has grown its ghost kitchen network from 50 in February to 450 as of October, needs lots of new open mouths to feed as it expands it food production capacity at a rapid clip, and this deal helps deliver just that.
The deal also gives REEF’s restaurant brand partners a new outlet for their food. The company has been scooping up new partners like Wendy’s, TGIFriday’s, and 800 Degrees with multi-year commitments for new kitchens. The addition of 2ndKitchen gives these brands instant access to hundreds of hospitality businesses.
The deal continues what amounts to a three-month acquisition spree for REEF. In October, the company acquired Bond, an Israel-based logistics company. A month later, the company acquired iKcon, a ghost kitchen operator in the middle east. This week REEF added 2ndKitchen, marking the third acquisition in a three-month span.
The deal is interesting in that 2ndKitchen traditionally leverages local restaurants to provide food service to hospitality businesses. On the REEF side, the company provides physical kitchen infrastructure to help restaurants extend their brand into markets where they don’t operate a kitchen. Under the newly combined company, it’s conceivable that REEF kitchens could become the primary source of food offerings, displacing 2ndKitchen’s legacy restaurant partners.
On the other hand, REEF might also decide to keep 2ndKitchen’s restaurant partners around for the time being given the ghost kitchen operator’s recent troubles with their facilities. REEF utilizes mobile trailers for kitchens in multiple markets which, as reported by Restaurant Dive, have come under increasing scrutiny as of late for health code violations in Florida and other states.
2ndKitchen’s team will remain intact post-deal, including its three co-founders: CEO Nick Anastasiades, CTO Arik Gaisler and CFO Jon Elron.
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