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Kroger Partners With ClusterTruck for In-Store Ghost Kitchens

Grocery mega-retailer Kroger announced today it is launching ghost kitchens at two of its Kroger retail stores. The kitchens will be done in partnership with delivery-only restaurant service ClusterTruck and provide Kroger customers prepared meals free of delivery fees, according to a press release sent to The Spoon.

Kroger and ClusterTruck have been piloting their partnership since 2019. Through it, ClusterTruck sells its restaurant-quality meals via the Kroger Delivery Kitchen website.

To be clear, the ClusterTruck platform is not a tool for selling meals from other restaurants. Rather, ClusterTruck handles the entire meal delivery process, from conceptualizing a menu to ordering the ingredients, cooking the food, and getting meals into customers’ hands. The company also uses its own proprietary tech stack to update menus and process orders and payments. ClusterTruck, which is headquartered in Indianapolis, Ind. and has a sizable presence around the Midwest, brings this end-to-end delivery concept to the Kroger ghost kitchens. The ClusterTruck menu will be available via the Kroger Kitchen Delivery site.

According to today’s press release, the new concept repurposes roughly 1,000 square feet at each store (a typical Kroger store is about 160,000 square feet). This repurposed space will be dedicated to ClusterTruck staff, who will prepare meals for delivery and in-store pickup.

In theory, at least, that means Kroger would not have to rely on third-party delivery services like DoorDash and Postmates for any part of the delivery process for these ghost kitchens. Interestingly, this comes at a time when some of those third-party delivery services are trying to diversify their platform by offering grocery delivery.  

For Kroger’s two new in-store ghost kitchens, one will be located in Indianapolis and the other in Columbus, Ohio. These will follow an on-premises ghost kitchen already open in Fishers, Ind., and one in Dublin, Ohio, which is set to open later this year.

Today’s news is also another piece of evidence that the lines between grocery store and restaurant are overlapping. In addition to the aforementioned third-party delivery services shuttling some grocery orders to customers, Texas-based chain H-E-B recently opened a food hall that delivers restaurant meals, and grocery service Cheetah added restaurant meals to its available offerings. And though the blurring of the lines between restaurants and groceries is a direct result of the pandemic’s closing restaurants and keeping people at home, the trend is unlikely to reverse, even when restaurants can operate at full capacity once more.

One reason for the continued merging of grocery stores and restaurants is the surging popularity of ghost kitchens. Euromonitor recently predicted that the ghost kitchen market will be worth $1 trillion by 2030. That number factors in not just ghost kitchens for restaurants but also spaces for food producers and retailers. The $1 trillion figure may seem a little absurd now, but if more partnerships like the Kroger-ClusterTruck deal emerge, it may soon seem a less outlandish number and more a reality for both the restaurant and grocery industries.

Kroger Partners With Meal Delivery Service ClusterTruck to Launch Ghost Kitchen Operations

Kroger joins the growing list of non-restaurant food companies trying their hand at ghost kitchens and virtual restaurants. The grocery retailer announced today it has partnered with Indianapolis-based food delivery service ClusterTruck to launch multiple ghost kitchens that serve up delivery-only meals.

Through the partnership, ClusterTruck will sell its restaurant-quality meals via the Kroger Delivery Kitchen website. Customers can browse the service’s extensive menu, which covers considerably more food types and dietary preferences than many regular restaurants, place an order, and pay online, just as they would with any other food delivery service. From the looks of it, ClusterTruck has essentially taken its existing menu and placed it within the Kroger Delivery Kitchen shop, making it accessible to a wider number of potential customers.

That’s only one aspect of the partnership, though. As we wrote earlier this year, ClusterTruck, which has been operating virtual restaurants since 2015, controls the entire delivery stack of its business, from creating recipes and managing menus to building the software that powers the whole operation. It even employs its own fleet of drivers. The service will bring all of these elements to the new ghost kitchen operation with Kroger, who, as mentioned above, is basically just providing the virtual storefront.

The partnership will launch with four kitchens, one in each of the following cities: Carmel, Indiana; Indianapolis, Indiana; Columbus, Ohio; and Denver, Colorado.

Customers in delivery zones for Carmel, Indianapolis, and Columbus can now go to KrogerDeliveryKitchen.com to browse menus and place orders online. In Denver, where the operation is being handled by Kroger subsidiary King Scoopers, customers access the service through KingScoopersDelivery.com.

Whether Kroger and ClusterTruck will expand this operation to other U.S. cities remains to be seen. We have reached out to ClusterTruck and will update this post with more details as they arrive.

While the partnership is a high-profile one for a regional company like ClusterTruck, which is available mostly in the Midwest at this point, it’s also a smart move for Kroger. The concept of operating virtual restaurants out of ghost kitchens appeals nowadays to not just restaurants but also lifestyle brands, diet concepts, and celebrity chefs. Grocery stores were bound to follow at some point.

In fact, Kroger isn’t even the first supermarket chain to dabble in this area of the food industry. In China, Starbucks is operating ghost kitchens out of Alibaba’s Heme supermarkets as a way to fulfill more delivery orders. Expect more grocery store chains to follow with similar moves soon.

Virtual Kitchen Network Keatz Raises €12M for Its Food-First Delivery Concept

Berlin, Germany-based Keatz has raised €12 million (~$13.6 million USD) in new funding for its virtual restaurant operation, TechCrunch reports. The round was led by Project A Ventures, Atlantic Labs, UStart, K Fund, and JME Ventures, with participation from RTP Global. This recent round brings Keatz’ total funding to €19.4 million (~$22 million USD).

Keatz operates a network of 10 virtual kitchens throughout Europe — that is, kitchens created specifically for delivery orders, which customers place online or via an app. Keatz’ menu items are currently available through Deliveroo, Foodora, Lieferheld, and Pizza.de.

Rather than partner with restaurants, as many virtual kitchens do, Keatz has taken a less-traveled route and keeps its own portfolio of restaurants created by an in-house culinary team. Also different from most virtual kitchens out there is that Keatz pre-cooks all food in a central kitchen, then ships frozen meals to smaller assembly kitchens. As my colleague Chris Albrecht pointed out recently, “this hub-and-spoke approach to meal creation also allows Keatz to easily swap new brand concepts in and out at each location.” So if Vietnamese cuisine isn’t selling in one area, the concept can be easily swapped out for fish ‘n’ chips, or whatever happens to be in high demand in that vicinity.

Right now, Keatz’ restaurants include vegan food, Hawaiian Poke, Thai curry, a soup brand, Mexican food, and salads and wraps. Keatz chooses its menu items based on which foods are best suited to delivery — that is, food that can withstand an extra 15 minutes getting jostled around during a car or bike trip. “We believe the last unsolved part in food delivery is the preparation of food itself,” Keatz co-founder Paul Gebhardt told TechCrunch.

He would hardly be alone in that opinion. In fact, a growing number of restaurants, restaurant tech companies, and others are starting to focus more on the food itself as the best way to improve the delivery experience for customers. Taster, headquartered in Paris, France, runs kitchens “with military-like discipline” and chooses foods suited to the delivery process.

In the U.S., all manner of companies offer delivery-only concepts with this “food first” focus. ClusterTruck operates a virtual kitchen with an enormous menu of delivery-friendly food items it creates, executes, and delivers itself. And earlier this year, Dig Inn launched its Room Service concept, using virtual kitchens that plan their menus around food that actually gets better in transit. “At the end of the day, the guest isn’t going to come back to you because your technology is amazing, they’ll come back to you because the food is amazing,” Dig Inn Director of Offsite Scott Landers told me recently.

But whether it’s avoiding soggy food or just providing more efficient delivery operations for existing restaurants, companies up and down the restaurant industry are now participating in the virtual kitchen craze. Uber turned heads last week when news broke that it was piloting its own kitchens in Paris. Kitchen United is expanding at a rapid pace, renting kitchen space to restaurants who need or want more space to fulfill delivery orders. And Deliveroo has operated its own kitchens in Europe for some time now.

Keatz launched in 2016. The company says it plans to use the new funding for further expansion of both its food portfolio and the number of kitchens it operates.

When Is a Food Truck Not a Food Truck—But Something Better?

 ClusterTruck offers a visionary approach to food delivery, despite its somewhat misleading name. Located at the intersection of virtual restaurants, just-in-time ordering, home delivery and fleet management, the Indianapolis-based company recently has added Kansas City to its growing roster of markets served.

With ClusterTruck, it’s all about synchronization. Food, from an extensive menu, is prepared in a commissary-like kitchen in each of its now six locations. Orders, via a dedicated app or via the company website, are only offered within zones in each city where meals can be delivered to a customer’s curb within a reasonable time frame to ensure freshness. The twist, compared to other food delivery options, is that an individual order is not started until a driver can be located. For those who live outside a designated zone, a customer can place their food request and meet a driver within the delivery area.

“Having come from a deep technology background, we approached the growing problem of unsatisfied food delivery customers from a software perspective,” ClusterTruck Inc. CEO Chris Baggott, who co-founded digital marketing software company ExactTarget, said in a release. “We believe hungry people should never have to choose between the convenience of fast delivery, the food quality they’d get at a sit-down restaurant and the personality of street food, so we created a service that offers all of the above.”

Essential to ClusterTruck’s success is the specially designed kitchens where the food is prepared. Large digital displays cue chefs when to begin meal preparation, based on not only finding a driver but calculating the time it will take the vehicle to reach the meal prep location. According to company information, Baggott hand-coded the software to ensure accuracy for this crucial step.

Baggott also has his hands in the process far beyond prep and delivery. The ClusterTruck CEO owns a farm where animals used for much of the company’s menu are sourced, in a pasture-raised and antibiotic-free environment. With increasing demand, Baggott is contracting with other farms who are willing to raise their cows and pigs to ClusterTruck’s specifications.

ClusterTruck’s delivery fleet is made up of drivers who also may work for other services such as Uber, Lyft or Postmates. One of the company’s big selling points to recruit new drivers is that ClusterTruck provides only curbside delivery, all of which eliminates the hassle of parking, apartment building codes or elevators. Also, the company says it pays its drivers daily, rather than weekly or monthly, as is common with other food delivery services.

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