Close Ad

The Spoon

Daily news and analysis about the food tech revolution

DoorDash Kitchens

DoorDash Opens Ghost Kitchen in Brooklyn, Serving Up Little Caesars, MilkBar & More

When DoorDash opened the first DoorDash Kitchen in California back in 2019, we speculated when they’d be expanding their ghost kitchen business beyond their home state.

As it turns out, that answer is almost three years later as the company opens its first location on the east coast. The latest location will be in Brooklyn, where the delivery company will partner up with five restaurants to offer menus for the delivery and take-out location. The restaurant partners for what DoorDash is calling a “delivery-forward food hall” are DOMODOMO, Kings Co Imperial, Pies ‘n’ Thighs, moonbowls, and Little Caesars. DoorDash Kitchens will also offer Birch Coffee and Milk Bar items, two popular NYC-founded chains.

DoorDash’s facilities partner for its NYC food hall ghost kitchen is commercial kitchen-as-a-service startup Nimbus. Nimbus, founded by Camilla Opperman and Samantha Slager, has two (soon to be three) locations in NYC, including Brooklyn, where DoorDash will set up shop. Like many newer commercial kitchen concepts, the idea behind Nimbus was to create space to power virtual brands for delivery and curbside pickup. The new location also has event space, where DoorDash and their restaurant partners can hold community meetings, dinners, and panel conversations.

“DoorDash Kitchens in Downtown Brooklyn will not only bring new restaurants to the neighborhood but offer an exciting new gathering place and create good local jobs for the community,” said Regina Myer, President of Downtown Brooklyn Partnership in the release. “We hope the neighborhood will join us in welcoming this innovative new space to Downtown Brooklyn.”

Brooklyn continues to gain stream as NYC’s center for innovative shared kitchen concepts. Last week Hungry House announced the opening of its Season 2, which included partnerships with ultra-fast grocery provider JOKR and popular Asian sauces and starters CPG brand Omsom.

DoorDash Expands Its Ghost Kitchen Operation in California

DoorDash has launched a new location of its ghost kitchen operation, the company announced today via a press release sent to The  Spoon. DoorDash Kitchens San Jose will house six different restaurant concepts from both nationally known restaurants and those from the San Francisco Bay Area. 

This is the second DoorDash Kitchens location. DoorDash launched the first almost two years ago in Redwood City, California, and has served the Peninsula area of the state ever since. The new location will offer delivery and pickup orders for customers in San Jose proper as well as Saratoga and Campbell.

Restaurants in the new location include Aria Korean Street Food, Canter’s Deli, Curry Up Now, Milk Bar, The Melt Express, and YiFang Taiwan Fruit Tea. Canter’s, in particular, is notable on this list because it illustrates how ghost kitchens can potentially improve a restaurant’s geographical reach. Canter’s is so famous in Los Angeles it’s practically an institution. It also only has one brick-and-mortar location, in Los Angeles, though in the last couple years it has expanded its reach in Southern California via a partnership with Kitchen United. Teaming up with DoorDash gives Canter’s a presence in Northern California without requiring the buildout of a full restaurant.

As part of the new facility, DoorDash has launched DoorDash Kitchens Full Service, where the delivery service assumes day-to-day operations like cooking and boxing up orders instead of requiring the restaurant to do so. That requires less work from the restaurants themselves, but it does place even more control over the brand in the hands of DoorDash. DoorDash has partnered with culinary operator A La Couch to hire cooking staff and prepare meals. The last mile, of course, will be handled exclusively by DoorDash and its own couriers. 

DoorDash said part of the motivation behind Full Service is to offer restaurants even less labor-intensive ways to run a delivery-only kitchen. And nowadays, it doesn’t seem like such a bad idea, as many restaurants continue to struggle with high margins, a dearth of labor, and uncertain times in general. 

Full Service handles the hiring, training, and day-to-day tasks in the kitchen such as procurement and inventory management. Restaurants receive a portion of the revenue in return. A specific percentage was not given.

 

Singapore’s TiffinLabs Will Launch Its Tech-Driven Virtual Restaurant Network in the U.S. in 2020

Singapore-based food tech company TiffinLabs announced this week it has acquired access to kitchen space in 1,000 locations in the U.S., Europe, and Asia to create a global network of virtual restaurant brands.

The company, which was founded in 2019, is known for the nine different virtual restaurant brands it operates out of its kitchens in Singapore. According to a press release, TiffinLabs will bring five of these brands to the U.S., starting in San Francisco, Chicago, Los Angeles, Houston, and Austin in the fourth quarter of 2020. It also has plans to bring its restaurants to London, Manchester, and Birmingham in the U.K.

TiffinLabs uses what it calls an “AI-driven kitchen operating and management system” to “identify food trends and consumer preferences.” In other words, the company identifies food trends and demands in specific areas and plans its locations and cuisine types around those factors. The company also uses this data-driven model to improve improve its ingredient supply chain and research and develop the best packaging for delivery meals. 

It is one of several restaurant chains that is currently focused on creating global virtual brands and ghost kitchens. Fat Brands recently partnered with Epic Kitchens to open 20 ghost kitchens across the U.S. And Phillipenes-based Jollibee just opened its first ghost kitchen in Chicago. Other big-name brands — Chick-fil-A and the Halal Guys among them — have partnered with the likes of Kitchen United and DoorDash to get their food into areas where they do not necessarily have standalone locations.

TiffinLabs’ founder and chairman Kishin RK said in a statement that over the next three years, we’ll see two types of winners in the ghost kitchen/virtual restaurant space: local niche players creating specialty cuisine and global delivery players that serve all parts of the globe. TiffinLabs looks to be aiming for the latter category with its forthcoming expansion.

Do You Have Enough Demand? Kitchen United CEO Discusses Pivoting To Ghost Kitchens Too Soon

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.