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Daily news and analysis about the food tech revolution

Kitchen United

Kitchen United Is Hosting an Online Event to Help Restaurants Make Sense of the Stimulus Package

In an effort to help restaurant operators decipher what the $2 trillion stimulus package means for them, Kitchen United is hosting a free webinar tomorrow, according to a company press release emailed to The Spoon. The event, slated for Tuesday, March 31, will be an “instructional webinar for restaurant operators of any size” to better understand how they can take advantage of the stimulus package. 

President Trump signed The Coronavirus Aid, Relief and Economic Security Act into law on Friday. Among other things, it will provide $803 billion in loans to businesses, $349 billion of which is dedicated to small businesses. 

As with most legislation, the stimulus package is massive and chock-a-block full of legal jargon, and that’s where Kitchen United is stepping in. The webinar will help restaurants understand if they qualify for any relief, how much they can expect to receive, and how to apply for it. KU’s CFO Michael Montagano will host the online event, sharing tips on the above topics and more. Jim Collins, who in addition to being CEO of Kitchen United is also a restaurant owner, will also share his experience and thoughts around the process of applying for relief. 

It’s an understatement to say restaurants are struggling in the wake of forced dining room closures happening around the country. While businesses may remain open for delivery and takeout orders, the reality is that switching to those off-premises formats isn’t an overnight process — nor an affordable one, in some cases. Some restaurants are already saying they’ll have to close locations permanently, while others have furloughed employees. And with the social distancing guidelines now extended through the end of April, the struggle for restaurants is far from over. 

Collins recently told me that lack of information and misinformation are two big problems restaurants face amid this crisis, which is presumably what next week’s webinar discusses. “We need to start to address that, but then there are series of concrete things we’re working on to see if we can’t help folks start to deal with all of this successfully,” he said. 

Collins added that Kitchen United is working on a number of forthcoming initiatives designed to help restaurants during this time. 

Those interested in joining next week’s webinar can go here for details. A replay will also be made available via the Kitchen United website.

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.

‘Pare Down Your Menu’ and Other Advice for Restaurants Forced Into Delivery

States continue to mandate that restaurants shut down their dining rooms, and across the U.S. major chains are voluntarily switching to off-premises-only models. Those measures are necessary right now as we try to slow the spread of COVID-19. But where does that leave smaller businesses with less robust delivery programs or no off-premises strategies at all?

Plenty of restaurant tech solutions exist that can speed up and/or simplify a delivery strategy. However, I talked with several individuals this week who own and/or manage such solutions, and they made it clear that right now, there’s a whole lot restaurants can do to improve their delivery operations without forking over thousands of dollars on technology.

“Before you even get to the technology, what you really have to figure out is if you’re equipped to do off premises,” says Sterling Douglass, cofounder and CEO of Chowly. “What kind of food? What’s the menu going to look like? How are you going to staff it? Can you afford to staff it?”

Douglass, along with Alex Canter and Charlie Jeffers of Ordermark, and Jim Collins of Kitchen United, took time this week to chat with me and offer some simple steps restaurants can take today to kickstart their off-premises strategy right now.

1. Pare down your menu.

Pivoting to delivery doesn’t mean necessarily mean throwing your existing menu online and dishing up the same meals in to-go boxes. There’s a reason pizza was a delivery item long before any other kind of food went mobile: it travels well and it’s relatively simple to make. 

Thinking along those lines, restaurants should assess their existing menus and decide which items best translate to a to-go scenario. “What they need to do is trim down their menu, look at the items that are easy to procure and produce, so they can make a menu and put it up online and make easy items they can get out that are going to travel well,” says Jeffers. Fried chicken, for example, tends to hold up in transit. Scrambled eggs: not so much.

Jim Collins, who in addition to being CEO of Kitchen United also runs his own restaurant, suggests restaurants create things like family-style options and, if possible, include beer and wine options. “These things will help you stay relevant to the consumer as we move forward.”  

And if there’s leftover inventory from items you can’t make right now? Canter suggests getting creative about how you can repurpose and sell it:  “[Restaurants are] selling frozen items on Postmates. You can sell frozen soup or frozen take-home pizzas and cookie dough.”

2. Consider using multiple delivery platforms.

Unless you have the funds to power your own delivery operation (marketing, drivers, technical logistics), the reality for most restaurants right now is that they need to partner with third-party platforms like DoorDash and Postmates. If possible, they should partner with all of them.

“More and more, restaurants are realizing that to sustain a business solely based on delivery, they need to increase their volume and that typically means being on as many platforms as possible. Instead of picking one or two it’s really critical for restaurants to be thinking about an omni-channel strategy,” Canter says.

An eMarketer forecast said much the same thing a while back, noting that “more options for customers” would be a key growth driver for delivery in the future.

Companies like Ordermark and Chowly, and others legitimately do come in handy here: they will set a restaurant up on multiple different delivery platforms as part of a single package deal. Otherwise, the restaurant owner or operator would have to go through the same lengthy process for each service. “Opt in to all of the marketplaces but work with someone like ChowNow to get direct ordering working as well,” suggests Collins.

3. Adjust your staffing.

This one is honestly hard to write about, especially since earlier this week, the National Restaurant Association estimated the loss of 5–7 million restaurant industry jobs. “At my family’s restaurant, we’ve had to tell the bulk of our staff to not come in,” says Canter. “That means for us, we’re a sit-down restaurant [with] waiters, bus boys that are no longer needed to support a delivery-only situation.”

He adds that running a delivery-only business requires “a very minimal skeleton crew,” which sadly means owners and operators are going to have to make some hard decisions around staffing in the near future. “This is unfortunately the situation at hand. It really comes down to repurposing your best employees to shift them to focus on the takeout and delivery side of the business.”

4. Accept that delivery is “a must” right now.

We can’t have a discussion about restaurant food delivery without at least acknowledging how controversial and frustrating third-party platforms are for restaurants. I’ll spare you yet-another rant, though, because right now, the unfortunate reality is that the majority of restaurants need to partner with these platforms right now.

“At this point, when restaurants are no longer able to provide a dine-in experience, the only way to stay open is by having a delivery program,” says Jeffers. “Most restaurants don’t have the marketing spend or the following to survive on their own.”

“If you’re a restaurant and you’re not doing delivery, you need to immediately implement a program. Just being on DoorDash and Postmates, you now exist to the people who use these apps. It’s not just worth it, it’s a must,” Canter adds.

Right now, the restaurant industry is banding together to help restaurants accept and implement this new reality of off-premises business, whether its by offering tech solutions, support for workers, and help hotlines to answer questions.

“You’re not alone,” Canter says to businesses. “Every restaurant is trying to figure out the best way to get through this.”

 

Applebee’s Is Planning Ghost Kitchens for Delivery and Takeout Orders

Applebee’s just became the latest restaurant chain to hop the ghost kitchen bandwagon. In an interview with Nation’s Restaurant News, Steve Joyce, CEO of Applebee’s parent Dine Brands, said the company was “experimenting” with the concept.

To be honest, the development isn’t terribly surprising. At the end of 2019, we predicted that ghost kitchens would become “the norm” for larger restaurant chains, since they not only to help them fulfill more delivery orders but also to let them reach areas of the country where they might not have a brick-and-mortar presence. Chick-fil-A is a good example. The company has expanded its presence in Northern California — where it has few brick-and-mortar stores — by renting space in DoorDash’s Redwood City ghost kitchen facility. Doing so lets the chain reach a potentially wider audience without having to invest the time and money into building out full Chick-fil-A locations.

Dine Brands’ Joyce suggested his company is looking into a similar strategy for Applebee’s, telling NRN that he’s hoping to use ghost kitchens to increase Applebee’s presence in “underserved cities,” particularly those in the Midwest. He also said the company was looking into different kinds of ghost kitchens: operating its own as well as partnering with third-party kitchen providers. 

My crystal ball tells me Applebee’s probably will team up with DoorDash to realize at least some of its ghost kitchen ambitions. The chain already has a national delivery partnership with the service. Renting out space in DoorDash’s ghost kitchen facility could greatly expand Applebee’s presence in the California Peninsula area, where currently it only has a few locations.

As for the rest of the country, Applebee’s would have to partner with another provider. Kitchen United has open locations in Chicago, Southern California, and Phoenix, and has more facilities in the works. Zuul Kitchens is currently focused on the NYC area, as is Kitopi. 

Whether restaurants should be betting their entire off-premises strategies on VC-backed ghost kitchen facilities is a debate for another day (stay tuned). For its part, Applebee’s has said it is looking into a combination of ghost kitchen types, which means it isn’t going to rely solely on third-party providers. Glancing a moment into the longer-term future, that’s probably the smartest bet right now for big restaurant chains.

Kitopi Raises $60M to Expand Its Ghost Kitchen Network

Ghost Kitchen startup Kitopi has raised $60 million in new funding, according to an article this week from The Financial Times. The round was led by Lumia Capital and Knollwood. Kitopi declined to provide numbers around its current valuation.

The Dubai-based company operates more than 30 ghost kitchens in cities around the world, including its hometown, Abu Dhabi, New York, and London, among others. 

Like other ghost kitchen facilities, Kitopi offers infrastructure for restaurants wanting to fulfill more off-premises orders and also expand into new geographic areas where they might not have a brick-and-mortar location. Kitopi specifically caters to those companies preparing meals for third-party delivery apps like DoorDash and Deliveroo. The company rents both space and staff to restaurants, who provide Kitopi with recipes and menus with which to fulfill the orders. Kitopi works directly with the food delivery services to fulfill the last mile and actually transport the food to customers. 

The company has also developed an in-house tech stack it calls “a smart kitchen operating system” that “optimizes all aspects of kitchen operations in real time.”

According to FT, Kitopi will use the new funding to open a second headquarters in NYC, where thanks to soaring rents and shrinking margins, restaurants are scrambling to stay afloat and meet the demand for off-premises. Kitopi already operates some ghost kitchens in that city; adding more will give it more muscle when it comes to competing with the likes of Zuul, which recently opened the first of many planned NYC kitchens, and Kitchen United, which is expanding east and has a location planned for Brooklyn. 

Kitopi plans to open 50 new kitchens in the Big Apple this year in addition to 100 additional locations worldwide.

3 Predictions for the Ghost Kitchen in 2020

In 2019, the idea of a restaurant kitchen with no dining room that would exist solely for the purpose of fulfilling off-premises orders was an intriguing but little-known concept. Fast forward 12 months, and ghost kitchens are now a major talking point in the discussion around how to meet customer demand for delivery and takeout orders. And it’s not just restaurants getting involved. Third-party delivery services like DoorDash have opened their own ghost kitchen facilities, companies like Kitchen United, who provide kitchen infrastructure to other brands, are expanding across the globe, and even non-restaurant food brands are capitalizing on the craze.

It’s still early days for the ghost kitchen concept, and as I noted with The Spoon’s most recent market map, this is a part of the restaurant industry that will change rapidly over the next year as it becomes more commonplace among both restaurants and consumers.

Here are a few things we expect to see happen in 2020.

Ghost kitchens will become the norm for large restaurant chains. 
Last year around this time, I wrote that “where the [ghost kitchen] concept could really shine in 2019 is by taking on delivery orders for existing businesses, so the brick-and-mortar locations of those restaurants don’t have to shoulder the entire burden.”

Without a shadow of a doubt, that began to happen in 2019. In 2020, it will become the norm. Many early adopters of the ghost kitchen concept in 2019 were national or international chain restaurants with the kind of reach and influence that will compel other establishments to take similar steps. Chick-fil-A already rents space from DoorDash’s ghost kitchen facility. Starbucks has teamed up with Alibaba’s Heme supermarkets in China to run ghost kitchens out of the latter’s stores. The coffee giant is also building out its own express stores that will function largely as ghost kitchens for delivery orders. Fat Brands is using its own kitchens to double as ghost kitchens for sister brands.

All of which is to say, many brands will create many iterations of the ghost kitchen concept in 2020. As we move though the next 12 months, which types of ghost kitchens (commissary, in-house, etc.) make the most sense for which brands will become clearer. 

Restaurant brands will compete with their kitchen providers.
Both large chains and virtual restaurant concepts will quite possibly find a new competitor in 2020: the folks renting out the kitchen space they use.

Much like grocery stores display their own brand of pasta on the shelves along side CPG brands (or, for a more web-friendly parallel, Amazon has its own Amazon Basics brand), ghost kitchen providers will start to use their facilities to house their own virtual restaurant concepts that compete with those of their tenants. 

This is already happening. Travis Kalanick’s CloudKitchens startup, which operates a network of ghost kitchen facilities, provides space for brands like Sweetgreen to fulfill off-premises orders. It also houses its own virtual brands like Excuse My French Toast and B*tch Don’t Grill My Cheese. 

Not all kitchen providers will take this route. For example, Kitchen United said recently it did not want to be a restaurant itself.

But for many kitchen providers, offering their own virtual restaurants allows them to own yet-another piece of the restaurant stack and therefore more revenue and the all-important customer data. And as more and more non-restaurant food brands, from diets to celebrity chefs, try out virtual concepts, launching a virtual restaurant will (in theory, at least) get simpler for these kitchen providers to do without incurring much additional overhead. No, B*tch Don’t Grill My Cheese won’t stand a chance against a big brand like Chick-fil-A if a customer is really craving those waffle fries, but in the future, the two entities won’t be working out of the same ghost kitchen facility anyway.

Which leads us to our next point.

Third-party delivery services will open more kitchens. Big brands will follow.
Remember above when I said we’ll see an explosion of big-name restaurant brands adopting the ghost kitchen model? At some point in the future, most of them will be doing it out of kitchens run by third-party delivery services like DoorDash and Uber Eats. That’s not because providers like Kitchen United don’t offer delivery options (they do), but because the delivery companies themselves are approaching the restaurant chains.

DoorDash is a case in point. When the third-party delivery service opened the doors on its own ghost kitchen facility in Redwood City, CA this year, it had four existing restaurant chains onboard — all of whom it approached because the company had user data that said people were looking for that type of food in the California Peninsula area. Chick-fil-A soon signed a lease for exactly the same reason.

This is almost a no-brainer. Restaurants already working with delivery companies use these services for things like marketing, technical fulfillment, and last-mile logistics. Adding kitchen space to the stack seems almost a foregone conclusion.

The other thing ghost kitchens are likely to encounter at some point in 2020 is a reality check. At the moment, optimism is flowing into the sector alongside the millions in capital companies are raising. Soon enough, though, the questions will start pouring in. Who gets to own the customer data? Can ghost kitchens become sustainable or will they just pile more trash into the ocean via takeout boxes? Is the model actually profitable, and for whom? Expect these and many other questions to surface in the next year as the ghost kitchen goes mainstream. 

Spoon Market Map: Ghost Kitchens in 2019

Just half a decade ago, the phrase “ghost kitchen” referred to restaurants that looked legit on Grubhub and Seamless but were actually digital fronts for unregulated kitchens. In other words, chicken tenders from what appeared to be a local restaurant might actually have been cooked in someone’s apartment.

Then the delivery boom went off, thanks largely to the growth of third-party services like Grubhub and DoorDash, and by the many digital channels through which customers could suddenly get food. Order tickets proliferated for restaurants, but so too did the stress around how to fulfill those orders without over-burdening the in-house kitchen staff.

The answer to the problem? Take the restaurant out of the kitchen.

In the last few years, restaurants have been moving many of their operations around delivery and to-go orders to dedicated kitchen spaces outside the main restaurant location. The name “ghost kitchen” has stuck around, but now it’s a health-department-friendly term for these spaces that act as hubs for off-premises orders.

But actually, there are many names nowadays for the concept: ghost kitchen, virtual kitchen, cloud kitchen, the (slightly nauseating) description “kitchen as a service.” All those phrases amount the same thing: a kitchen facility that exists solely for the purpose of helping restaurants cook and fulfill to-go orders and get them into the hands of delivery couriers. There is no dining room or front-of-house staff in a ghost kitchen, the tech-stack is more streamlined than that of a full-service restaurant, and, increasingly, the location is completely separate from a restaurant’s dine-in location(s). Now, too, there are also kitchens on (literal) wheels, which add yet-another piece of mobility to the business model. 

To help you navigate the evolving world of ghost kitchens, we’ve created a market map for your reference. This market map is intended to be a snapshot of the current ghost kitchen landscape in 2019. It’s not comprehensive, and we expect both it and the overall landscape to change drastically over the next 12 months. That means you can expect to see this map updated regularly. As always, we welcome suggestions for additional companies and players in this space.

Have suggestions? Drop us an email.

1. Kitchen Infrastructure Providers

The largest category in ghost kitchens right now, Kitchen Infrastructure Providers can be likened to cloud computing providers: they rent companies the space and tools needed to run a business, either as a flat-fee model for on a pay-as-you-go basis. 

Kitchen United, for example, charges a monthly membership fee that includes rent, equipment, storage, and services like dishwashing. Reef, which originally made a name for itself reinventing the concept of the parking garage, offers these things as well as direct partnerships with major third-party delivery companies like DoorDash and Postmates.   

Normally these facilities are large, warehouse-like buildings that hold multiple “restaurants” under a single roof. For large restaurant operators with multiple chains looking to fulfill extra demand brought on by delivery or test out new concepts without incurring too much risk, these are ideal.

Multi-unit chains can also use these spaces to reach customers in areas where they might not have a brick-and-mortar store. Chick-fil-A is widening its reach in the SF Bay Area by working out of DoorDash’s newly opened facility.

2. Restaurant-operated Kitchens

For some restaurants, running a ghost kitchen operation themselves makes more sense than teaming up with a third-party kitchen provider. This is often the case with smaller, independent restaurants, whose ghost kitchen might consist of nothing more than an area of the restaurant’s existing location(s) dedicated to fulfilling off-premises orders. Or it might apply to multi-unit chains who simply want to expand to new areas and don’t have the capital or inclination to deal with the burden of a full-service restaurant. Colombian chain Muy is one such company, having started as a dine-in restaurant before expanding its ghost kitchens to serve more areas of Latin America.

The most notable of all the companies in this category right now is Starbucks. In addition to building out “to-go” stores that exist solely for the purpose of fulfilling off-premises orders, the company has also partnered with Alibaba to turn parts of the latter’s Hema supermarkets into ghost kitchens in China.

The boundaries around this category are especially fluid. In other words, just because you operate your own ghost kitchen in one part of the country doesn’t mean you can’t team up with a third-party provider in another, as The Halal Guys and Chick-fil-A have done.

3. Virtual Restaurant Providers

This is where the lines really start to blur between restaurant, kitchen provider, and delivery company. Anyone can make a virtual restaurant, and as the category in our map shows, more than just restaurants are trying their hand at food concepts that can only be ordered through digital channels and are prepared in a ghost kitchen. Whole30, for example, is a diet concept better known for its cookbooks than its dealings with the restaurant industry. The folks behind that brand teamed up with Grubhub and restaurant company Lettuce Entertain You to create a virtual restaurant offering meals with Whole30-approved foods. 

On the other hand, a company like Keatz runs a network of virtual restaurants it houses beneath the roof of its own ghost kitchens. Taster, based out of France, creates native restaurant brands for food delivery companies like Uber Eats and Deliveroo. Food is cooked in Taster-run kitchens.

4. Mobile Kitchens

In slightly more its own category, companies like Ono Food Co. and Zume are creating robotic, self-contained kitchens on wheels that offer restaurant experiences that can be tailored to specific neighborhoods in a city and also plug into third-party delivery services.

Restaurants can also partner with these kitchens on wheels to expand their reach into new markets, as &Pizza has done by teaming up with Zume.

What’s Next for Ghost Kitchens

Ghost kitchens will become the norm for multi-unit chains. With off-premises orders expected to drive the majority of restaurant sales growth over the next decade, multi-unit brands (think Panera, Chipotle, etc.) will find ghost kitchens a cost-effective way to meet this demand without overburdening existing restaurants. The majority of them will rent space from kitchen infrastructure providers, as Chick-fil-A is currently doing with DoorDash. 

There will be an explosion of delivery-only brands. Since ghost kitchens provide a cheaper, faster way for food entrepreneurs and small restaurants alike to test-drive new concepts, we will see an influx of delivery- and pickup-only brands come out of these kitchens over the next year. Many will be born inside the walls of facilities like Kitchen United or CloudKitchens. Meanwhile, the number of virtual restaurant networks like that of Keatz will increase. 

Artificial Intelligence will be designed into the kitchen. AI is a really broad term that’s often misused. That fact aside, its presence in the restaurant industry is here to stay, and in ghost kitchens, it will prove itself valuable for everything from tracking ingredients to helping staff curb food waste. On the consumer end, we expect to see the technology more deeply integrated into the apps and websites from which customers order, improving recommendations and upselling opportunities.  

More non-restaurant food brands will launch virtual restaurants. In keeping with a trend recently made popular by Whole30 and Bon Apétit, food brands, diets, celebrity chefs, and other non-restaurant businesses will team up with third parties to launch delivery and pickup concepts. Grubhub and Uber Eats are two such third parties already doing this. Expect many more such partnerships — soon.

Bonus: The tech stack will get pared down. No front of house means no POS, right? Quite possibly. With less (or no) customer-facing technology like digital menu boards, self-order kiosks, and tabletop ordering, much of the restaurant tech on the market today becomes irrelevant in a ghost kitchen setting. As the folks at Reforming Retail noted recently, “under this scenario the POS is just an ordering node in the cloud that outputs your menu to a consumer and sends orders to your kitchen.”

That doesn’t mean restaurant tech is going by the wayside. Some ghost kitchens, like those of Muy, have a walkup option where customers order at kiosks onsite, and there will doubtless be new solutions created that are specifically for the ghost kitchen. But the tools of tomorrow’s ghost kitchen won’t look a thing like today’s bloated restaurant-management tech stack. For everyone involved, that’s a bonus.

Kitchen United Raises $40M for Its Ghost Kitchen Network, Expands East

Kitchen United, which operates a growing network of shared kitchen spaces for restaurants around the U.S., announced today it has closed a Series B round for $40 million. The round was co-led by RXR Realty and GV (formerly Google Ventures), with participation by funds managed by Fidelity Investments Canada ULC, DivcoWest and G Squared. Existing investors and founders John Miller, Harry Tsao, and others participated, too. This brings KU’s total funding raised to $50 million.

The popularity of ghost kitchens — also known as “virtual kitchens,” “kitchen as a service,” and a slew of other monikers — has skyrocketed in recent months as restaurants large and small try to meet the demands of this delivery-crazed era we live in. Kitchen United, which launched in 2017 in Pasadena, CA, has been at the forefront of this movement with its growing network of facilities that can house between 10 and 20 ghost kitchens per location and are home to brands like The Halal Guys, Wetzel’s Pretzels, Canter’s Deli, and others.

In October 2028, Kitchen United got a $10 million investment from Google’s parent company and CaliBurger CEO John Miller.

With the new investment, KU will be moving into more locations — the NYC market in particular. According to a press release sent to The Spoon, part of the deal with RXR Realty involves opening ghost kitchen facilities on RXR properties in the city as well as the tristate area. Such a partnership is wise on KU’s part as the company looks to expand into cities known for astronomical rents when it comes to large spaces. KU will expand to several RXR properties, starting with Brooklyn, Manhattan, and Stamford, CT.

The company currently operates a facility in Chicago as well as its original one in Pasadena. As the press release noted, locations for Scottsdale, AZ and Austin, TX will open soon. And the company is also looking to expand to other major metropolises like San Francisco, Boston, and Los Angeles — also cities where a deal with a real estate company might not be a bad idea.

In New York, at least, Kitchen United will compete with the newly opened Zuul Kitchens, who just opened their first location in Manhattan’s SoHo neighborhood and is focusing on that market for further expansion.

Zuul Kitchens Is Launching a Huge Ghost Kitchen Facility Next Week in NYC

Come next week there will be a new kitchen in town, but it won’t have any dining room attached. Zuul Kitchens, a ghost kitchen facility that will exist solely for the purpose of helping restaurants fulfill delivery orders, will launch operations in New York City starting in September, according an article from Eater NY.

Zuul will open its first facility in Manhattan’s SoHo neighborhood. According to the Eater article, the 5,000-square-foot space will house nine kitchens and house Sweetgreen, Junzi, and other chains looking to grow the number of delivery orders they can fulfill. Restaurants will pay a monthly membership fee (undisclosed at the moment) that covers kitchen space as well as equipment.

Ghost kitchens are basically restaurant kitchens without a dining room or front-of-house operation. Back in December of 2018, The Spoon predicted that the rise of ghost kitchens would be a major trend unfolding over 2019. So far, that’s been the case. Kitchen United, a major player when it comes to offering restaurants shared kitchen facilities for delivery-only orders, has been rapidly expanding across the U.S., opening or planning to open locations in Atlanta, GA, Austin, TX, Columbus, OH, as well as Washington, D.C. and NYC. Former Uber CEO Travis Kalanick runs a network of delivery-focused facilities called CloudKitchens. Outside the U.S., Starbucks opened ghost kitchens in China to fulfill delivery orders and Uber is rumored to be dabbling with them in Europe.

Ghost Kitchens serve a couple of different purposes. They provide a place for existing restaurants to fulfill more delivery orders and also serve as facilities for food entrepreneurs and restaurants to test out new concepts. For example, restaurant group Lettuce Entertain You just announced a partnership with the folks behind the Whole30 program to open a virtual, delivery-only Whole30 Restaurant, with food delivered by Grubhub.

For the SoHo locations, Zuul will focus on established restaurants that have existing brick-and-mortar locations but are looking to grow their delivery orders.

Zuul told Eater it is aiming to fulfill delivery orders in 15 minutes total from the time the order is placed, which would certainly satisfy consumers’ need for speed when it comes to food nowadays. Whether or not the company can meet that goal on every order will depend on the people actually delivering the food. Zuul is using Uber Eats, Grubhub, and DoorDash services for the actual delivery, so part of the 15-minute strategy is at the mercy of those couriers. That said, Zuul is apparently offering drivers a waiting area that includes plenty of phone charging stations, places to sit, and refreshments like coffee and tea, all of which could entice drivers to arrive a little early so they’re onsite as soon as an order is ready for delivery.

For now, Zuul will focus on the New York market, which means it won’t have a ton of direct competition at first. That will surely change once Kitchen United comes to town.

Kitchen United Announces Another Expansion for Its Ghost Kitchens

Kitchen United (KU) is making good on its promise to open multiple new locations over the course of 2019. The company announced another expansion today, this time for new locations in San Francisco and Los Angeles as well as a second spot in Chicago.

KU launched in 2017 with the aim to provide extra kitchen space for restaurants needing to fulfill off-premises (delivery) orders. The first KU location, in Pasadena, California, holds enough space for 15 restaurants to use. Other locations are similar in size.

Whereas some ghost kitchens exist to let restaurants or entrepreneurs try out new concepts and brands they might not have otherwise brought to market, Kitchen United is specifically aimed at helping existing restaurants manage the extra volume in orders created by delivery.

And the demand for delivery grows, we can expect to see more of these so-called ghost kitchens, from Kitchen United and others. The market for online food delivery is projected to be $30 billion by 2022 — and that’s just for the U.S.

Various iterations of the ghost kitchen have been popping up in response, and raising some hefty funds. Berlin-based company Keatz recently raised €12 million (~$13.6 million USD) for its virtual-kitchen network that operates around Europe. Uber is dabbling with its own ghost kitchens in Paris. Uber’s former CEO, Travis Kalanick, now runs a cloud kitchen company in Los Angeles.

Kitchen United, meanwhile, has expanded from the original Pasadena, CA location to Chicago’s River North neighborhood, and has already announced plans to open new centers in Atlanta, Scottsdale, AZ, Austin, TX, and Columbus, OH in 2019. (These are currently under construction.) A quick look at the expansion map on the KU site reveals that Houston, Dallas, NYC, and Washington, D.C. are also in the works for 2019.

According to the press release, the new LA, SF, and Chicago locations are in the process of accepting restaurant partners. Each will house between 10 and 15 restaurant brands.

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.

Kitchen United Expands Into Atlanta and Columbus

Kitchen United announced today that it has signed lease agreements for spaces in Columbus, OH and Atlanta, GA. The expansions, slated for Spring 2019, will increase the virtual kitchen hub’s presence in markets that are fast becoming hotbeds for food-delivery competition.

Kitchen United, who bills itself as a “culinary on demand” startup, opened its first commissary kitchen space in May 2018 in Pasadena, CA. It followed that launch with a Chicago location that opened in November of the same year, following a $10 million funding round led by GV.

Kitchen United spaces are built specifically for delivery businesses, and can each hold between 10 and 20 different “concepts” (the company’s word for clients). The goal is to provide restaurants space to fulfill the influx of delivery orders without having to open another full restaurant and incur the expense and business risks that go along with an expansion of that magnitude. “Restaurants” rent space and share equipment, and Kitchen United has its own staff to handle dishwashing and packaging orders for delivery drivers.

As my colleague Chris Albrecht wrote last year:

Unlike other virtual or “ghost” kitchens, where restaurants can experiment with new cuisines, Kitchen United’s main mission is to help national and local restaurant chains keep up with demand for their existing menus. Restaurants that want to sign on with Kitchen United can either pay straight rent, or, if Kitchen United believes it can hit the right numbers, there is an option for revenue sharing.

According to the press release, the Columbus location is set to open near the city’s downtown and close to the Ohio State University. The Atlanta location will be housed in the fast-growing West Midtown area, with close access to Georgia Tech. Both locations are in areas that have undergone significant growth in recent years, and give us an idea of markets Kitchen United is targeting. While places like Los Angeles and New York City are part of the company’s future expansion, they also share a list with a number of slightly smaller U.S. cities, Phoenix, Seattle, and Denver are among them.

It makes sense, in many ways. Mega-cities like NYC and LA are important places to get a foothold, but they’re also extremely crowded — arguably saturated — markets for virtual kitchen concepts. But with people leaving top-tier cities in favor of places like Dallas, Nashville, Atlanta, and even Tampa, and with the food delivery market expanding at a blinding pace into those places, there’s both money and reputation to be made.

Kitchen United said in a press release it plans to open 15 new locations in the coming year, including those mentioned above.