When 2020 began, the ghost kitchen topic poised to be one of the “it” trends to watch over the coming 12 months. Venture capital was pouring into the space, virtual restaurants of all types were popping up, and major quick-service chains were inking deals left and right with ghost kitchen providers. When The Spoon launched its (now outdated) ghost kitchen market map at the end of 2019, we predicted there would be an explosion of virtual restaurant brands and that some major chains would make ghost kitchens a normal part of doing business.
Nobody predicted a pandemic would swoop in and irrevocably upset the restaurant industry down to its very foundation, which was built on consumers eating meals in dining rooms.
The COVID-19 pandemic’s dire consequences for the restaurant industry cannot be understated, and it would take an entire report of its own to outline just how far-reaching and long lasting the effect will be. A quick overview shows that:
- Between March and May, eating and drinking place sales were down more than $94 billion from expected levels, according to the National Restaurant Association.
- The Association also notes that 4 in 10 restaurants are closed.
- More than half — 66 percent — of consumers are not ready to eat in dining rooms again.
- 1 in 4 restaurants will permanently go out of business because of coronavirus quarantines.
All of this has led to a shift in business models that was underway already but has been accelerated. Off-premises order formats were poised to become restaurants main sales drivers over the next decade. Since the pandemic essentially forced restaurants into a to-go-or-die mentality, that is happening much faster now.
That in turn has ramped up demand for ghost kitchens. However, just because restaurants are closing and off-premises orders are rising rapidly doesn’t necessarily mean every restaurant should follow the same trajectory when considering a ghost kitchen.
This report examines the kinds of ghost kitchens available to restaurants, the elements they need to consider before actually starting one, and opportunities and challenges in the space. Companies profiled in this report include: Kitchen United, Kitopi, DoorDash Kitchens, Rebel Foods, CloudKitchens, Zuul Kitchens, ChefReady, Deliveroo Editions, Panda Selected, Muy, Reef Technology, Fat Brands, Brinker International, Wow Bao, The Halal Guys, Keatz, Middleby/Lab2Fab.