On the off chance that restaurant owners haven’t heard, ghost kitchens are a big thing right now.
Although they only started to pop up in droves during the COVID-19 pandemic, ghost kitchens show no sign of disappearing even after the global reopening. The global ghost kitchen market was worth $63 billion in 2021, with experts projecting a 22% increase from 2022 to 2023.
Here’s what restaurant owners should know about the rising ghost kitchen trend, how they operate, and their pros and cons.
What Are Ghost Kitchens?
Also known as “cloud” or “virtual” kitchens, ghost kitchens paved the way for the crumbling restaurant industry to stay afloat amid pandemic lockdowns. With more people fearful of leaving their homes at the risk of getting sick, the demand for online meal delivery services ramped up.
Typically, ghost kitchens cater to areas with a high stream of online food ordering. This trend is particularly prevalent among Millennials and Gen Z. In fact, 80% of surveyed Gen Zers are more likely to order takeout in 2022 compared to before the pandemic, and 70% said the same for delivery.
However, ghost kitchens aren’t your typical fast-food drive-thru. Lacking an actual storefront, they’re licensed food preparation facilities that prepare meals from delivery-only menus.
As such, restaurant owners may feel tempted by lower real estate prices to open a ghost kitchen. You don’t have to dish out ample funds to purchase and operate an eatery in a prime location. They also allow you to manage multiple brands under one “virtual restaurant.”
How Do Ghost Kitchens Operate?
Running a virtual kitchen is different from a traditional restaurant. You’ll first need to launch your kitchen across several delivery apps where customers can place orders.
A ghost kitchen must have all the necessary equipment and amenities to meet consumers’ needs. Flexibility is critical, especially since ghost kitchens allow you to lean into inventive culinary creations and experimentation.
Customers place orders through whatever delivery app they prefer, which comes up on the ghost kitchen’s online order system. Staff will then cook the meal and deliver the food to the customer.
Much like the conventional food service industry, the more accurate and faster your deliveries are, the better customer reviews you’ll get.
Pros and Cons of Ghost Kitchens
Ghost kitchens are worth getting excited about, and restaurant owners should be aware of their growing popularity. However, there are some downsides alongside the advantages of running a cloud facility. Here are the pros and cons of owning a ghost kitchen.
Advantages
If you’re interested in launching your own ghost kitchen, the following benefits will certainly validate your excitement.
Enables Meal Creativity
Many fast food restaurants are adding healthier menu options and swapping out less-popular items for new products. Unlike drive-thru establishments, customizable offerings are the core business models for places like Subway or Chipotle.
Ghost kitchens allow even greater flexibility and customization, as cooks can lean into more innovative creations from a simplified menu. This helps cut overhead costs and having to adhere to chain rules.
Improves Sustainability
Because ghost kitchens are much smaller than traditional eateries, they have a much smaller footprint.
They also don’t have to provide plastic straws or utensils to customers by removing the front-of-house section.
Considering more people are trying to live more sustainably and cut back on plastic consumption, ghost kitchens are a great way to reach eco-conscious consumers.
Meet Modern Expectations
Delivery and pickup are critical to meet society’s expectations for maximum convenience. These consumer behaviors will be around for a while, too.
In a recent survey by Raydiant, 28% of restaurants will offer delivery and pickup exclusively, closing their dine-in spaces for good.
Ghost kitchens achieve this from the start with their launch as an entirely virtual restaurant brand.
Cost-Effective
Of course, ghost kitchens reduce real estate costs dramatically in bustling cities and neighborhoods where restauranteurs have to pay a premium for foot traffic.
Although they still require a license to operate, ghost kitchens don’t necessarily require permits, inspections, advanced preparatory equipment, or dine-in furniture.
Disadvantages
Ghost kitchens may have become popular overnight, but they’re still in their infancy – meaning the industry continues to work out the kinks. Here are a few disadvantages you should know about before launching one.
Third-Party Delivery App Costs
Third-party delivery apps are convenient, allowing customers to customize and place orders online. However, they can also be expensive.
Although you’ll expand your reach when you partner with numerous delivery apps, they could eat about 20% to 40% of your kitchen’s revenue.
Fewer Customer-Facing Interactions
Some restaurant owners dream of connecting with their patrons and building a sense of community through their establishment.
With a ghost kitchen, you’ll miss out on face-to-face interactions with others. There won’t be a sit-down dining area or the ability to welcome guests and take orders. There may not even be an actual staff you can foster relationships with.
If customer-facing business matters, then a ghost kitchen might not be the right business move.
Meals Must Be Geared for Delivery
In a traditional restaurant setting, chefs have far greater control over food presentation. After all, their culinary skills are an art form.
Remember that a ghost kitchen is strictly delivery-based, meaning presentation isn’t necessarily essential.
While you’ll want to avoid sloppy dishes, you should anticipate having to put sauces on the side or for garnishes to fall over during transportation. Usually, as long as the food is excellent, customers won’t mind.
Ghost Kitchens Are Great but Dining Experiences Still Matter
Ghost kitchens aren’t for everyone. As a restaurant owner, it’s understandable to have reservations about them. Although we’re likely to see more ghost kitchens pop up rapidly, there will always be a desire for sit-down dining experiences, too.
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