Here's everything you need to know about this industry-wide shift to delivery-only
The pandemic has rocked the restaurant industry. But it's also brought a new type of business model onto the scene: ghost kitchens. As dine-in activity continues to dwindle, ghost kitchens are on the rise.
In fact, 51% of restaurateurs have already shifted to ghost kitchens in the U.S.1
This growing trend is continuing to sweep the nation as restaurateurs latch onto the low cost, low risk alternative to opening a brick-and-mortar restaurant. The traditional restaurant dine-in experience is rapidly changing, and a new age is upon us.
Ghost kitchens allow you to expand your restaurant into multiple locations quickly with minimal upfront investment.
Now, chances are there’s a ghost kitchen right in your neighborhood. Whether you’re looking for commissary kitchen space to test new concepts or a private commercial kitchen, you’ll find them in most cities with a variety to choose from based on your specific needs.
Ghost kitchens come in many different forms, such as commercial kitchens or commissary kitchens. You can take your pick when it comes to what best meets your needs, so you’re up and running in a kitchen that’s fit for your business.
With the rise in ghost kitchens and the increase in consumers browsing for food online, being visible across the top delivery apps is becoming a necessity to beat out the competition.
Online food ordering traffic has grown 300% faster than traditional dining in the past few years, and it’s only going up from there.2
And with that comes an industry that’s estimated to grow to a net worth of $1 trillion.3 Yes, trillion, with twelve zeros.
Now, more than ever, it’s vital to adapt to the growing changes in market demand, so your restaurant is future-proof.
We’re breaking down the key areas of growth in delivery across the U.S. and beyond, so you can better prepare for the future of delivery.
Ghost kitchens are here to stay
Currently in the United States, there are approximately 1,500 ghost kitchens and counting.4
As more delivery-only options become available, restaurateurs are shifting to a less risky alternative that will bring stability back to their business. Shifting to ghost kitchens helps ensure your business stays intact regardless of stay-at-home measures.
You’re also able to launch multiple brands from one kitchen. You’ll be running your restaurant business at maximum efficiency by leveraging similar ingredients across multiple brands to drive revenue and eliminate wasted ingredients. Think about it… when your presence is digital, what’s stopping you from running a taco shop and a breakfast burrito brand out of the same kitchen? That way, you’ve got double the presence on delivery apps, but your labor and overhead is still minimal.
With convenience and easy access to a large variety of restaurants online, there’s no question that ghost kitchens are the future. We’re seeing the ghost kitchens trend spark across the globe. Now you can rent a kitchen in most cities, which means the sky’s the limit for your restaurant business.
And the United States isn’t the only market seeing a rise in ghost kitchens, China and India have surpassed the United States in total ghost kitchens, and are up to a total of 7,500 and 3,500 ghost kitchens, respectively.3
This means endless possibilities for you and your restaurant business. International growth is now within reach for more restaurants than ever before.
Say you’ve got a restaurant in Austin, but you’ve always wanted to expand to other locations in Texas and beyond. Now with more ghost kitchens popping up across the country and around the globe, you can easily shift and expand without the large upfront costs of a brick-and-mortar. Since it’s a low risk model, it’s also a good way to test your concept in a different market before building out a brick-and-mortar.
You’re also able to reach more customers online without the need for a physical storefront.
As you shift more of your business online, there’s more flexibility to pivot and expand to new markets.
If you’ve been wondering which city should be on the horizon for you and your restaurant business, we’ve got the inside scoop on which ones have the most delivery potential.
Curious if there's a ghost kitchen near you? Here are the fastest growing cities for ghost kitchens
Wondering where you should be opening a ghost kitchen? To name a few cities that are trending in the delivery market, there are a ton of ghost kitchens in Chicago, New York, Los Angeles, San Francisco and Austin. But it’s not just the usual suspects. We’re seeing everything from food startups in Newark leveraging this model, to ghost kitchens in Providence.
Whether you’re living in the middle of a bustling city, or a smaller neighborhood, there’s likely a ghost kitchen in your vicinity that you can shift your brick-and-mortar to.
Los Angeles ghost kitchens have notably continued to rise in popularity as more restaurants have had to shift to pick-up and delivery-only during the pandemic.
Not only are restaurant chains in big cities catching on, but beloved mom and pop shops across the country are expanding with ghost kitchens to new areas large and small, reaching more customers everyday.
As restaurants across the U.S. have been forced to close due to stay-at-home measures, ghost kitchens have been the next best alternative to stay afloat during a pandemic.
Even as some cities are reopening for traditional dine-in service, the need for ghost kitchens is continuing to rise due to capacity limitations.
For instance, in Texas, dine-in service has been limited to 50% capacity, which is driving more and more activity in ghost kitchens, where capacity limits are no longer an issue.5 Plus, there’s no need for a large front-of-house team when you’re operating in a kitchen designed for delivery efficiency.
If you’re planning on opening a ghost kitchen, you can rest easy knowing you’ll be up and running in as little as one month at a fraction of the cost of your brick-and-mortar restaurant.
You’ll also be located in a delivery hotspot, so you’re able to reach more customers than ever before.
When you partner with CloudKitchens, you’re provided with a kitchen space and on-site team that’s dedicated to fulfilling each online order you receive. Each kitchen comes equipped with the proprietary software needed to track orders and decrease delivery time, meaning more happy customers coming back for more.
All your delivery orders are streamlined onto one single tablet, regardless of which delivery app the customer is using. This means real-time, accurate data right at your fingertips.
With a dedicated onsite fulfillment team ensuring each order gets in the hands of the right delivery driver, you’re able to cook up more orders and get them into the hands of your customers in less time.
As ghost kitchens continue to grow at an exponential rate, more and more restaurants will be competing for online real estate. Now’s the time to stay ahead of this growing trend.
Sources:5 https://www.texastribune.org/2020/06/26/texas-bars-restaurants- coronavirus-greg-abbott/
More insights & stories
There’s more where that came from.
Get in the know and check out our additional insights