People the world over are warming up to the growing phenomenon of ghost kitchens. If this has captured your curiosity, too, here’s a blog to help you get all the basics right. From what is ghost kitchen to how you can develop it to its types, let’s dive in deep before you decide to take the plunge.
With advancements in technology and mobile food delivery apps, ghost kitchens have become an inseparable part of the food industry today. The global ghost kitchen market, per Statista, had recorded a valuation of more than 43 billion USD in 2019.
But given its consistent popularity and the significant shift in the demand and choices during the Covid-19 pandemic, the market is now projected to reach a whopping figure of $1 trillion by 2030, as per Euromonitor, a London-based market research firm.
Before we explore more such insights, let’s first understand what a ghost kitchen is.
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What is a Ghost Kitchen?
A ghost kitchen is a commercial kitchen that does not have a consumer-centric storefront or an on-site dining room for its customers. That means there is no lavish restaurant-like setup, tables, dine-in, and takeaway. Instead, the core food delivery business model of ghost kitchens is focused on optimized food delivery of orders taken online via the website or third-party food delivery app or through the phone.
Consider it as a virtual restaurant or store fulfilling the quality meal requirements of consumers through its delivery-friendly menu from a small physical space. Ghost kitchens have limited staff, no front of house staff, no dine in customers, fulfills only delivery orders. They are mostly set up out of a small space, a shared space, or even inside a restaurant kitchen.
Pros and Cons of Ghost Kitchen
- Easier to meet customers’ demands
- Great possibility of reaching out the targeted audience
- Ghost kitchen offers more flexibility
- No need of extra kitchen space
- Food operators need extra training sessions for kitchen workers
- Potential delivery issues
- A new business strategy may take more time to come into effect
- Less chances of customer loyalty
How can You Develop a Ghost Kitchen?
The process to build your own ghost kitchen is less tedious than starting a brick-and-mortar restaurant. It involves less startup and operational costs. With such a kitchen, you don’t need to be in a prime location because you don’t rely on foot traffic, offer an extra menu item, or hire an army of professionals and additional kitchen staff. All you require is:
- A small, sufficient facility or co-working space (either rented or owned if you have the investments) with no waiting area or parking space
- Commercial kitchen equipment
- A small workforce of 2-5 people
- A well-curated delivery menu
- Quality packaging for the best experience
- Once you have finalized a facility and set up all the necessary equipment, the next step is to partner with multiple delivery services apps to launch your brand online. You will then start receiving orders online and prepare the meals accordingly.
The best part? You don’t need to be worried about the hospitality management or the logistics and fulfillment of delivery operations. The delivery partners take up this headache for you. After you mark the order as complete in the app/website, the runner will show up, pick up the order from you and deliver it to the customer in the shortest timespan possible.
With a delivery-only restaurant, your 100% focus remains on cooking delectable dishes and exploring fresh menu concepts.
What are the Types of Ghost Kitchens
At present, the world is witnessing the rise of ghost kitchen trend in three primary forms:
1. Incubator or Pop-up Kitchens
A kitchen that is attached to a traditional restaurant is called a pop-up or incubator kitchen. This type of kitchen solely focuses on fulfilling the deliveries and online orders of the restaurant. In other words, there is a distinct staff to handle the restaurant’s pop-up kitchen and regular dine-in kitchen.
That ensures both the processes stay independent, 100% accurate, faster, clutter-free, and more efficient. Any existing restaurant owners and cafes keen on creating additional revenue streams can experiment with incubator kitchens. Since they already have more space and equipment, it turns out to be a simpler and cost-effective option.
2. Commissary or Shared Kitchens
A commissary kitchen or shared kitchen is one of the most successful models of ghost kitchens. You can call it a shared kitchen space that is owned and/or operated by a third-party organization or an entrepreneur, who, in turn, rents it out to multiple virtual restaurants brands or food entrepreneurs. Each ghost kitchen model in such arrangements shares everything from cooking to storage space to refrigerator.
In simple words, the kitchen operators are only responsible to prepare food and new menus minus the overheads that come with leasing a building. In some cases, the third-party companies also take care of the equipment cost and set up, minimizing the cost further for you.
3. Kitchen Pods
A kitchen pod is nothing but your flexible kitchen with all the required kitchen accessories in the form of an easily transportable shipping container. Also called dark kitchens, these types of ghost kitchens allow you to cook on the go and cater to customers wherever you like.
However, since these kitchens lack proper ventilation and natural light, it is hard to maintain standard safety measures. At the same time, they are convenient and effective to operate with a minimal cost.
Do Ghost Kitchens Make Profits?
Even if you start small, ghost kitchens are profitable. Compared to conventional dine-in services, the upfront cost of running a kitchen is low, along with other overhead costs, such as rent, labor, and equipment costs. The wastage of food is also minimal.
In addition to that, you can try out new food concepts from a single space and establish your presence across food delivery platforms. That helps broaden your customer base significantly while strengthening your online visibility. That eventually opens up more revenue streams with pretty much the same investments.
How Upper Route Planner Helps Your Ghost Kitchen?
From placement of online order to performing on time delivery, Upper can help you in multiple ways. Running a ghost restaurant, biggest challenge is to deliver food as quickly as possible. The route planner can churn out the best routes for your delivery agent in a such way that customers do not have to wait for long.
With an auto-assign feature, Upper automatically informs drivers about delivery and guides them to reach the location quickly. As a result, your food will travel well to the food buyer. Whether you are running a dine-in restaurant, or ghost kitchen, Upper does not leave any stone unturned to provide excellent user experience.
Here is why Upper can be ideal companion for your ghost kitchen.
- Provides optimized routes to reduce delivery time
- Save hours of manual route planning and vehicle costs
- Removes communication gaps between delivery team
- Your drivers do not require extra training session
- Sends automated delivery updates to customers
- Improves delivery efficiency
- A driver-friendly app to record e-signature
Save Delivery Planning Time with Upper
Running a ghost kitchen? Upper could be a perfect fit to your delivery business. Manage online food orders, get optimized routes, and enhance user experience using Upper Route Planner.Start Upper for Free
A ghost kitchen or dark kitchen functions as a virtual brand that only prepares meals for delivery or take away. These kitchens are situated in areas according to the concentration of delivery demand. The chef prepares the food and delivery drivers pick up the packages from them and deliver them to the customers.
Ghost kitchen brands are popular because they work as low-cost alternatives for people who want to open a cloud kitchen business but do not have the funds to invest in a full-fledged restaurant space or want to have multiple brands. They focus more on cooking and delivering rather than offering a dine-in experience. Most people now prefer to order food to be delivered at home by Uber Eats or DoorDash. Ghost kitchens work really well for such an audience.
Ghost kitchens or dark kitchens have several benefits:
- Requires less space
- Doesn’t require a large team of food service workers
- Can rely on third party delivery services
- Minimal investment
- Lower cost of labor & no additional costs
- Reduced waste of food
In a debate between a ghost kitchen vs virtual restaurant, the former has an edge, especially for entrepreneurs. Ghost kitchen is only available online which further provides easy access to reach the food buyers. Whereas a virtual restaurant has already existing brick-and-mortar restaurant kitchen which often requires third-party help as far as food delivery is concerned. Hence, a ghost kitchen is a better option for food business owners.
The ghost kitchen setup seems a lucrative arena for established restaurants, traditional restaurants, and individual food entrepreneurs alike to venture into. The shift in lifestyle and demand that are collectively fuelling the online food delivery services is here to stay. Moreover, it’s a flexible business model to adapt to evolving customer needs. So, if you are planning to start your ghost kitchen company, now is the time.
For anyone opting the ghost kitchen business model will have to figure out the delivery aspect of the business. Your business will rely a lot on how and when you deliver the meals you make in your ghost kitchen. So you need a strong delivery model.
For your delivery team, you will need the right tools as support like Upper Route Planner. A software like Upper Route Planner will help you plan and deliver the meals on time in the most cost-effective manner.
To know how route planner software is helpful to your ghost kitchen concept and restaurant business of meal delivery, then start your free trial today and start exploring a range of its benefits.
We are developing the ultimate guide to Ghost Kitchens. There will be many more articles in this series. You will want to refer to our upcoming blogs for more information on ghost kitchens.