With the global pandemic and the numerous measures related to the restaurant sector, the word “Dark Kitchen”, or “ghost restaurant” has become in a few months the concept that shadows the traditional restaurant. Let’s go back today in more detail on this trend that has exploded for several months.
The “Dark Kitchen”, this new restaurant model created in the United States, more than two years ago now, is born from a strong agility and a great capacity of innovation. These ghost restaurants are dedicated to the delivery business, without the physical experience of a traditional restaurant. This trend, boosted by the success of takeaway delivery platforms, is now booming and for good reason. But some had already understood the stakes of this new model, such as Deliveroo, which as early as 2017 bet on these platforms in England, before setting its sights on other European countries. This innovation makes the promise of a unique customer experience, including quality meals and the intimate comfort of home dining. According to Euromonitor, the Dark Kitchens market will be worth $1,000 billion by 2030. There are more than 7,500 in China and 3,500 in India.
The influences that gave birth to them…
A few decades ago, this concept of the so-called “ghost restaurant” might have seemed unimaginable. But then, what trends and influences have made this one of the most promising restaurant concepts for the year 2021?
Generation Y, or also known as “Digital Natives” is largely responsible for the digitalization of many industries. This generation, which includes people born between 1980 and 2000, is a multi-channel, ultra-connected generation. With a close and intimate relationship with digital, this generation makes technology a necessary tool in their daily lives. Consequently, the digitalization of restaurants responds perfectly to the demand of this target.
Takeaway delivery has also become a reference and a standard in many sectors over the last 15 years: €3.3 billion is the estimated value of home catering. With the arrival of home delivery from giants such as Amazon, it has found an obvious place in the restaurant market.
Covid-19, has largely favored this new consumer trend. Indeed, due to the confinements, the closing of some physical establishments or the new sanitary norms, the global pandemic has strongly accelerated this concept. According to the NPD Group barometer, the restaurant sector has been able to reinvent itself through take-away sales and home delivery. On a positive note, some senior citizens, more reluctant to the arrival of these new digital trends, have been seduced by home delivery during this difficult context.
What are the advantages of these “ghost restaurants”?
The rise of take-out and home delivery, followed by the current global situation, have made it wise to consider this new digital restaurant concept. But what are the real benefits of this new trend?
1. A significant reduction in operating costs
Investing in a Dark Kitchen obviously means less financial input than for a traditional physical restaurant. Indeed, the equipment (tables, chairs…) or the decoration are not useful anymore since these 2.0 restaurants do not welcome the general public. Therefore, human resources are also reduced, since they are limited to the kitchen staff. Finally, the premises also play a major role in reducing costs. They are necessarily smaller and can be located in areas with less traffic.
2. High adaptability and flexibility
Ghost restaurants provide the opportunity to easily experiment with new brands, menus or concepts. As quickly as consumer food trends change, Dark Kitchens can adapt and test concepts without fear of being over-committed. This allows Dark Kitchens to offer a wide variety of menu items. Indeed, Junk Food and Healthy Food brands can come from the same kitchen. This great flexibility allows these restaurants to maximize their chances of reaching a large clientele, and thus increase their sales considerably.
“Dark Kitchen”, the limits of this model!
More and more trendy, these ghost restaurants evolve on a competitive market. There are some limits to consider when you want to start in this connected restaurant.
1. The physical absence
Dark Kitchens have no physical presence which means that their visibility is entirely digital and that they face strong competition. Therefore, a huge budget in advertising and marketing is needed to be competitive on the market.
Moreover, the absence of customers in physical stores could impact the staff. The latter could feel aggrieved in this new work environment, as well as impacted by the reduction in tips.
This unique digital presence also raises the issue of customer loyalty. These restaurants need to offer consumers a more than qualitative customer experience if they want to build strong relationships with them from a distance.
2. Dependence on online platforms
There are real technological requirements, in these virtual restaurants, which are mainly based on the online service. They depend on online platforms, such as Uber Eats, or DoorDash, and they impose their prices and commission rates on them. This reservation system must ensure smooth operation and security. That’s why some restaurants prefer to use their own reservation system on their website. By surrounding themselves with experts in this field, these Dark Kitchens become agile and increase their customer satisfaction. Having their own software and hardware allows them to control their digital customer journey.
What configuration of “Dark Kitchen” can be adopted?
In constant evolution, ghost restaurants can be set up in different forms. However, the operational process remains the same: dishes are ordered, cooked and delivered. Their configuration differentiates them:
1. Traditional” ghost restaurants
This is the standard Dark Kitchen model, based on the purchase or rental of a kitchen, accompanied by a delivery network to process orders. The most successful ghost restaurants have often initially adopted this configuration, and then become a multi-brand Dark Kitchen. Jose Fabregat, founder of Food Haven in Spain is a perfect example. He created his first virtual restaurant in 2018, in Barcelona. Today, his concept now has multiple brands and tends to export to the rest of Spain, the UK, as well as the US.
2. 2.0 restaurants to go
Very similar to the traditional Dark Kitchen, these restaurants give customers the option to choose home delivery or pick up their order in Click & Collect directly in the kitchen. It is wise to have a complete solution, both in terms of software and hardware, in order to effectively meet the needs of connected consumers. Based on Business Intelligence, these solutions optimize order processing and management. Based on take-away sales, this model promotes customer loyalty as you can interact with staff in a physical location.
3. Multi-brand “Dark Kitchen
This model is found when a parent company shares its kitchen with its different brands, in order to reduce operational costs. For example, a kitchen can offer 5 or even 8 brands with very different identities: from burgers, to Asian food, to French cuisine without any worries!
4. Outsourced virtual restaurants
This configuration allows Dark Kitchen to subcontract to another specialized company: the preparation of meals, the processing of orders, as well as their delivery. Indeed, the rise of virtual restaurants has not gone unnoticed by entrepreneurs. Many companies are surfing on this trend. This is the case of two Londoners, who are the founders of Karma Kitchen, which specializes in kitchen rentals, and Karma Cans, a meal delivery company.
5. Aggregator-owned ghost restaurants
Delivery aggregators offer free kitchen space for rent. A major advantage for restaurant owners who benefit from the aggregator’s fleet, menu creation, as well as the ability to order online.
Thus, the Dark Kitchen brings the solution to a new consumer trend. With the construction of beautiful brands, these models can ensure to have a profitability sometimes much higher than traditional city restaurants. For this, it is more than necessary to surround oneself with digital experts in order to strengthen one’s brand, develop sales and create new customer paths.