While it sounds like something out of a Stephen King novel, “dark kitchens”, also known by the even eerier name “ghost kitchen”, “cloud kitchen” or “virtual kitchen”, have been steadily rising in popularity with restaurant brands.
The concept is quite simple: dark kitchens are focused exclusively on preparing food for delivery. That means no seating, no diners, and, most often, no take-away.
Many dark kitchens are also “volume” kitchens that grew out of the need to meet the demand for increased orders during peak dining hours such as lunch and dinner to best handle the high volume in a short time frame.
While the dark kitchen concept was already on the rise prior to the pandemic, the massive surge of food delivery has made them an invaluable asset to F&B brands that have them. Being solely focused on preparing meals, without the other requirements of a full-service restaurant, brands that have a dark kitchen system to go along with their dine-in options have been better prepared to weather the storm in lean economic times, such as those brought on by the pandemic.
Boom Time Ahead
According to a report released by Euromonitor International (EI), the dark kitchens and “virtual” restaurant sector will worth set to be worth $1 trillion by 2030.
“The rise of on-demand food delivery is driving a sea change in the global food and drink industry,” according to EI.
“Ghost kitchens represent an important component of this process. As freshly prepared meals and snacks become a larger part of our lives, more production will move “into the cloud,” with a growing separation between production sites, points of sale, and consumer interaction.”
Another sign of the rise in dark kitchens is the growth of food hubs that house several different dark kitchens in one building for several different brands. While looking like a normal warehouse on the outside, a new food hub in Melbourne, Australia recently opened with 26 dark kitchens now in operation.
The facility, which is run by ChefCollective, describes itself as helping “restaurant and F&B establishments reimagine an old model, provide the infrastructure and strategic services to solve challenges and help them drive long-term success in this ever-changing digital world in the F&B industry”.
While building a popular restaurant brand that people can sit down in and experience is no easy task, the challenges faced by this growing new industry of delivery-focused services offers challenges all their own.
The recent operation in Australia features brands both big and small including global operations such as Carl’s Jr.
ChefCollective spokesman Mark Heath recently told the Brisbane Times that the concept also offers flexibility to aspiring entrepreneurs.
“What that means is you can start a restaurant in as little as a month – we’re very flexible and very easy. And for the consumer it means a tonne more choice coming out to Brisbane,” Heath told the Brisbane Times.
He added that “the majority of businesses that move into our kitchens have an existing restaurant and they’re doing really well in online food delivery, so they move that component into our facility.”
Building the Brand
While building a popular restaurant brand that people can sit down in and experience is no easy task, the challenges faced by this growing new industry of delivery-focused services offers challenges all their own.
As the EI report notes, “Ghost kitchens and virtual restaurants both represent adaptations to booming delivery demand, one from the production side, the other branding.”
Without the traditional touch and feel of a dine-in experience, ghost kitchens need to put added emphasis on their branding efforts.
In a recent interview with the Sifted, Carl Tengberg, founder of the one-year-old Nordic dark kitchen startup Curb Food, which recently secured €20m in new funding, the key to the success of the new food service model is changing previous consumer habits and building a brand that can service changing consumer tastes.
“If out of 25 meals a week, people order 15 of those via food delivery, it has to go beyond burgers and pizza. It has to be a much more personalized experience and to offer much more choice, so what we’re trying to figure out,” Tengberg told Sifted.
Growing Market for Cooking Appliance Brands
As the saying goes, all boats rise with the tide, and with the rise in popularity of dark kitchens, professional cooking appliance brands have a great opportunity to supply the increasing demand.
Unlike traditional restaurant kitchens, dark kitchens buy cooking appliances such as griddles, fryers, and ovens based on peak volume demand. They actually create an “overcapacity” if we compare it to a normal table service restaurant.
Both restaurants and professional kitchen appliance brands would be wise to focus their brand messaging to appeal to the increasing number of digital diners who like to dine with delivery.
For example to cope with a 2-3 hour dinner bracket a dark kitchen may need a fryer capacity of 25-30kg per hour. Serving 500grams of fried food in two minutes is very challenging for a standard fryer and the tendency is to buy more equipment to ensure demands during peaks can be met.
However, during the off-peak hours, the equipment stands idle and the ROI flattens out until the next peak. This is an especially keen insight for induction cooking manufacturers, which offer the benefits of speed, lower operating costs, a cleaner, and cooler environment, and safer preparation when compared to traditional gas and electric element cooking equipment.
This provides a unique opportunity for induction brands to position themselves as “dark kitchen specialists.”
As the Euromonitor studies show, this is an exciting growth industry to keep an eye on in years to come. And both restaurants and professional kitchen appliance brands would be wise to focus their brand messaging to appeal to the increasing number of digital diners who like to dine with delivery.
Contributed by Martin Vermeulen.
