cloud kitchen Archives - Virtual Dining Concepts

Restaurateurs embrace ghost kitchens in a spooky COVID world

Turner/Contributor, A., Lee, A., Putnam, J., Spruill, R., Olson/Staff, J., & Davis, G. (2021, September 27). Restaurateurs embrace ghost kitchens in a spooky covid world. GREENVILLE JOURNAL. Retrieved October 6, 2021, from https://greenvillejournal.com/eat-drink/restaurateurs-embrace-ghost-kitchens-in-a-spooky-covid-world/.

How many restaurant concepts can operate in the same kitchen at the same time? Until more recently, the answer would likely have been rhetorical. But it’s 2021, and the obvious isn’t exactly so obvious anymore.

Now, thanks to the thriving ghost kitchen trend, there can be a half-dozen or more concepts with their own names and identities operating from the same kitchen. And Greenville has dozens of them. In fact, you may have ordered from one without realizing your food was being prepared under a different name in one of your favorite local restaurant’s kitchens.

A ghost kitchen, or “virtual brand offering,” is a professional food prep and cooking facility (restaurant kitchen) designed for delivery-only meals, mostly via third-party services like DoorDash or UberEats. Some ghost kitchens allow takeout or drive-throughs. But, they don’t include a storefront or indoor seating for customers.

They range from unique concepts developed locally by an owner or chef, such as at Saskatoon Lodge, which operates five take-out only concepts from its main kitchen, to major national brands, such as MrBeast Burger, which has multiple locations in the Upstate and 900 throughout the country.

So why are restaurants moving this direction? It’s simple — they need to make money.

Ghost Kitchens pros & cons

Pros:

Test out new menu items without impacting original brand
Turn off online ordering if demand is greater than supply
Fewer staff needed
Little waste if using same ingredients for brick-and-mortar restaurant and virtual brand
National virtual brands provide marketing and support
Easily target and gather customer demographics from specific geographic locations
Can operate when host restaurant is open or closed

Cons:

Third party delivery is expensive and sometimes unreliable
Food via delivery isn’t always delivered at the correct temperature
Inconsistent hours disenfranchise customers
No staff interaction with customers
Removing hospitality aspect can impact staff workplace satisfaction
Creating own online platform is challenging
Extra storage is needed
Relying on unreliable supply chain for even more ingredients

More facts

Number of virtual restaurants in the U.S.: estimated 100,000
Virtual restaurants are predicted to be a $1 trillion industry in the next 10 years, according to Euromonitor
Nearly 60 percent of adults consider purchasing takeout or delivery food is essential to their lifestyle
The existing ghost kitchen boom was accelerated by the COVID-19 pandemic.

Pandemic Pivot

Sasakatoon owner Edmund Woo says, pre-COVID, he had three thriving revenue centers with the restaurant, paleo meal prep service that had been operating for 10 years, and major events for hundreds of people.

“Fast forward, and bam! The pandemic hit,” he says. “All of a sudden, we don’t have a brick-and-mortar and events … so we made that foray into the ghost kitchen space.”

The first virtual brand Woo launched in summer 2020 was Wow Bao, an established concept by independent restaurant icon Richard Melman out of Chicago under Lettuce Entertain You Enterprises. Woo felt confident being aligned with an established brand with the marketing behind it would be the fastest route to success in uncharted territory. After it was indeed successful, Woo launched four of his own original concepts — Lodge Birds, Heavenly Cheese Melts, Lodge Dogs, and Farmstead Greens — based on gaps he saw in the market.

Adam Hayes, executive vice president of Larkin’s Restaurants, made a similar decision about how to best use the kitchen and staff at the Haywood Mall Grill Marks location once restaurants reopened in 2020. To bring in as much revenue as possible with as little change to the Grill Marks operations, he chose to go the route of MrBeast Burger, a smash burger concept his 10-year-old son had become obsessed with via the YouTube channel of MrBeast, Jimmy Donaldson. Both operate at the same time with similar ingredients, and if the restaurant itself gets too busy, they turn off the online MrBeast ordering. Grill Marks is still the priority, Hayes says.

I would say that we definitely learned that we can’t operate two different concepts in the same kitchen.

-Chris Coleman, founder, Scratch House Chicken

Original Offerings

While bringing in one or several national brands makes sense for some operators — like the former Foundations Grill 311 restaurant in the Landmark Building at 301 N. Main St. that is now mission central for at least six ghost concepts — for others, creating their own has benefits.

Executive chef Chris Coleman, a five-year euphoria Greenville veteran, opened up his new Charlotte, North Carolina restaurant The Goodyear House in February 2020. When the shutdowns hit only a few weeks later, he and his partners developed an original fried chicken ghost concept called Scratch House Chicken that became an instant hit.

They pushed pause on it soon after the main restaurant reopened, but one sandwich recently named the second-best fried chicken sandwich in Charlotte remains on The Goodyear House menu. As Coleman and his team looked to open their next restaurant in Rock Hill, they were able to apply what they learned from operating the fast casual chicken concept to successfully launch Old Town Kitchen & Cocktails in August.

“I would say that we definitely learned that we can’t operate two different concepts in the same kitchen,” Coleman says. “We did build a brand that we could possibly open in a food stall or hall should the opportunity present itself.”

Smart Strategy

Vincent Caradonna, owner of Le Petit Croissant in downtown Greenville, has been operating his own ghost kitchen concepts for eight years, starting first with a luxury chocolate delivery service in New York City, and now with four virtual concepts in addition to the regular bakery shop offerings.

“I can create our own competition,” he says. “It’s a way to try different things to see what works. Every time we want to try a product, we’ll operate out of a ghost kitchen.”

Dan Pope of Mission Grill in Anderson began exploring ghost kitchen operations in 2018 while planning to launch new brick and mortar locations around the Upstate. He says it helped them build business in targeted areas and see where their customers were.

For his purposes, the ghost concepts are not the ultimate goal, but rather a means to an end because of the impact they can have on overall hospitality.

“Inherently, they’re digital. It takes a lot of the service out of food service,” Pope says.

With countrywide staffing issues, he’s committed to staff retention, and in his experience, if the service element is removed, he’d also lose the really good, talented staff.

“It’s not a rewarding career, anymore,” he says. “It takes the joy out of making someone else’s day. It’s a little bit of a double-edged sword. You broaden your reach and don’t have to add staff, but the staff that does like the service, you’re going to lose them to someone who does double-down on the service aspect.”

Once a ghost concept is launched, he incentivizes staff with the promise of taking it to a brick and mortar as soon as possible.

“If you want a staff that truly cares about what they’re doing and the success of their business, the worst thing you can do is put them in a job where they’re hidden behind a screen and don’t know who they’re interacting with,” Pope says. “I’d rather not operate a restaurant if I can’t give good service rather than further divide the fairly limited talent pool.”