The changing circumstances of a post-COVID world have led restaurateurs to be creative and adapt to stay in business. Despite the fact that indoor food is recovering in the U. S., the rise of ghost kitchens (restaurants that only sell food at home) is popping up in all major cities to meet the growing demand. A ghost kitchen, also known as cloud kitchen, dark kitchen, virtual kitchen or ghost restaurant, is a food preparation and cooking facility only for food orders at home.
Ghost kitchens are kitchens built exclusively for home delivery and are changing the rules of the game for the future of gastronomy. Unlike a traditional restaurant, customer touchpoints exist online without a physical location. A customer places an order through the company's website or a third-party delivery application, the food is prepared in the kitchen and the food is delivered to the customer. Some are listed as a singular entity, such as the elegant hot dog supplier Dog Haus.
Others can serve as a hub for several interdependent restaurants, such as the start-up company Cloud Kitchens, founded by former Uber CEO Travis Kalanick. These establishments can manage a small ship and meet the growing demand for delivery. Some of the features of ghost kitchens include the absence of physical presence, minimal waste, lower risk and a flexible and adaptable menu. As online concepts thrive, many traditional restaurants continue to suffer from high rents, staff shortages and changing restrictions related to the pandemic in their attempt to return to normalization.
To go deeper into this market, according to Statista, in 2020 the global ghost kitchen market was estimated at $117 billion dollars and that figure is expected to reach $223 billion dollars in 2027. As customers increasingly rely on contactless food delivery, new ways of bringing food closer to them and doing so faster have evolved. Ghost kitchens can be moved to where demand is highest and adapted quickly to adapt to changing customer preferences. Top brands such as Wow Bao, The Halal Guys and Dog Haus are having explosive success with this model. It allows restaurants to make a profit and, at the same time, reduce costs during a global pandemic (still ongoing).
In the future, a booming ghost kitchen market could also encourage advanced restaurant automation. In the next 5 to 10 years, this change could lead to the full automation of the production of certain dishes and menu items, such as coffee, pizza and ramen, in order to promote faster service and reduce food production costs. Currently, Kitchen United, Cloud Kitchens, Uber Eats and Kitopi are leading the development of ghost kitchens. However, major restaurant chains are also making adjustments to this space.
Chick-fil-A is venturing into exclusive cooking establishments in Louisville and Nashville that prepare individual meals and orders for delivery through the third-party app DoorDash. McDonald's recently opened a ghost restaurant in London, and Bloomin' Brands is testing exclusive kitchen formats for home orders and takeaways. Marketman is a collaboration software between food service operators and their suppliers that helps multi-unit operators and independent restaurants improve their bottom line. Just as Zoom has benefited from remote work policies and online retail sales have exploded, COVID-19 has caused the ghost kitchen trend to flourish.
In conclusion, one of the main drivers of growth in this market is changing cost structures of food service environments which have allowed ghost kitchens to find their colossal opportunity.
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