Take a look at this picture.
24 hours prior to this snapshot – this building was a plain white shell.
Now, it’s bright red. It has a DoorDash logo and dozens of people inside preparing food for customers using their (exploding) delivery service.
This is a new model popularly termed: a ghost kitchen.
If you’re not in the know, ghost kitchens are restaurants that exist only on meal delivery platforms like UberEats, DoorDash, etc. They don't maintain large dining areas or turn tables, stock buffets, or prep silverware. Customers never enter their front doors!
We’ve noticed ghost kitchens popping up more and more and we think traditional restaurants need to be ready to compete with them.
- Low barriers: In expensive cities, a nice restaurant can easily cost $1m for rent, supplies, staff, and furniture to start. But a ghost kitchen entrepreneur can easily create different menu ideas, buy that day’s ingredients, see if customers place orders, then get feedback in a few hours. Expansion can be done city by city.
- Expert buy-in: Tilman Fertitta is a restaurateur who owns Mortons, Landry’s and more. He didn’t think that food delivery would be as big as it is now, but has since been converted into a believer, even buying a food delivery service for $305m. Travis Kalanick, founder of Uber, saw the growth of UberEats and started CloudKitchen, a business focused investing in ghost kitchen businesses.
- Huge growth: UberEats grew revenue 149% in 2018 to $1.5b. 2019 and is looking at another year of huge growth. If something is already at that scale and growing that fast…that’s a trend I want to hook my wagon to.
How will your favorite restaurant compete with ghost kitchens when they show up in our zip code? Our team of creatives and digital marketers has a plan that can help every restaurant compete to the best of their ability with their budget restraints in mind. Find out more about this concept below: