Increased demand for takeout food orders is one of the most prevalent developments the food industry has seen in recent months. Many customers still opt for at-home delivery options over the conventional restaurant experience, even with loosened dining restrictions. But while the need for takeout orders has accelerated, anyone keeping a keen eye on global trends knows this preference is not new.
Saudi Arabia, the United Arab Emirates, Thailand, and South Korea are among the leaders in this international movement, with other countries following closely behind. Second Measure noted that U.S. restaurant food delivery increased by 52% from last year.
In response to the increased demand for takeout orders, a new business model has emerged to tackle delivery challenges. Though you may have heard it referred to by many names – the ghost kitchen, virtual kitchen, or cloud kitchen – the idea is the same: to utilize an out-of-the-way space that focuses on food production, improves the delivery cost, and cuts out the delivery app middleman.
But what exactly is a ghost kitchen? We’ll answer some of the most commonly asked questions so you can decide if a ghost kitchen model is right for you.
Types of Ghost Kitchens
In the food delivery industry, two common ghost kitchen concepts have emerged. A ghost kitchen provides flexibility that enables you to utilize a model based on your specific needs.
The Popup Model: Not to be confused with the popup restaurant – an eating establishment open for a limited time – the popup kitchen model is ideal for restaurants that already have an existing dine-in space. By focusing on delivery-only menu items, these kitchens are a great way to corner a specific food category and streamline their delivery program. The popup kitchen is a space within a traditional restaurant designated solely for delivery food items and typically works with a separate staff. This model is a fantastic way to experiment and corner a niche cuisine for additional revenue.
The Commissary/Shared Kitchen Model: For those who don’t have an existing brick-and-mortar location, a commissary kitchen model may be the way to go. This model enables you to rent shared kitchen space and cut down on the costs associated with opening a dine-in restaurant. These spaces include equipment that support batch cooking, so that you can start food production immediately. The kitchens are generally housed in warehouses in high-demand delivery areas, so you can focus on efficient food production and quick turnaround.
The Structure of a Ghost Kitchen
So, how do you go about setting up a ghost kitchen? While traditional brick-and-mortar restaurants must consider several factors to create an optimal environment, the ghost kitchen model streamlines operations to concentrate on takeout orders.
This simplified model means less staff and more attention to the details that enhance the customer's order and delivery experience. Every part of the process, including menu items, kitchen layout, order tracking, and food packaging, is optimized for speed and efficiency.
Ghost kitchens have fewer chefs and no client-side staff like hostesses or servers. The physical space of ghost kitchen concepts vary. Ghost kitchens rely on equipment that provides more flexibility and versatility, to execute different menus and brands at the highest quality and consistency. Equipment such as a Vector oven or Combi oven, provide the flexibility to achieve multiple cooking applications and provide greater menu versatility. While a QuickChiller enables food to chill quickly on the prep side, holding equipment allows you to keep food hot when drivers are on their way to pick up the food. As an evolving model, the ghost kitchen allows you to create or expand your revenue streams when executed with the right equipment systems.
Using a Ghost Kitchen: Factors to Consider
As with any new venture, the ghost kitchen has its pros and cons. Consider the following as you decide if you want to expand your delivery program with a ghost kitchen.
Ghost kitchens avoid many of the expenses associated with opening a traditional restaurant. The start-up cost for a restaurant is, on average, $275,000, according to Restaurant Engine. Comparatively, one ghost kitchen restaurateur launched his business in a shared kitchen space for $20,000. The most successful ghost kitchens thrive by offering minimal menu options while dominating a specific food category, opening the door to craft menu items that not only travel well but also boost profit margins.
The delivery-focused model also saves you money because it requires less staff. With no actual face-to-face customer interaction, ghost kitchens eliminate the need for front-of-house staff and often function well with a few chefs. The reduced staff provides more predictability in scheduling and a maximized workflow, ultimately saving you time and money. Additionally, programmable equipment that cooks food more consistently can also reduce training and labor in the kitchen.
Reduced rent is another huge bonus in the ghost kitchen concept. Restaurant owners who utilize the pop-up model do not need to take on the additional expense of renting a new space. Shared kitchen models cost a fraction of the price of a standard rental space.
Not Reliant on Foot Traffic
It’s evident that location impacts a restaurant’s success. Delicious food is a must, but a steady stream of foot traffic can give a restaurant the extra boost it needs. However, when you focus only on takeout, the ghost kitchen model works whether the food is produced in a commissary or traditional kitchen. The key is excellent food and fast delivery.
High-Delivery Location is Important
With the focus on takeout orders, quickly meeting delivery demands is imperative. Ideally, your restaurant is within a three to five-mile delivery radius of your customers. Operating out of a low-rent shared space may save you cost on rent, but the surrounding area will be farther from dense areas where your customers live. Before you invest in a shared kitchen space, consider the driving distance between food production and high-traffic city centers.
When You Should Use a Ghost Kitchen Model
The ghost kitchen concept provides a unique opportunity to scale your business and corner your brand’s online market. It’s essential to carefully consider your situation before committing to a ghost kitchen model.
Ghost kitchens make the most financial sense for food truck owners, brick-and-mortar owners with excess kitchen space and unused staff, and well-established brands looking to dominate the delivery and virtual space. Alto-Shaam has proven success empowering brands and upstart kitchens to produce consistent, high-quality food at a high volume to meet ever-changing demands.
Talk to an Alto-Shaam expert today to receive design support for your next ghost kitchen project.