2020 was a heartbreaking and terrifying period for hoteliers and restauranteurs around the world. The COVID-19 pandemic brought about a sudden wave of business closures, and restaurants were the most hit. People could no longer enjoy regular hotel services due to safety restrictions, so restaurant owners had to re-evaluate their operational models. Even though ghost kitchens had already started becoming a trend, the pandemic made them a necessity for entrepreneurs that still hoped to remain in business.
The digital revolution has made it to the hotel industry. With more people warming up to ordering in, it's no surprise that the online food delivery sector is expected to be worth a whopping $94 billion by 2024. Included in this developing sector is the ghost kitchen. But what exactly is it? How are micro-cloud kitchens developed? Should you integrate them into your business model? Here's the ultimate guide to ghost kitchens in 2021!
Ghost kitchens are also referred to as micro-cloud kitchens or virtual kitchens. They refer to restaurants that don't offer dine-in services. They are built to fulfil online orders, hence their menus are only available to customers that require delivery. Think of it as a co-working space. There are no tables or walk-in customers. You just rent a space, create a menu and start selling your food to online customers through third-party delivery apps.
Previously, ghost kitchens were mainly being used by virtual restaurants, however after the pandemic forced restaurant owners to cut down on operations or shut down, more chain restaurants have started adopting the concept. Some popular restaurants are toying with the idea of branching out into virtual kitchens, whereas others like Chick-fil-a have already embraced it.
Ghost kitchens are based on the fundamental shift in consumer behavior that all restaurants have been experiencing; they reduce the costs associated with dine-in restaurants by capitalizing on the increase in online orders.
The beauty of ghost kitchens is that you're in control of most of the operational aspects other than delivery. You don't have to be located in a busy location, you don't have to employ wait staff and you can easily customize your menu so that it only focuses on food that is delivery-friendly.
You, however, have to create effective workflows and invest in quality packaging, which is a small price to pay.
Currently, there are 3 main types of ghost kitchens:
Some of the reasons why ghost kitchens are blowing up include:
Since there are no dine-in customers, your overhead costs are significantly low. For instance, you don't have to buy tables, chairs or decorative elements. You also don't need wait staff or extra floor space, so operations are lean.
You only have to ensure that you meet the health standards of the Department of Health and that your permits are up to date. This gives you more time to work on your menu and streamline your delivery services.
Generally, restaurant startup costs are extremely high. In addition to renting, furnishing and decorating your premises, you also have to buy kitchen equipment and hire employees. All these expenses combined can cripple your finances, especially now that the economy is just opening up.
Since you already have a restaurant, you won't have to incur any additional costs. You can use your existing equipment and split operations between your physical and virtual restaurants. For instance, even though customers can now have meals in restaurants, many of them are opting to order in. This means that operations still aren't optimal. Instead of letting some staff go, you can ask them to be part of the virtual kitchen. This way, you'll be able to run both business models with ease.
Ghost kitchens allow you to focus on your restaurant's core objective. Trying to cater to both in-person and online orders using the same model will only leave you overwhelmed. If some of your staff are dedicated to online orders while others tend to your customers, you'll be able to optimize your operations.
Restaurants are often very busy, and if you're using one chef for your dine-in and online orders, the staff may end up plating meals meant for delivery. By integrating a ghost kitchen, staff will be able to focus on their area of specialization. There will also be fewer people in the kitchen area so your dine-in team can focus on delivering exceptional services to your customers.
The dynamics of running a restaurant are changing and ghost kitchens help you reach an untapped market audience. With brick-and-mortar restaurants, you have to provide your services within your physical location. This means that on days when the foot traffic is low, your revenue is also low.
Ghost restaurants, on the other hand, give you access to a wider audience, including those that are far away from your premises. All you need is a streamlined delivery system and you'll be able to increase your market share within a short time.
The food delivery market revenue has increased by more than 200% within the last 5 years. Consumer preferences are changing, more people are leaning towards ordering-in due to the high levels of convenience it offers. By adopting a ghost kitchen model, you're able to keep up with modern delivery demands. This increases your revenue streams and enhances your agility.
Ghost kitchens give you full control over your menu. You have the flexibility to change your cuisine instantly and you can test out various food options before settling on a particular category.
With brick-and-mortar restaurants, changing your cuisine means that you have to print other menus and let your customers know in advance. You also have to update your signage boards. With ghost kitchens, you simply change your restaurant's description on the app.
Once you've identified your preferred food category, you can then focus on perfecting your recipes so as to enhance your market dominance.
If you're certain that ghost kitchens are the best way to increase your revenue streams, here are a few tips to get you started.
Yes! Ghost kitchens are undoubtedly the future. More people are using food delivery services, so it's wise to keep up with the current consumer trends. The recent pandemic is also enough proof that the business world is uncertain, and you shouldn't put all your eggs in one basket.
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