What is a Delivery Only Kitchen?
You may hear about a topic more in the coming years as the industry continues to change. It goes by many names but has one impactful purpose. If you haven’t heard of Delivery Only Kitchens, Ghost Restaurants, or Virtual Restaurants, you may want to learn more about this trending concept. The idea is simple but is executed in several different ways. In this article, we discuss what a delivery-only kitchen is, how they’re being implemented in the industry, and why business owners might use or start one.
A Delivery-Only Kitchen (or Ghost Restaurant) is a commercial kitchen located in a non-storefront building with the sole purpose of cooking food to be sent out for delivery. These businesses only take orders through a website or app and use their own– or third-party delivery services to distribute orders.
Why Do People Open or Use a Delivery Only Kitchen?
There are several reasons that this business concept is making its way throughout the foodservice industry. Ghost restaurants are being implemented especially in cities with dense populations due to the convenience and limited space for storefronts. Business owners are beginning to open and test their concepts with lower risk using a Ghost Restaurant. Restaurants have also begun to partner with third-party companies like Uber Eats and Postmates that have these kitchens set up in their home cities. There are several reasons to open or partner with a third-party delivery kitchen. Some of the main reasons are:
- Lower Rent Costs
With rent costs increasing every year, especially in cities, business owners are looking for non-traditional buildings to create these delivery kitchens. Spaces without a traditional storefront are typically less expensive or can be placed in less desirable locations to save on rent.
“Today the commissary concept lies at the heart of the ghost restaurant trend, helping entrepreneurs cut labor costs and rent real estate in an unassuming building rather than an expensive stretch with heavy foot traffic”. – Restaurant Dive
- Caters to the Experience of Patrons
There’s nothing worse to a customer than a bad experience while trying to enjoy their meal. That includes interruptions by delivery drivers that come in through the front entrance of your establishment. When deliveries are sourced from an entirely different location, it can save the headache of drivers coming in and out during meal service.
- Adapt to Changing Customer Needs
Customers are looking for quality food delivered conveniently to their doors. Delivery-only kitchens allow you to more easily prepare and deliver fresh food to these customers that don’t want to venture out of their homes to get delicious food. This type of kitchen allows you to dedicate your time, ingredients, and labor completely to delivery – Giving your customers the convenience that they want without sacrificing quality food.
“Restaurants can pay someone to make food exclusively for delivery — using delivery-focused food prep tactics that, say, keep food from getting soggy on the car or bike ride to the consumer’s house — without having to invest in the front-of-the-house costs required for in-house dining experiences. Or restaurants can lease commercial kitchen space for the same purpose. Think of those kitchens, as many operators and observers do, as factories for food meant only for delivery”. – PYMNTS.com
- Outlook is Positive
UBS Research performed a study on this business concept and suggests that Delivery-Only Kitchens will be huge in 2030. Customers are becoming more health-conscious and want delicious food with the convenience of delivery. This concept has been developing over the past few years and will continue to increase in popularity according to UBS.
- Easier to Scale
If you love to innovate and make changes to your menu or business, a delivery-only kitchen may be perfect for you. This business model allows you to add menu items and test them for a period before committing to them as a full-time menu item. It also allows you to test delivery in certain neighborhoods or sections of your city to see if they’re viable for permanent delivery service or even another storefront location.
- Adapt to Changes
The food service industry is constantly changing and evolving. A delivery-only kitchen allows you to adjust your business when food prices increase, customer tastes change, or when foods become popular. This adaptability of your business can give you the chance to quickly meet customer needs.
Why is Delivery So Popular?
In the age of technology and convenience, it makes sense that delivery has become so popular in the industry. There are several reasons that delivery has increased in demand recently. Some of these include:
- Want healthy meals without cooking
- On-the-go lifestyle
- Busy families want healthy meals
What If You Already Own a Restaurant?
Let’s say that you already have a storefront restaurant that serves customers. Why should you care about this delivery-only kitchen trend? This concept can act as a valuable extension to your existing business, giving you the chance to serve another valuable demographic of customers. Some of the main benefits of adding a delivery-only kitchen to your existing business are:
- Put your effort and resources toward both branches and increase your customer base.
- Help enhance the customer experience for dine-in and delivery by providing a quieter dining room and fresher food delivered in a shorter time.
- Test different menus and locations with less risk than opening another storefront.
If you’re committed to making delivery a strong point of your business, opening your own ghost restaurant might be for you. This should be treated like a business venture, where you carefully evaluate the costs and returns of opening a delivery-only kitchen. However, it has the potential to create a valuable segment of business for your existing restaurant.
More on Third-Party Delivery
You’re probably familiar with the third-party companies like UberEATS, Postmates, Door Dash, and Grub Hub that do delivery services for restaurants. However, the concept of partnering with a company that owns its own ghost kitchen and will deliver for you is new. Companies like Uber Eats and Postmates are testing the idea of cooking and delivering meals on behalf of a restaurant brand. While this idea is far from a failsafe concept, it’s something to consider looking out for if you live in larger cities like Los Angeles or Paris.
Read our article about Restaurant Delivery Services in our Resource Center for more information on using third-party delivery services!
Kelsey Moriarty is a Content Specialist at Central Restaurant Products. Her focus at Central is in the Food Prep and Furniture areas. Kelsey’s background is in technology and marketing with particular experience in SEO and E-Commerce. She enjoys helping customers make better decisions as well as working on her copywriting skills!