Trend Alert: The Rise of Dark Kitchens
Today’s diners expect a high-quality guest experience every time, even when they aren’t eating inside your restaurant. According to a McKinsey article, online delivery will grow 15 percent per year until 2020. Restaurants responded to this fast-moving market by offering delivery and to-go services at their establishments. Over the past year, we’ve seen many operators try, test and perfect delivery to keep up with the needs of consumers.
In a highly competitive market, restaurants are looking for different ways to stand out as they continue to feed an on-demand culture. What’s the new path to off-premise dining and delivery? Dark kitchens.
What is a Dark Kitchen?
Dark kitchens, also known as virtual restaurants, are kitchen-only concepts that process and produce orders for delivery. There are no tables, chairs, servers, hosts, or storefront. The food is only accessible online or through a mobile app and delivered to the guest’s location. These new concepts are slowly emerging, as a way for companies to boost business while minimizing their operational footprint. Since there is no brick and mortar, dark kitchens can be flexible with their menu offering and adapt to consumer taste as new trends happen.
Why Open a Dark Kitchen?
Why are dark kitchens appealing? What can dark kitchens do that restaurants can’t?
Dark kitchens dramatically decrease a restaurant’s operational footprint and the costs of running a traditional restaurant. Without a storefront, an investment in a virtual restaurant is small. Not only is rent slashed, but there are also no costs for décor, marketing, signage, dinnerware, servers or hosts – just because you don’t need them. The kitchen is the main space where your investment goes so depending on your budget; you can opt for some specialized equipment and technology.
More is More
Since dark kitchens are typically unbranded, you can operate multiple concepts out of the same kitchen increasing your overall revenue opportunities. You can easily create a new concept based on what’s trending, like hot-fried chicken. Without typical investment costs since you can share the same ingredients and equipment from your other brands. A few years ago, Green Summit Group, a New York startup, launched nine virtual restaurants operating out of one kitchen and fulfilling orders through GrubHub. The goal is to be able to grow virtual brands into meaningful experiences for diners.
Attract New Customers
Dark kitchens can help you attract a different type of diner than what a traditional restaurant would bring in. Fueled by convenience, these guests are focused on food quality and how quickly it can get to their front door. This allows operators to zero in on things like ingredients, food preparation and cook times, packaging, and delivery logistics rather than focusing on whether or not your bathrooms are clean. Virtual restaurants cater to a wider audience with a strong online presence and the instant gratification of ordering their lunch with the touch of a button.
Who’s Creating These Virtual Restaurants?
The business model for dark kitchens can look different from one another. There are many variations between who is running the kitchen, where to fulfill orders, where customers connect and who has control of the orders. Here are a few examples:
- DoorDash launched commissary kitchens for traditional restaurateurs to experiment with new concepts without the risks of a storefront. These concepts are exclusive to DoorDash, who will deliver the food from the commissary kitchen, and base rent on a percentage of gross sales.
- UberEats has more than 1,600 virtual restaurants in the world, according to Eater. They focus on using kitchens from restaurants that have existing storefronts and create a delivery-only concept only in UberEats. For example, in Dallas, a small sushi chain called SushiYaa operates five brick-and-mortar restaurants — but those restaurants house around two dozen virtual restaurants with names like Bento Box, Poke Station, and Mandu Dumpling House, serving entirely separate menus and dishes that are only available for delivery through Uber Eats.
- Brands like Chick-fil-A are testing delivery-only concepts where the storefront will have no drive-thru, no dining room and will not accept cash. Chick-fil-A’s dark kitchen is designed to be a hub for catering and delivery orders which come from the web. Unlike the other examples, consumers can order delivery through Chick-fil-A’s branded app and their delivery partner DoorDash, allowing the brand more control. By removing delivery and catering orders out of dine-in locations, Chick-fil-A can focus on providing convivence and quality to diners who want the option for both.
What’s Next for Dark Kitchens?
Delivery and dark kitchens will continue to surge over the next few years. Not only will more independent restaurants create a dark kitchen, but we also think larger brands will invest into their variation of a virtual kitchen, as a way to out-source delivery orders and focus on the dine-in customers.
Dark kitchens, ghost kitchens, virtual restaurants – whatever you want to call them – allow restaurants to operate without any high overhead, adapt to trends, and meet customer’s demands, right where they are.
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About the Author
Chrisea Chosta is QSR’s Product Marketing Manager. Chrisea graduated from Western Kentucky University and works to launch new product initiatives and develops product resources. In her spare time, you can find her spending time with family, her chocolate and black labs, and aimlessly walking down every aisle of Target.