Does the ghost kitchen model suit your business?

Everyone’s talking about the advantages of ghost kitchens—purpose-built production units, also known as dark kitchens or virtual kitchens, that use data to optimize delivery. 

They allow businesses to avoid front-of-house overheads, reducing costs while increasing revenue by reaching new off-premise customers.

If you’re asking yourself, “What is a ghost kitchen?” here’s some reading for you.

But every food business is different. The big question needs to be answered: Is the ghost kitchen model right for your business? 

The answer will depend on the dark kitchen business model you decide to operate with and on your personality as a business owner. 

So, let’s look at who might be thinking about starting a ghost kitchen. We’ll cover how well a ghost kitchen is suited to each profile and what to consider if you find yourself in one of these categories as an entrepreneur hungry for success.

Who should consider the ghost kitchen model?

Ghost kitchens have numerous advantages over conventional restaurants, but that doesn’t mean they’re right for everyone. 

Overall, it would be best if you asked yourself a few questions: 

• Are you ready to invest in the latest kitchen and delivery tech? 

• Are you more interested in pouring over data than face-to-face customer interactions? 

• Are you obsessed with data-driven optimization? 

If the answer to all these questions is yes, there’s a good chance you’ll get on well with the ghost kitchen model. But before you jump in, here are some considerations for different business owners looking to move into this exciting new space.

The rookie restaurateur bootstrapping a business 

The ghost kitchen model appeals to those strapped for cash and want to open a low-risk business with minimal overheads. 

Ghost kitchens avoid the costs of front-of-house staff and dining space and can operate with lower marketing spending andsetup costs than traditional restaurants. 

But are they the right model to start with? You are competing against the delivery-focused chains that have been optimizing for years. And starting from scratch, you have no customer base or reputation to give you an initial boost.

The ghost kitchen model can provide a platform for newbies with a lower barrier to entry. It could make sense if you are focused on building a brand without the outlay of a brick-and-mortar outlet. 

But you should also consider that investing in kitchen tech, order management equipment, menu optimization, and the right team will massively improve your chances of success in the competitive delivery market. So, you should be wary of trying to do it on too tight a budget.

The independent restaurant adding a virtual brand

With more people than ever ordering food to go, many restaurants have found off-premise orders outstripping dine-in customers. Many have turned to the ghost kitchen model to make the most of this change in consumer preferences. 

Rather than starting a separate ghost kitchen, these enterprising souls leverage existing kitchen space to launch delivery-only concepts from their brick-and-mortar restaurants. These virtual restaurants could offer a spin-off from their regular dine-in menu or could be completely new concepts created to satisfy specific customer demand.

This model is a relatively low-cost way to adapt and take advantage of the ghost kitchen concept without looking for an entirely new kitchen. Make the most of your existing resources and keep staff busy at quiet times.

However, it also carries the risk of diluting your dine-in experience. One reason for setting up a ghost kitchen is to maximize efficiency. You won’t get this benefit if your kitchen is not optimized for serving dine-in and delivery customers.

The food truck operator looking to scale

A food truck's advantage is that it has a self-contained kitchen on wheels. This means you have everything you need to prepare and serve your food, and you can go wherever the customers are. 

In reality, the model has limitations. Space is at a premium, good locations are hard to come by, insurance can be complex and expensive, and business is badly affected by the weather and other uncontrollable factors.

So, food truck operators may be looking to scale up and use a ghost kitchen to either centralize aspects of production or expand and reach more customers. This could be a great option, especially if you have money to invest and a strong brand to build upon.

The restaurant group moving into off-premise dining

If you run a successful restaurant group with many popular concepts in a particular city or area, you might consider a ghost kitchen to make the most of off-premise orders. Not only can it serve as a central production kitchen, but it can also be purpose-built for takeaway and delivery orders. 

A ghost kitchen could enable you to reach more customers outside the catchment area of your restaurants. This could increase the efficiency of production for the whole group while also offering new opportunities for revenue generation. 

This means more people can try your restaurants, paving the way for exponential growth.

The restaurant chain improving efficiency at scale

When you’re operating restaurant brands across nations and even globally, every inch of space, every second lost, and every ounce of efficiency makes a huge difference. More and more restaurant chains have been turning to some form of ghost kitchen to improve efficiency and cut overheads where possible. 

Restaurant chains have the big data to pinpoint the demand in different areas and cities. They can analyze the numbers and see exactly where a ghost kitchen makes sense over a traditional brick-and-mortar restaurant or where a central production kitchen is the best option to serve nearby locations while also producing meals for delivery.

Reports that chains are using ghost kitchens to recoup lost revenue from the pandemic demonstrate the model's value. Having switched to the model, many restaurant chains will continue to leverage it to maximize efficiency at each location. 

The FMCG or enterprise brand fine-tuning global operations

FMCG and global enterprise brands have an even deeper need for consistency and efficiency in getting their products out to customers worldwide. You might be surprised at the use cases for the ghost kitchen model for these food industry behemoths.

Ghost kitchens can be used to take control of product storage and distribution in areas where local stores are a weak link in the supply chain.

Unilever’s partnership with Deliverect is a great example. After issues storing its Ben & Jerry’s ice cream at local stores, the global brand implemented a ghost kitchen model using cold cabinets to ensure the product was delivered on time and intact, using Deliverect’s integrations with Deliveroo and Uber Eats.

Read about how Unilever uses Deliverect to efficiently deliver Ben & Jerry’s ice cream globally. 

The digital marketing guru moving into the food business

With technology so important to the modern restaurant business, entrepreneurs are entering the industry from a purely tech-driven perspective. With so much data available from delivery providers and online searches, it’s an attractive prospect for techy data heads.

Those with a keen eye for analyzing the numbers relish the opportunity to quickly create virtual brands based on the demand in a certain area. The ghost kitchen model allows you to pivot quickly if demand changes and even create seasonal restaurants at different times of the year. It also offers huge opportunities to optimize your delivery operations. 

The only caution here would be to not underestimate the rigors of the restaurant business. For any techies looking to break into the food and beverage industry, you’d be wise to get an experienced chef or restaurateur on board to deal with the real-world challenges of running a busy kitchen.

The celebrity chef branching out 

On the other hand, ghost kitchens are also attractive to big-name chefs who want to make the most of their 15 minutes of fame. 

Whether you’re a local chef who made your name with a popular neighborhood joint in town, or even a national TV chef opening a new line in your growing empire, you’d be wise to partner with one of the tech-savvy data heads described in the previous section so you can each concentrate on what you do best.

A ghost kitchen perfectly suits this hands-on food industry experience paired with data-driven tech know-how.

Boost your off-premise efficiency whether or not a ghost kitchen is for you

A ghost kitchen could be a great way to capitalize on the trend for off-premise dining. But even if it’s not right for you, you can still boost your efficiency regarding takeaway and delivery orders. 

Deliverect helps businesses take advantage of the huge demand for delivery and takeaway that has swept the industry. It aggregates orders from all the major delivery platforms and has many features to make order handling more efficient. 

Like menu management for all your platforms from one dashboard. And automatically syncing sending orders to your POS so your team doesn’t have to re-punch orders. 

Find out how Deliverect has helped businesses like yours take control of delivery, boosting efficiency and growing revenue.