Pizza Today - April 2021 - 28

So, what is a ghost kitchen?
We've noticed three iterations of
virtual concepts. The first being a single
concept delivery-only operation. These
concepts are often referred to as ghost
because there is no customer-facing
component, often no signage, and
orders go through third-party delivery
services. The second is a cloud kitchen.
Think of this as a food production facility, often with several concepts operating in one kitchen. The third is when
an existing restaurant facilitates another
brand's ghost operation.
Operators are often attracted to the
ghost model for its lack of customerfacing financial investment such as
interior/exterior signage and costs
associated with a front-of-house
buildout and dine-in supplies; the
opportunity to outsource all ordering
and delivery operations to a third-party
provider, the ability to have multiple
concept types within one ghost kitchen
and opportunities to expand beyond
the restaurant's current market reach.
There are some inherent drawbacks to
a ghost operation including less control
over managing reputation, complaints
and reviews; added markup fees on
the customer side; added service fees
for operators side and less control over
customer data.

sic Crust Pizza in Phoenix, Arizona.
" Uber Eats reached out to us in 2019
when the concept of ghost kitchens was
rather in its infancy, " he says. " They had
the data and recommended to us that
we launch a wings concept. They even
had a list of recommended flavors based
on their users' search behavior. They
gave us the ability to launch a totally
new menu, with prices that account for
the revenue share up front. "
To look at Classic Crust, you
wouldn't notice that the pizzeria's kitchen also fulfills orders for WingSpot
AZ, or Burger Spot, which Geiger also
added. " They are additional restaurant
concepts that exist in the virtual realm,
and are primarily marketed on thirdparty marketplaces such as Grubhub,
Uber Eats and Postmates, " he says.
With a year of testing under his belt,
Geiger says, " We've been very successful
going virtual and are looking at ways of
expanding our virtual footprint. We're
considering opening a dedicated ghost
kitchen in a shared Cloud kitchens
facility. We're also exploring the possibility of offering WingSpot licenses to
other independent operators. "
Geiger has some advice for other
pizzeria operators as they explore this
revenue stream. " Be careful of licensing
deals that take big commissions, " he
says. " I've seen pitches from a halfdozen startups that are pitching various
virtual kitchen concepts, and most of
them are asking for 15- to 25-percent
revenue share. By the time you add in
the fees and food costs, you could end
up providing all the work and getting
less than half the revenue. "
With the buzz of ghost restaurants
during the pandemic, many operators
are asking is a cloud kitchen right for
my concept? The answer to this question will require you dive deep into your
business plan and overall concept goals.

Alex Geiger opted for the third
iteration. He isn't new to ghost operations. In November 2019, he ventured
into the launch of the virtual WingSpot
AZ, which operates out of his Clas-

Matt Vannini, a fourth-generation restaurateur and President of
Restaurant Accounting Services
Inc., a North American restaurant
consulting and accounting firm

Oath Pizza launched a ghost kitchen
in Philadelphia last October. " We are
thrilled to open our first-ever ghost
kitchen to offer safe and delicious contactless pick-up and delivery options to
residents of the Greater Philadelphia
area, " said Drew Kellogg, CEO in an
opening release. " This opening is one of
many unique ways we continue to pivot
during these changing times. We're
looking forward to opening additional
delivery-focused locations to best meet
the needs of our guests in the future. "

says the basis of a ghost kitchen can
be comparable to long ago established
pizza models. " The closest example
anyone had to a 'ghost kitchen' was
arguably Pizza Hut delivery only, "
he adds. " In the pizza space, that was
already a conscious decision years ago.
So, you were already there whether you
use a commissary or whether you use a
delivery-only model. "
Vannini's firm works with nearly
2,000 restaurants, including a variety of
pizza concepts. He points to several key
areas that a ghost kitchen must have to
be successful. " You need a residential
infrastructure, " he says. " You need to be
able to get product to people in a mass
rate. "
He sees many cases where ghost
operations are going in up-and-coming
urban areas that lack the residential
infrastructure. Contrary to traditional
restaurant kitchens, Vannini warns that
in ghost kitchens labor costs may come
at a premium as the work is more food
production based.
While Vannini doesn't recommend
a ghost operation as a viable option for
a new brand, he does see it as an area
of opportunity in brand expansion. " I
see it as viable because it is under our
control. We're not trying to build a
new brand there or inform a new brand
there, we are trying to reaffirm the
brand. "
During the pandemic Vannini has
seen closed restaurants or catering
spaces lease out to ghost operations.
" Brilliant, take your overhead and give
it to someone else who doesn't have a
footprint, " he says. " That is just a private version of a cloud kitchen. "
It's difficult to predict what kind of
impact virtual restaurants will have on
traditional pizzeria models. The momentum of off-premise sales continues
to skyrocket with all indications that
virtual restaurants will continue to rise
even after the pandemic subsides. n
DENISE GREER is the Excecutive
Editor of Pizza Today.

2 8 / P I Z Z AT O D AY. C O M / A P R I L 2 0 2 1 	

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Pizza Today - April 2021

Table of Contents for the Digital Edition of Pizza Today - April 2021

Pizza Today April 2021
Commentary
Digital
Conversation
Mike's Monthly Tip
Man on the Street
Building Blocks
Tony's Trending Recipe
Knead to Know
Destinations
Ghost Kitchens
New Item Roll Out
Private Labeling
Outdoor Dining Setup
The New York Style
Going Pesto
Latest menu Trends
Product Showcase
Pizza Today Yellow Pages
The Marketplace
Expo Spotlight
Pizza Today - April 2021 - CT1
Pizza Today - April 2021 - CT2
Pizza Today - April 2021 - Pizza Today April 2021
Pizza Today - April 2021 - Cover2
Pizza Today - April 2021 - Commentary
Pizza Today - April 2021 - 4
Pizza Today - April 2021 - 5
Pizza Today - April 2021 - 6
Pizza Today - April 2021 - 7
Pizza Today - April 2021 - Digital
Pizza Today - April 2021 - 9
Pizza Today - April 2021 - Conversation
Pizza Today - April 2021 - 11
Pizza Today - April 2021 - Mike's Monthly Tip
Pizza Today - April 2021 - 13
Pizza Today - April 2021 - Man on the Street
Pizza Today - April 2021 - 15
Pizza Today - April 2021 - Building Blocks
Pizza Today - April 2021 - 17
Pizza Today - April 2021 - Tony's Trending Recipe
Pizza Today - April 2021 - 19
Pizza Today - April 2021 - Knead to Know
Pizza Today - April 2021 - 21
Pizza Today - April 2021 - 22
Pizza Today - April 2021 - 23
Pizza Today - April 2021 - Destinations
Pizza Today - April 2021 - 25
Pizza Today - April 2021 - Ghost Kitchens
Pizza Today - April 2021 - 27
Pizza Today - April 2021 - 28
Pizza Today - April 2021 - 29
Pizza Today - April 2021 - New Item Roll Out
Pizza Today - April 2021 - 31
Pizza Today - April 2021 - 32
Pizza Today - April 2021 - 35
Pizza Today - April 2021 - Private Labeling
Pizza Today - April 2021 - PEC1
Pizza Today - April 2021 - PE2
Pizza Today - April 2021 - PE3
Pizza Today - April 2021 - PE4
Pizza Today - April 2021 - PE5
Pizza Today - April 2021 - PE6
Pizza Today - April 2021 - PE7
Pizza Today - April 2021 - PE8
Pizza Today - April 2021 - PE9
Pizza Today - April 2021 - PE10
Pizza Today - April 2021 - PE11
Pizza Today - April 2021 - PE12
Pizza Today - April 2021 - PE13
Pizza Today - April 2021 - PE14
Pizza Today - April 2021 - PE15
Pizza Today - April 2021 - PE16
Pizza Today - April 2021 - 35
Pizza Today - April 2021 - Outdoor Dining Setup
Pizza Today - April 2021 - 37
Pizza Today - April 2021 - 38
Pizza Today - April 2021 - 39
Pizza Today - April 2021 - 40
Pizza Today - April 2021 - 41
Pizza Today - April 2021 - The New York Style
Pizza Today - April 2021 - 43
Pizza Today - April 2021 - Going Pesto
Pizza Today - April 2021 - 45
Pizza Today - April 2021 - Latest menu Trends
Pizza Today - April 2021 - 47
Pizza Today - April 2021 - 48
Pizza Today - April 2021 - 49
Pizza Today - April 2021 - Product Showcase
Pizza Today - April 2021 - 51
Pizza Today - April 2021 - Pizza Today Yellow Pages
Pizza Today - April 2021 - 53
Pizza Today - April 2021 - 54
Pizza Today - April 2021 - 55
Pizza Today - April 2021 - 56
Pizza Today - April 2021 - 57
Pizza Today - April 2021 - The Marketplace
Pizza Today - April 2021 - 59
Pizza Today - April 2021 - 60
Pizza Today - April 2021 - 61
Pizza Today - April 2021 - 62
Pizza Today - April 2021 - 63
Pizza Today - April 2021 - 64
Pizza Today - April 2021 - 65
Pizza Today - April 2021 - Expo Spotlight
Pizza Today - April 2021 - Cover3
Pizza Today - April 2021 - Cover4
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