Pizza Today -April2023 - 27

The post-pandemic boom of indoor
dining may have slowed the pace of
the volume of ghost kitchen openings.
You're hearing less about the
trend in restaurant news. Were ghost
kitchens a fad or temporary solution
to the pandemic? The short answer is
no. The ghost model was increasing its
frequency even before 2020. But the
market forecast has changed and it's
growing at a sustaining pace. Though
projections vary. The Global Cloud
Kitchen Market is at $31.90 billion
in 2022 and is anticipated to reach
$117.89 billion by 2031, according to
a new report from Astute Analytics.
While ResearchandMarkets's
November 2022 release points to
$58.13 billion in 2022 and is expected
to grow to $89.5 billion in 2026.
We may have seen this trajectory
before. Could ghost kitchens be
following the fast-casual concepts rise?
Fast-casual pizzerias came in red hot
on the scene. The concepts that have
perfected the segment and learned
how to fit into the restaurant industry
landscape are still thriving and growing.
There have been business casualties
along the way as the fast-casual
pizza segment crossed the decade
mark. Amidst the current turbulent
restaurant climate, we have already
seen some cautionary ghost and virtual
kitchen failures, but success stories are
abound too with models like CloudKitchens
and Reef Kitchens.
Chuck E. Cheese may be the most
well-known ghost kitchen case study
in the pizzeria industry. The pizza and
entertainment company was among
the restaurant concepts hit the hardest
by the pandemic's indoor dining
shutdown. Parent company CEC
Entertainment Inc. launched the
delivery-only virtual Pasqually's Pizza
& Wings in spring of 2020. Today the
company website notes more than 450
ghost locations nationwide with online
ordering available through its site and
third-party delivery partners.
Ghost Ops
Ghost and virtual kitchens have
their benefits. They come with lower
start-up and operational costs, as well
as typically lower labor cost through
the use of automation technology.
This provides established concepts
the ability to gain a foothold in a new
market and startups the chance to test
concepts within given markets without
the high overhead costs of a traditional
brick and mortar. Just like any
other restaurant businesses, they also
have their drawbacks. Since ghosts are
delivery only, they tend to carry high
delivery service fees. Gaining marketing
traction can also be a challenge,
especially with customer loyalty. With
multiple platforms delivering the product,
there can be inconsistency with
the customer experience.
To be successful in the ghost landscape,
do your homework and get laser
focused on the business planning just
as you would a traditional restaurant.
Let's take a look at some ghost operation
logistics if you are considering
adding a ghost or virtual kitchen to
your concepts.
First, there are three common forms
of ghost operations. They are:
* 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 thirdparty
delivery services.
* Shared Kitchen. Think of this
as a food production facility, often
with several concepts operating in one
kitchen or building. We've seen this
model used in another form as joint
commissary kitchens. They can also be
referred to a virtual food halls.
* Virtual Kitchen. A virtual kitchen
operates in an existing restaurant
facility with a different brand that is
delivery-only. This is the most common
for established restaurants who want
to enter the ghost market and test a
different product or a certain menu
product as a stand-alone business.
There are several things you should
know before you dive into starting up
a ghost kitchen. Here are just some the
logistics you'll need to nail down to
succeed as a ghost operation.
Select a menu that can thrive in a
delivery-only format. When deciding
on a menu, selecting items that hold
and delivery well. You also may want
to focus only high margin items.
Know your market. Customer
insights are vital. Do the market
research and find the right customer
demographic for the new ghost brand.
Location. Location. Location. Even
though it's a ghost operator, location is
important to being in the right delivery
zone for the customers you want to
attract. Whether you are setting it up
in a shared environment or in an existing
restaurant, evaluate if the location
is optimal for the specific products you
want sell in the ghost environment.
Obtain all proper permits, licenses
and follow all health and safety
requirements. This is no different than
your current restaurant. You must contact
local and state entities to operate a
ghost kitchen. Processes and rules vary
by states and localities.
Make the right delivery decisions for
you. Some operations have their own
delivery program and others use thirdparty
or both. A majority select to only
delivery through third-party delivery
platforms. Research and find the right
delivery partners for your business.
Focus on your labor estimates. What is
it going to take to staff your ghost operation
efficiently and effectively? For those
considering a virtual concept in an existing
restaurant, ydon't simply tack the
ghost operation onto your existing team.
Run the numbers and staff it properly.
Factor in supply chain and inventory.
While a single-unit ghost kitchen
may not have to worry about inventory
as much, shared kitchens and virtual
concepts have to consider how much
product can be ordered and stored.
This can directly impact your bottom
line with supplier bulk pricing.
DENISE GREER is the Executive Editor of
Pizza Today.
APRIL 2023 / PIZZATODAY.COM / 27
http://www.PIZZATODAY.COM
Pizza Today -April2023

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