Dealing with dark kitchens- The lighthouse of food delivery industry

“Never before have the lights gone out at so many independent restaurants in such a short span of time. But somewhere in there may be an opportunity for many to bring their kitchens back to life — in the dark.”

There’s no question about the fact that increasing number of restaurants, of all sizes- small medium and large, have embraced the coming to the forefront of dark kitchens whole heartedly specially during the covid-19 pandemic. To put a statistic by Technomic data in perspective, the number of eateries using the concept of ghost kitchens grew from a meagre 15 percent in the pre-pandemic period to a whopping 51 percent in May.

Since then, as the trend continues to be, there are chances that it may be having a ripple effect on the industry. Yes! You read that right. Over the past few years, third-party food delivery software and ghost kitchen platforms serving independent restaurants and culinary entrepreneurs have grown — and are growing — substantially.

Such has been the growth of dark kitchens over the recent years that not just plenty of small operators and individual entrepreneurs are turning to dark kitchens to survive, but some major chains are entering the space to open up another revenue stream or expand into new markets at a reduced cost. A case in point over here is that of the grocery giant ‘Kroger’ which, as per the company announcement, is converting 1,200 square feet of space in two of its stores to ‘dark kitchens.’

Kroger and ClusterTruck, a meal-delivery start-up collaborating on the initiative, said that its dark-cum-ghost kitchens will have a menu of more than 80 meals and a preparation-to-delivery turnaround of seven minutes, and an order-to-delivery time of 30 minutes, on average. Isn’t it overwhelming and worth considering an option? It, certainly is. Dark kitchens have just turned out to be the savior for several restaurateurs and are perhaps nothing less than the light at the end of the tunnel that many food businesses are anxiously looking for.

The grocery giant Kroger in the following announcement said it has launched the concept at its Fishers, Indiana location and will soon launch a second at its Dublin, Ohio store later this year.

Looking at the overwhelming pace of growth of dark kitchens one thing that can be established for sure is that they are spreading across various country markets like wildfire. As much as the craze for food delivery goes up, food delivery software and apps would increasingly become an essential part of business and consumer’ lives. This, for sure is going to build a foundation for more dark kitchens to come up and in front.

Isn’t it heartening to note that the United States’ largest supermarket chain ‘Krogers’ is opening 'dark' kitchens inside some of its stores to meet surging demand for food delivery? Indeed, it is.

Covid-19 and the growth of dark kitchens

There is little skepticism about the fact that year 2020 was a heart breaking and terrifying period for restauranteurs, food entrepreneurs and stand lone food businesses around the world. The COVID-19 pandemic brought about a sudden wave of business closures, and restaurants were the most hit. People could no longer enjoy regular hotel services due to safety restrictions, so restaurant owners had to re-evaluate their operational models. Even though ghost kitchens had already started becoming a trend by then, the pandemic made them a necessity for culinary entrepreneurs that still hoped to remain in business. In there, they saw a ray of light.

The digital revolution has made it to the hotel industry. With more people warming up to ordering in, it's no surprise that the online food delivery sector is expected to be worth a whopping $94 billion by 2024. Included in this developing sector is the phenomenon of ghost kitchen. They are becoming a furor among businesses and consumers alike, especially with both of them home contained with little or absolutely no options to move out back then. Now as the covid-19 fears gradually wane, customers and businesses by their wilful choice are not wanting to move away from dark kitchens- of course, both being satisfied with mutual gains and derived convenience out of the presence of dark kitchens.

But should you integrate dark kitchens into your business model? Or are they worth establishing in today’s competitive food delivery times?

Establishing dark kitchens is the latest move from food businesses and culinary entrepreneurs looking to reach out to large number of customers. This concept gained pace during the lockdown period of covid-19 where customers witnessed a phenomenal shift in the way they ordered and ate food. To meet the changing food ordering habits, businesses had to come up with novel ideas, one of which was to give a green signal to the establishment of ghost kitchens- a place for preparing the meal in order to meet the instant and evolving delivery needs of the contemporary customers. Since then, the idea of ghost kitchens has just about hung around with the businesses of today.

"Ghost kitchens" and "dark stores" have captured the imaginations of businesses from Wendy's to Sweetgreen to Chik-fil-A. Pre-pandemic, the option gained traction among vendors looking to boost delivery revenue and jettison customer-facing infrastructure. Mid-pandemic, the business model has become even more attractive. With covid fears gradually mellowing, dark kitchens are still standing strong and acting as a beacon of light for several food businesses.

What’s more to the interest of the restaurateurs and culinary people? Just around two years ago, Burger King released a redesign of its restaurant that shrinks dining space in lieu of take-out cubbies and greater space for drive through and curbside pick-up options.

It is no doubt that thinking about jumping into a ghost kitchen may seem like a way to recoup lost dining room sales during the pandemic, but businesses and entrepreneurs need to consider food costs, labour costs and marketing and brand equity to help ensure a payoff.

Dark kitchens- The way ahead

Consumers, both young and old ones, and businesses, both well established and new ones, are going ga-ga over the coming into being of dark kitchens. As the craze grows, dark kitchens are just going to better the sales figures and achieve ameliorated growth milestones. A report published by Euromonitor asserts that- the ghost kitchen segment could create a $1 trillion global opportunity by 2030.

The craze for food deliveries is expectedly going to get bigger over the coming years- and dark kitchens in this race, are not going to hold themselves back. Not just that the consumers are reaping great convenience out of them, but as delivery becomes less expensive and ghost kitchens grow and become more centralized, reducing food delivery times in the process, restaurants could find financial gains in optimizing their business for off-premise rather than dine-in experience.

Conclusion

Delivery used to be a differentiator largely for just pizza and Chinese restaurants, but growing diner demand for speed and convenience throughout the past few years has necessitated the adoption of delivery throughout the industry. This has led to the rise of dark kitchens- spaces that prepare large amounts of meals to meet the growing food delivery demands. And why they should not they be doing it? After all, people are just loving to sit at home and order food from their favorite restaurants.

With competition in the food delivery industry intensifying, restaurateurs, dark kitchens and culinary entrepreneurs are just finding out innovative and quicker ways of reaching to the consumers. They are doing so by adopting on to the most impeccable food delivery software and apps present around. This enables them to come to the forefront and exhibit as to what they are capable of doing- in terms of preparing food meals, getting it delivered instantly and conveniently, and making their business go prosperous, while the ravenous consumers satiate their hunger.

With food deliveries having gained a stronghold in today's industry of ravenous consumers, dark kitchens are surely the beacon of light that can take businesses to unfathomable heights.

How ready is your business to adopt one such model?