Throughout the country, ghost kitchens are a relatively new concept growing in popularity. By using a ghost kitchen, a restaurant owner may be able to take advantage of the food delivery market, while simultaneously increasing the utilization of their staff, restaurant space, and supplies.
A ghost kitchen is a restaurant that does not have a physical location that customers can visit. Instead, ghost kitchens can only be reached by ordering online for takeout or delivery. Both existing restaurants and budding restauranteurs can use a ghost kitchen to increase profitability, particularly during the pandemic.
If you are interested in starting a ghost kitchen, read on to learn more about what they are – and whether it makes sense for you to take on this type of project. If you decide to take the plunge, reach out to Budget Branders for custom branded disposable products to help your business increase brand recognition and sales.
Ghost Kitchens, Virtual Brands, and More: What You Need to Know
If you click on Uber Eats, Door Dash, or another food delivery app, you may have noticed something unusual: restaurants that you’ve never heard of offering delivery options. These restaurants are part of a relatively new phenomenon known as ghost kitchens.
A ghost kitchen is essentially a restaurant without a brick-and-mortar location that only offers delivery or take-out. Ghost kitchens produce virtual brands, which is exactly what it sounds like: a brand that is only available online or through apps. In other words, it is a restaurant that you can’t visit – but you can order its food online.
A ghost kitchen (or virtual restaurant) can be run in several ways. A restaurant owner may rent a remote space to handle delivery and takeout orders, or they use their own space to run a different restaurant concept – virtually. Alternatively, a skilled home cook or chef without their own restaurant space may rent out space at an existing restaurant to run their ghost kitchen.
For example, in Chicago, Tony Scardino runs Professor Pizza out of the Full Shilling Public House. After helping the owner create a pizza for the restaurant, he asked if he could use its kitchen as a base for his ghost kitchen, Professor Pizza. This arrangement allows him to use an existing kitchen to capitalize on a growing market for takeout and delivery.
Ghost kitchens can be a great way to increase revenue, particularly during the COVID-19 pandemic, where profit margins are tight and restaurants rely more than ever on takeout and delivery. It also allows budding entrepreneurs to get a foot into the restaurant industry, without taking on the expense of opening up their own space to welcome customers.
What Are the Benefits of Running a Ghost Kitchen?
Even before the pandemic, there was a growing market for food delivery. With shelter-in-place orders and limits on in-person dining, 2020 saw a spike in the demand for delivery. By November, 35% of Americans had ordered from a delivery service – compared to 27% in 2019.
While food delivery apps are incredibly popular, most restaurants actually lose money on them. Ghost kitchens are a way for restaurants to stay profitable – by slashing labor and other overhead costs, they can maximize their return from being available on apps like Uber Eats and Door Dash.
Whether you are already running a restaurant or are just thinking of getting into the business, there are a number of benefits of opening a ghost kitchen, including:
- The ability to use existing staff for your ghost kitchen;
- Using parts of your business that are currently underutilized for storage, prep, and cooking;
- Gaining revenue;
- Opening a restaurant without the overhead labor and physical space costs;
- Minimal start-up costs;
- Testing out a new concept; and
- Getting the full value out of your inventory.
For example, if you run a burger restaurant, chances are good that you order a lot of certain products, like ground meat, cheese, lettuce, and tomatoes. Using that same inventory and your same kitchen and staff, you could open up a ghost kitchen that offers tacos. In this way, you can grow your business without spending a lot of money.
Of course, there are drawbacks to running a ghost kitchen. If you are using existing staff, they may get burnt out by having to run two restaurants out of the same kitchen. If you aren’t already a restaurant owner, you may also face challenges getting people to take a chance on an unknown entity or building customer loyalty.
Whatever you decide, one thing is clear: ghost restaurants are here to stay. With rising costs in the restaurant industry and an uncertain future, offering a virtual brand may be a great way to keep your business going – and to maximize the investment that you already made into your space.
Boost Your Ghost Kitchen’s Visibility with Custom Disposables
One of the challenges facing many ghost kitchens is that customers typically don’t recognize them in the same way that they acknowledge established restaurants. One way to build your ghost kitchen’s brand is by using custom disposables. After all, your customers won’t be walking into a physical restaurant – but they will remember the paper bag, cups, or other branded items that you used for their food and beverages.
At Budget Branders, we offer a full range of custom disposable products for restaurants, bars, coffee shops – and ghost kitchens. Our products are available in prices and quantities that make sense for small and medium-sized businesses. If you’re interested in learning more or would like a quote for products for your virtual restaurant, contact us at 888-373-4880, press the live chat button, or fill out our online contact form.