Ghost Kitchens are here to stay
A ghost kitchen (also known as a delivery-only restaurant, virtual kitchen, shadow kitchen, commissary kitchen, cloud kitchen or dark kitchen) is a professional food preparation and cooking facility set up for the preparation of delivery-only meals. Some ghost kitchens have allowed takeout meals or included drive-throughs. They do not include a storefront or indoor seating for customers.
Ghost kitchens serve many different purposes, but the commonality is that the kitchen is separated from the dining environment. These kitchens are operating largely unseen by customers, hence the term “ghost kitchen.” These are also described as dark kitchens, virtual kitchens, cloud kitchens, or satellite kitchens.
Each kitchen is located in areas with a high concentration of delivery demand.
Generally, a city’s health department and planning department will regulate the operation of restaurants, and the same is true for ghost kitchens, as all business and health standards and codes continue to apply to a ghost kitchen’s business operations. Ghost kitchens have none of the overhead associated with customer-facing operations—and many aren’t even owned by the restaurant themselves, Eliminating many of the costs of opening and maintaining a restaurant, like permits, inspections, furniture, equipment and more. The cost of running a traditional brick-and-mortar restaurant is overwhelmingly high, with skyrocketing overhead costs in an uncertain demand period.
With ghost kitchens come endless possibilities in terms of what you can do to launch new brands or manage multiple virtual restaurants all in one place, since your presence is online. Ghost kitchens allow you to tap into the online delivery business which is rapidly growing. Once you’re setup with the commercial kitchen equipment you need to operate, you’ll launch your restaurant brand online across multiple delivery apps. Then you’ll watch incoming orders and prepare food in your delivery-only kitchen space. Ghost kitchens are becoming a more serious business. Pre-pandemic, they were expected to account for 10% to 15% of the $66 billion US restaurant industry. Now that number is supposed to climb to 21% by 2025, according to a May report from CBRE, a real estate firm.
They tend to be in dense, urban centers, and have more of a global presence. To date, 1,500 ghost kitchens are located in the US, at least 7,500 in China, at least 3,500 in India, and 750 in the UK, according to Euromonitor, a research company. Ghost Kitchens help lower the barriers of entry, as well as invite more experimentation and creativity into the industry, experts say.
They also face the challenge of finding real estate. The further you get away from the customer, the more expensive it gets, says Jim Crocenzi, a CBRE analyst, who focuses on retail services in the Los Angeles market. These kitchens are also competing with traditional restaurants as well as traditional industrial uses for space, he says.