During the COVID-19 pandemic, ghost kitchens were the ideal foodservice solution at this time. Although it has been around since before 2020, it has flourished thanks to the opportunities presented by the renaissance of shuttered dining rooms and delivery. But four years later, the virtual restaurant industry has gone through the motions, from legal and licensing issues with Leaf Kitchen, to the rapid rise and fall (and sale) of Nextbyte, to lawsuits over Mr.Beast Burger and virtual dining concepts. Until now, it has struggled to find a permanent foothold.
In the latest virtual restaurant industry news, Sam Nazarian, founder and CEO of SBE and C3, announced the acquisition of Kitchen United. It comes just months after ghost kitchen concession operators quietly closed all Kitchen United Mix stores inside Kroger supermarkets. In conjunction with its purchase of Nextbite last June, Nazarian created an omnichannel “supergroup” company called Everyone Eats, effectively reducing its competition to one company: MrBeast Burger's parent company, Virtual Dining Concepts.
While Nazarian's acquisition helped shrink the ghost kitchen industry, virtual dining has long been changing and being challenged. Nazarian said he sees Everyone Eats as a platform for brands that pulls a lot of levers. In fact, the least profitable of these is delivery.
“While we got caught up in the ghost kitchen craze of 2020 and 2021, we are not and have never been a ghost kitchen company,” he told The Nation. told Restaurant News. “Fundamentally, if you're a delivery-only business, I don't think it's a profitable endeavor…We're a solution that connects new audiences through different platforms, through brands, IP and food.”
In addition to delivery, those platforms include food halls, digital brand partnerships with established restaurants like TGI Fridays (which added C3's Crispy Rice Sushi to its in-house menu), airports, stadiums, hotels and even cruises. This includes expansion in non-traditional locations.
“If we can bring new customers to new cuisines, that's a big accomplishment,” Nazarian said. “The way we differentiate is by finding the best collaborators for our customers to connect with and help them scale. [the brands] In various ways… For a brand to be relevant, it needs to find great partners to expand it. ”
So how do Everyone Eats' three vastly different digital first restaurant platforms fit together and work together? Nazarian said the acquisition works by recognizing the strengths of each platform. C3 (original brands like Crispy Rice and Umami Burger) is a culinary-focused engine that emphasizes full-service brands, not just menus with clever delivery packaging. He said Nextbite's strength lies in its digital technology and focus on casual dining partnerships like IHOP. Meanwhile, Kitchen United became well known for expanding its business through the grocery and convenience store channels.
Of course, this multifaceted approach to the virtual dining industry is neither new nor unique to Everyone Eats. A year and a half ago, NRN reported on the rise of “visible ghost kitchens” like Oomi. Rather than operating out of a “creepy warehouse,” the company operates virtual food halls and foodservice experiences that actually encourage customers to visit its stores. This has been the writing on the wall for virtual restaurant companies for some time. It's omnichannel or bust.
“It’s not just about increasing delivery channels, it’s about getting people back into restaurants,” Nazarian said.
Among the lessons Nazarian has learned from failed or struggling ghost kitchen companies is placing too much emphasis on software and digital reach, and basing a brand's success on celebrity partnerships rather than food quality. , said it could possibly spell disaster. An ambitious delivery forwarding business.
Now, with the merger of three former competitors, the newly formed Everybody Eats is one of two major companies left in the once-crowded virtual brand space. Virtual Dining Concepts recently made their own announcement that they are acquiring social media fame Man Vs. french fries. Much of VDC's concept has its roots in its popularity among Millennial and Gen Z social media scrollers, especially his MrBeast Burger, the company's most popular brand. Robbie Earle, president and co-founder of VDC, emphasized that the company differentiates itself by “staying ahead of the curve and staying relevant.” We also recognize that flexibility is the future of our industry.
“We've restructured our business model to focus on what we call an omnichannel virtual brand,” Earl said. “There are many places where brands can go omnichannel: on the menu, on the brand’s core digital menu, on virtual channels, and on pickup.” We will continue to consider it.” If there's something that can benefit restaurants, we're interested. We're taking it and spreading it across the world's largest virtual restaurant network. ”
Contact Joanna: [email protected]meters
