Ghost kitchens have emerged as a popular solution for restaurants to generate revenue while brick-and-mortar locations are closed during the Covid-19 pandemic. Once a promising “darling of the pandemic” that raised billions of dollars in venture funding, the ghost kitchen industry has “fallen short of lofty expectations.” CNBC Said.
“It's clear that the impact of ghost kitchens was overestimated,” Evert Grujhardt, Deloitte's restaurant food and services leader, told CNBC. “And today we see that with the decline of ghost kitchens.”
How the lockdown due to the new coronavirus infection accelerated the ghost kitchen boom
Ghost kitchens are “commercial kitchens with minimal functionality” and will operate as delivery-only businesses, with no dine-in options, and will accept orders from apps such as Uber Eats. CNN. Ghost kitchens may operate outside of a catering venue or in a restaurant alongside regular service. Also known as cloud kitchens, dark kitchens, or virtual kitchens, they may host up to dozens of menus served from the same location.
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Although the concept has been around for years, ghost kitchens became popular during the pandemic because they were seen as “the saving grace of the restaurant industry” as restaurants closed and turned to online delivery services, according to CNN. I told you. Restaurant owners and investors saw it as a cheaper way to start a business than traditional sit-down dining. Ghost kitchens also offered large chain restaurants “a way to test new menu concepts, items and brands with less rent and less labor,” the magazine said.
Interest in ghost kitchens and their “virtual brand cousins” seems to have exploded overnight as restaurants look for ways to regain revenue, he said. new york times. As restaurants and caterers began operating ghost kitchens outside of venues, celebrities and influencers began launching food brands exclusively for virtual delivery. The popularity of virtual kitchens has attracted billions of dollars from investors, and startups and established brands have announced plans to expand into the space.Kroger partners with startup kitschn United Airlines will open ghost kitchens in some grocery stores. In 2021, Wendy's announced its next plans. Open 700 ghost kitchens Partnered with startup Leaf Technology. Many in the industry thought the delivery-only trend was important. The next big development In food and beverage services.
Why the food delivery trend has slowed down
After pandemic lockdowns end and customers return to in-restaurant dining, major chains operating out-of-store ghost kitchens are feeling the pinch due to overburdened kitchens and rising customer complaints. This led to him rethinking his strategy, The New York Times reported. Many of them have abandoned ghost kitchens altogether. Wendy's withdrew its plans and Kroger closed all ghost kitchens in 2023. Consumers are eating out again and are “craving a relationship with the brand itself,” said Dorothy Calva, senior research analyst for foodservice at Euromonitor International. he told the Times. She said, “Virtual brands had no connection with consumers.”
After a spate of food quality issues, Uber Eats last year cited complaints of “poor quality, inaccurate orders, and duplication, meaning multiple near-identical restaurants operating in the same location.” The Times reported that 8,000 stores were removed from the list. Calva said many customers “got burned” by virtual restaurants during the pandemic, which “created a pretty bad perception of a lot of virtual brands.”
YouTuber known as Jimmy Donaldson Mr. Beast, He was so dissatisfied with the quality of his namesake burger that he sued his collaborator, Virtual Dining Concepts, the operator of Ghost Kitchen Concepts. Mr. Donaldson sued Virtual Dining Concepts, seeking to terminate the company's contract to expand Mr. Beast Burgers to 1,700 U.S. stores, claiming he had received thousands of customer complaints.Virtual dining concept countersuedaccused Donaldson and his investment firm of breach of contract after Donaldson made derogatory comments in a series of social media posts.
Virtual Dining Concepts executives defended the virtual brand from the bad publicity it received in some quarters during the pandemic, saying complaints about virtual restaurant hot food delivery are the same as complaints from traditional brick-and-mortar restaurants. He claimed that. Robert Earl, founder of Planet Hollywood and founder of the virtual dining concept, told the Times that whenever you put a piping hot hamburger in a box, “it generates heat and steam that makes the burger experience worse.” told the paper. . “Delivery is not a perfect science.”
