Dark kitchens started popping up in early 2016 when Green Summit Group was one of the first companies to try a new business model without a front of house [1]. However, the current pandemic has accelerated its growth due to an increase in delivery, plus ghost restaurants are certainly a more cost-friendly option for launching new brands and testing new markets.

Our Livit Design experts  Antonio Guzmán  (Kitchen Design Director) and  Alberto Madrigal  (Experience Architect) outline what they see as six main advantages of a ghost restaurant.

  1. Less workforce: by eliminating the front of house, the brand can do without waiters, hosts and other FoH staff members.
  2. Not-so-expensive real estate: your reduced footprint diminishes significantly compared to a regular restaurant, so securing a premium location is no longer a must.
  3. Decor: what decor? The focus in ghost restaurants is operational, not aesthetical.
  4. Easy ordering: through third-party apps or their own platform. Who orders by  phone these days anyway?
  5. Faster service: compared to a brick-and-mortar restaurant.
  6. Own delivery service: avoid paying third-party brands by taking care of the brand’s delivery yourself.

Sounds good, right? But that’s not all, once you decide that this is for you then you need to understand all its variables and versions…

Dark, Ghost, Virtual, Cloud?

Since these F&B concepts are relatively new, it can seem confusing at first, so let’s break them down one by one:

To further analyze examples of the above, take a look at the graphs  below created by Corporate Venture Capital, ACV [2]:

It’s important to realize the importance of technology and data in these new business models. The more data a company can gather from its users, the more its own value increases. This must be taken into account when deciding how a brand receives its orders. For example, if you use giants like Google or Tripadvisor then you sacrifice part of the data in order to appear in their search results. By using the brand’s own app it would certainly secure all of the data, but who likes to have their phone full of apps?

Our CEO,  Benjamin Calleja, predicts an effect similar to the one in the hospitality industry: hotel giants like Marriott or Starwood can afford their own apps thanks to their numerous locations and loyalty programs, but smaller brands might find it counterproductive. Either way, a seamless simple online ordering option is necessary.

The options are infinite and some brands have combined more than one business model.  Chili’s parent brand  Brinker International, launched “Just Wings”, a nation-wide virtual kitchen wings concept (US only) using their own physical kitchens [3]   at both their Chili’s and  Maggiano’s Little Italy  locations. “Just Wings” will be available in more than 1,000 locations and is Brinker’s response to the COVID-19 pandemic.

Next Steps: Let’s Shine a Light on your Dark Kitchen Idea

Deciding on the right business model for your brand is just one stepping stone. There is still a lot of work to be done. There are different approaches to creating and implementing ghost restaurants,  through design studios, architecture firms, market research studies, consulting companies…or even a comprehensive multidisciplinary approach. The latter is the Livit Design approach, as this is an area where we add tremendous value that most traditional design firms cannot, as their main focus is usually FoH.  We mainly focus on the following key strategies:

  1. Operational efficiencies
  2. Advanced equipment criteria
  3. Optimized menu
  4. Clever branding
  5. Ingenious packaging

Ghost restaurants are not only the perfect opportunity to salvage existing F&B brands who are suffering in this pandemic, but also the best low-risk/high-profit adventure for new brands. After all, Euromonitor predicts ghost restaurants could be a $1 trillion market by 2030 [4].  So how can a brand stand tall and get their share of voice among infinite others joining this rapidly-expanding market? This is where creativity and brand personality come into play.

If you’re ready to be a part of this trend click here to learn more!  Let’s talk.

Livit’s success comes from a 360º holistic approach that takes all aspects of your brand into account to improve your guest experience and grow your business. We have the chance to come out of this industry shake-up smarter, leaner and more efficient.

[1] Crain’s New York Business https://www.crainsnewyork.com/article/20160221/HOSPITALITY_TOURISM/160219856/these-ghost-restaurants-could-spell-the-death-of-traditional-restaurant-delivery

[2] The Kitchen Multiverse, Medium https://medium.com/@ACV_VC/the-kitchen-multiverse-d360414e3bdd

[3] The Motley Fool https://www.fool.com/investing/2020/06/29/chilis-parent-brinker-creates-a-national-delivery.aspx

[4] Euromonitor International https://blog.euromonitor.com/webinar/ghost-kitchens-food-delivery-amid-lockdown/