Ghost kitchens deliver new efficiencies away from dining hubs

Ghost kitchens deliver new efficiencies away from dining hubs

Industrial – Workplace April 2019

Ghost kitchens deliver new efficiencies away from dining hubs

They’re nothing to be afraid of – the ghost kitchen is a global trend that your food business might like to get onboard with if you’re considering a dedicated app-enabled delivery arm to your business.

American media company Bloomberg recently reported that the food delivery sector is thriving and that some of the major players are changing the way industrial property is used to facilitate the growth even further.

According to Bloomberg, Uber Eats is reportedly leasing industrial or other vacant real estate in Paris to build its own kitchens then planning to rent these fully-equipped premises to restaurateurs operating delivery-only or virtual restaurant business models.

The delivery-only businesses using these food-preparation premises – which are referred to as ghost, virtual or dark kitchens – would be serviced by Uber's Uber Eats app.

In the UK, the food courier business Deliveroo has set up “dark kitchens” in prefabricated metal structures, reminiscent of shipping containers, in some of England’s grimiest locations such as underutilised industrial estates. It then rents these out to food businesses with an established app-based delivery model.

A recent Forbes article said that businesses using the ghost kitchen model can fine-tune their operations and make changes faster than traditional restaurants can which makes financial sense. Artificial intelligence and other technological innovations can also improve their efficiency while providing more accurate data for sourcing and running the ghost kitchens.

Further, it says in the future, deliveries will probably be handled by highly-efficient drones or driverless vehicles.

Insights, the official blog of Fifth Wall Ventures, explores the big ideas that are transforming the ways we live and work.

It says the potential for ghost kitchens to boom in the United States is huge given that the online food delivery market in the US is forecast to hit $30 billion in 2022.

Light industrial areas close to main traffic arterials are the logical places for ghost kitchens to be based although unused or remnant space in office buildings or under-tenanted shopping centres also offer opportunity. Basements and smaller industrial properties that do not have the scale to be viable in the ever-burgeoning industrial sector landscape have potential for kitchen operations too.

Ghost kitchens do not require prime real estate for their operations and their physical footprint can be condensed. They don’t need customer seating areas, parking spaces, branding visibility or a status postcode. Unassuming industrial space – as long as it’s near main arterials – can work well.

Analysing the Australian app-based delivery market, the research team at Morgan Stanley expect online takeaway food orders will rise from about $1.5 billion or 10 percent of the fast-food market, to $4.2 billion – almost 25 percent of the market by 2025.

We wonder how the New Zealand market will perform.

The ghost kitchen concept is not only for entrepreneurial start-up businesses wanting to test the market. Overseas, well-established restaurants are expanding to a ghost kitchen scenario for the delivery side of their business operation, thus “protecting” their front-of-house dining operation from the comings and goings of delivery vehicles and keeping staff fully-focused on the customer experience.

Will you be “busting” down industrial property doors to get a foot in the ghost kitchen arena?

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