Business and Operations
Growing trend in ghost kitchens and online orders
By Bakers Journal
A 2018 analysis by research company Frost & Sullivan on online food delivery predicted significant growth by 2025.
The prediction has already culminated – due in part to manage the Covid pandemic. Nowadays delivery services, particularly countries that are still facing the early stages of the pandemic, is the only way for the HORECA sector to operate and the only way to maintain safe contact with customers.
Delivery and Cloud Kitchens
Bars and restaurants in different countries are going through “Phase 1” to contain the spread of the virus, following guidelines dictated by the World Health Organization and local administrations. To cope with forced closures restaurants and fast food chains who already use delivery services, have resorted to technology, expanding systems beyond the more traditional concept of home delivery. One of the latest modes developed is the cloud kitchen. A cloud kitchen is when an operator realizes a co-working space equipped for two or more restaurateurs that work for one or more delivery platforms each with its own brand.
Ghost Kitchens offer the restaurateur a chance to create a kitchen that supplies with its own brand and delivery platforms, or develops a delivery system on his own. A dark kitchen, on the other hand, is managed by a traditional restaurateur that dedicates a space to delivery, while in a virtual kitchen an established brand enters a market where it is not present yet, through a franchise agreement. These temporary solutions can certainly not replace the concept of restaurant, but represent a momentary way to go, that may also continue in the future along with the actual restaurant business.
John Lettieri, founder, president and CEO of the HERO CERTIFIED chain, observed the situation in Canada for this particular segment. Within his chain, he promotes the concept of using a virtual kitchen, an interesting model to increase the business: “Virtual kitchens are set to disrupt the eatery industry in Canada. Revenue from food delivery is estimated to grow by 2.5 million per year at a rate of 23.3 per cent for approximately 95,000 operators. What are the benefits? Taking advantage of existing fixed assets, expand franchise formulas without start-up costs and investments reduced to a minimum. The virtual kitchen gives access to new dining trends and changes consumer preferences. Operators in the sector are currently looking for different ways to increase their business. Online food delivery is part of a macro trend characterized by the on-demand model and millennials are particularly targeted: Research indicates that they are three times more likely to ‘order in’ than their parents”.
The future of fine dining
The return to out-of-home dining, fine dining, with due precautions, are still in demand for some consumers. For example, Middle-Eastern countries, whose hospitality is recognized worldwide, are looking to the future with optimism. In order to re-open, restaurants and hotels rethinking their spaces to reduce the number of tables available and provide the customer a safer table setting, using disposable tableware.
Naim Maadad, Founding Member of the new Middle East Restaurant Association (MERA), reports on the situation. Restaurants and cafes have been open since the last week of April, although with strict restrictions to maintain the social distance of two meters between the tables and therefore operating with a limited maximum capacity compared to the usual number of seats. Seating times will have to be fixed within restaurants and the take away service will have to be actively encouraged, including in-room dining through hotel room service. Therefore the buffet system will no longer be allowed for breakfast, brunch, lunch and dinner. Maadad points out that delivery for restaurants will not be its sole source of profit. There are fast food chains that can switch over more effectively, as such brands are renowned for delivery option well before the pandemic. For fine dine restaurants, delivery will hugely affect the experience and the menu has to be re-created to include items that can travel the delivery distance without losing its taste. Fine dining restaurants would only make a miniscule revenue and would not be a path of sustenance for the industry. It is just an interim arrangement to survive the pandemic.
During the months of lockdown, delivery appeared to be a saving grace, though it did mean losing the dining-in experience, as the menu had to be “modified” for transportation needs. A few weeks before Phase 3 reopened bars and restaurants, they developed alternative solutions while still respecting health regulations. Some of great names in five-star dining carefully analyzed the situation and proposed innovative methods to entice customers to start eating out again, such as a “buy one, get two” vouchers, expendable until the end of the year, or online bookings with 20 per cent discount rates.
Once Phase 2 finally started, the next step involved managing resources, without changing the style of a starred menu: customers have shown a strong desire to return to the conviviality of on-site dining, while paying close attention to the safety and security aspects and by giving priority to large spaces or outdoors. For this reason, many Italian starred restaurants have focused even more on quality and mise en place while also exploring new and interesting solutionsin “outdoor” consumption. Here are some: take advantage of open air spaces or poolside in full respect of social distancing with a menu that speaks of renewed conviviality, with pizza and barbecue, always in fine dining style. With the arrival of the summer season, the restaurateurs are equipped with innovative ways to enjoy a dinner or a lunch, such as the “fine dining pic ninc” or “in Berber tent” tastings.
So what will the world of post-Covid catering look like? No one knows for sure, but the changes will probably be dictated at first by necessity, and will be incorporated into the “new normal”, proving this highly social value sector to be vibrant and capable of generating innovation.