An image of DoorDash Kitchens, an example of ghost kitchen, dark kitchens, virtual kitchens, in an article on ghost kitchens

Exploring the phenomenal rise of ghost kitchens

One trend within the restaurant industry that has seen phenomenal growth in recent years is the use of ghost or virtual kitchens. These “delivery-only” establishments operate exclusively online without the need for a physical dining room or storefront and offer a flexible and cost-effective solution for meeting food delivery demand.

Unlike traditional restaurants, which often require large workable spaces, ghost kitchens are able to operate in unconventional locations, providing owners with access to new markets. Also known as dark kitchens, this business model has been in the restaurant industry since 2013 and its popularity soared in the wake of the Covid-19 pandemic. 

What is the purpose of a ghost kitchen?

The primary focus of a dark kitchen is to cook and package food for delivery. Therefore, once an order is received through the delivery app, the kitchen prepares the meal, packages it, and sends it out. Therefore, operating through a virtual kitchen can help restaurant owners in several ways. 

For many, it can be a more cost-effective option, as restaurant owners can save money by operating without having to invest in a physical storefront. Additionally, it can help meet the demand for food delivery without the heavy initial costs of opening a restaurant. More so, virtual kitchens allow emerging eateries to enter the market with fewer restrictions.

Notably, several well-known restaurant chains have adopted this business model.

As dark kitchens are able to prepare large quantities of food efficiently due to their design, they often function in industrial kitchens or commissaries: large commercial kitchens that are big enough to hold several virtual restaurants. 

An image of a ghost kitchen worker packing fast food containers, takeaway boxes, takeout containers, a fast food order into a bag for delivery in an article on ghost kitchens

Exploring the pros and cons

Dark kitchens offer several advantages for restaurants. In addition to helping restaurant owners avoid the high costs often associated with traditional brick-and-mortar establishments, ghost kitchens offer flexibility with locations and menu offerings. This business model allows brands to test new menu items in a cost-effective manner, as the menu is provided in a digital format and will not require print runs. Expanding delivery options can help increase revenue and reach for restaurants, particularly when they offer exclusive delivery-only meal options to customers.

An additional benefit is faster service, as dark kitchens are specifically designed to produce fresh fast food quickly and send it straight out for delivery. 

As with any new business model, there can be some disadvantages to adopting a ghost kitchen. For instance, restaurant owners may relinquish a degree of control over the quality of the food being delivered. Having a physical storefront can help owners oversee food safety and hygiene protocols, making it easier to maintain high standards and ensure customer satisfaction.

Additionally, a physical storefront can be an effective way to increase customer loyalty and credibility. For example, community members are likely to become regulars at local traditional brick-and-mortar establishments but may feel a virtual kitchen lacks the personal service they are craving. That said, delivery-only options do offer a complete dining experience to customers, and due to the increased popularity of food delivery, restaurants can take advantage of this opportunity. However, dark kitchens depend on third-party delivery, which can be expensive and affect profits.

An image of two consumers eating burgers out of burger boxes, kraft paper fast food packaging, kraft paper burger boxes, made by ghost kitchen staff in an article on ghost kitchens

The impact on the restaurant industry 

Ghost kitchens have significantly affected the restaurant industry, especially in food delivery. For example, they have helped revolutionise the delivery sector by offering cost-effective and flexible delivery-only options for restaurants. In turn, this has helped restaurant brands reach new customers and created an opportunity to generate more revenue. 

More so, dark kitchens were a lifeline for many restaurants during the Covid-19 pandemic, helping them to continue to serve customers. Notably, this business model has highlighted the growing significance of delivery in the restaurant industry. Therefore, restaurants must adjust to the changing habits of customers who are increasingly ordering food online in order to remain competitive. 

The future of virtual kitchens is likely to continue expanding as consumer behaviour shifts towards online orders, making delivery options more popular. In turn, this is helping drive the expansion of the ghost kitchen business model. Therefore, it is likely more restaurants will roll out ghost kitchens to expand their revenue streams and reach more customers. Numerous restaurants may join the movement, boosting competition and encouraging owners to compete in quality, speed, and brand recognition.

Importantly, ghost kitchens require restaurant owners to invest in automation and artificial intelligence technology, which aims to improve quality control and increase efficiency. As advancements in automation continue, the question of using drone technology for food delivery has surfaced. While the use of drones may offer a more efficient food delivery process, the technology and training involved may be costly for many businesses. Additionally, there are the logistics involved in vetting this new technology and determining how customers will retrieve their meals upon delivery.

More so, there are several general limitations to using this business model:

  • Reliance on third-party delivery services
  • Lack of physical storefront
  • Quality control challenges
  • Limited menu options
  • High overhead costs
  • Regulatory challenges

It is clear this business model could help boost restaurant revenue through expanded services, helping them gain popularity. While they may be cost-effective for most restaurants, they do come with some drawbacks, including limited menus, quality control issues, and regulatory obstacles. However, the future of ghost kitchens is promising, with more adoption and competition.