Ed Ryland, CCIM, MCR’s Post

Ghost kitchens - of restaurants’ past? 👻 🍴 Once a pandemic-era lifeline for the restaurant industry, #GhostKitchens now face dwindling support from investors and customers. Ghost kitchens were initially praised as an economical entry to the food industry, an opportunity to expand take out options and an outlet for large corporations to test new menu items after they capitalized on the closures of 70,000 post-pandemic restaurants. The recent shift away from ghost kitchens is marked by a consumer preference for food from publicly accessible, physical locations, with 70% of diners emphasizing this importance after some consumers felt “deceived” when unable to locate their favorite take out spot on a map. This is a stark departure from earlier predictions that ghost kitchens would constitute over 20% of the restaurant industry by 2025. Notably, there are additional challenges with the unique structure of the ghost kitchen business, with local health departments face challenges in regulating these kitchens due to their primarily online presence and ability to operate under different names. Learn more in this Yahoo News article, https://yhoo.it/3RyShss

A recent Nation's Restaurant News article dissected the complexities of third-party delivery systems, unveiling the stress they place on our kitchens and front-of-house operations. Might the solution lie in a radical rethinking of kitchen designs and operational flows that prioritize a dual-fulfillment scenario, or should regulators step in to better balance the scales between these delivery giants and individual eateries? #FoodIndustry #CulinaryInnovation #FutureOfFoodDelivery https://lnkd.in/eiTi3SUn

Very interesting development here. A company called Picnic, which appears to be part of the CloudKitchens/Otter family, has begun offering batched restaurant deliveries to office buildings and apartments in LA. Tenants can order from 100+ restaurants and the meals are dropped off together at designated pickup shelves. Notably, Picnic does not charge a delivery fee and says there's no need to tip. Customers pay the regular restaurant menu price and that's it. I'm guessing these orders are coming out of CloudKitchens ghost kitchens. Unclear whether they're being delivered by 3PDs or Picnic employees. Either way, it seems like a smart use of the ghost kitchen format. Customers get selection and convenience, and large orders help offset delivery costs. If Picnic can get enough buildings in the network, this could be disruptive. H/t to Michael Wolf at The Spoon for first making the connection. #restaurants #delivery #ghostkitchens #cloudkitchens https://lnkd.in/gaWjikFq

From boom to bust. This article highlights the rise and fall of Ghost Kitchens. Turns out that the act of dining includes the physical in-person experience we all know and love. 11 years ago in our book, Appetite for Acquisition, I wrote, "Restaurants are the fabric of our culture. The neighborhood restaurant is where we go on our first date, celebrate a promotion, and gather the family to announce our engagement." It's STILL true today. I went on to write, "In a high-tech world (imagine BACK THEN), the restaurant is a high-touch world where we still interact with one another." ✅ Ghost kitchens, supported by significant dollars, celebrity chefs, and restaurant chains, were forecast to be over 20% of the restaurant industry by 2025. Oops - not happening. ✅ Pandemic driven, ghost kitchens, essentially delivery-only setups with no physical dine-in spaces, expanded while traditional dining closed during the pandemic. The consumer was not cooking. ✅ Customer confusion ensued along with disillusioned customers when the local restaurant they thought they were supporting turned out to be a large chain. Not to mention, Uber eats and DoorDash started weeding out duplicates and taking down online digital restaurants operating under separate names with the same menu. ✅ The market shifted and demand for ghost kitchens diminished as we returned to physical dining. Challenges include high delivery fees, lack of transparency, and regulatory difficulties. ✅ Major players in the ghost kitchen market, including The Wendy's Company and Applebee's Neighborhood Grill + Bar are scaling back or shutting down their ghost kitchen operations. The economic model of ghost kitchens, reliant on third-party delivery services and facing operational challenges is not the wonder kid it was predicted to be. In a post-pandemic world, the consumer is still seeking that "high-touch" dining experience I wrote about over a decade ago. #restaurant #restaurants #restaurantindustry #WeSellRestaurants

🚀 Ghost Kitchens: From Boom to Bust 📉 Ghost kitchens, the once-hyped saviors of the restaurant industry, are facing a reality check. Once expected to dominate 20% of the restaurant scene by 2025, they're now crashing. Investors, celeb chefs, and big chains, fueled by pandemic-induced optimism, jumped on the ghost kitchen bandwagon. Kitchen United, backed by Kroger and armed with $175 million, announced it's selling or closing all its locations, signaling a trend reversal. Ghost kitchens, or cloud kitchens, emerged as a lifeline during lockdowns, capitalizing on the surge in online orders. They offered a cost-effective way for restaurants to survive and chains to experiment with new concepts. However, their demise is now evident. Customers found the concept confusing; the mystery of virtual restaurants lost its appeal as people returned to dine-in experiences. The "fooled" feeling kicked in when realizing they ordered from a big chain, not a quaint eatery. Transparency and quality concerns hit hard, with consumers preferring food from recognizable brick-and-mortar establishments. As people flock back to restaurants and drive-thrus, delivery growth has plateaued. Higher prices and delivery fees have led to a retreat from meal delivery. Ghost kitchens, lacking identity and marketing, struggled to attract customers. The business side faced hurdles too. Ghost kitchens heavily relied on third-party delivery, paying hefty fees up to 30%. The online delivery market saturation prompted Uber Eats to clean house, removing thousands of ghost kitchen listings. Major players like Wendy's, Applebee's, and CloudKitchens have pulled the plug on their ghost kitchen dreams, showcasing a trend of pandemic buzz fading as consumers revert to old habits. In essence, the ghost kitchen bubble has burst, reminding us that not every pandemic trend is built to last. 🕵️♂️🍲 #GhostKitchenCrash #RestaurantIndustry #PandemicTrends

👻Giving Up The Ghost👻 Since 2016 I’ve expressed my disbelief in ghost kitchens and third party delivery services. I have watched manufacturer rep groups, broad liners, fake sages, respected foodservice industry journalists, etc. all exploit these two concepts as “the way of the future” and “the next big thing” in a highly manipulative manner. Eight years later nothing. Giving Up The Ghost: Ghost kitchens, also known as virtual or cloud kitchens, have faced significant challenges and failures in the restaurant and food service industry. The concept, which involves preparing food for delivery or takeout without a traditional dine-in option, was initially touted as a revolutionary model. However, many small restaurants and big chains alike have struggled to make the ghost kitchen model work, leading to closures and funding drying up. The lack of transparency, difficulty in enforcing labor or health codes, and the saturation of the online delivery market have contributed to the downfall of ghost kitchens. Additionally, the business side of running a ghost kitchen has proven to be challenging, with issues such as low sales and the absence of identity or marketing behind the ghost kitchens. Third-party delivery companies have also faced high failure rates, if not worse, than ghost kitchens. Uber Eats, for example, has pruned its app of thousands of restaurants and imposed requirements on restaurant ghost kitchens to distinguish their virtual menu by at least 50%. The online delivery market has become saturated, and many restaurants have shut down their ghost kitchens due to these challenges. The failure of ghost kitchens and third-party delivery companies highlights the significant obstacles in the food service industry's evolution towards delivery and takeout models. The issues faced by these models raise concerns about their long-term viability and impact on the restaurant industry. #2024trends #2024vision #thirdparty #businessadvice #consultingservices #gimmic #fads #restaurant Restaurant Business Magazine

Another pandemic-era concept has also now run its course. Ghost kitchens. While this concept's overall demand for logistics space was relatively small, it was viewed as a growth opportunity. However, consumers prefer ordering from brick-and-mortar restaurants, the National Restaurant Association found in a survey this year, with 70% of diners saying it’s important for their food to come from a publicly accessible, physical location. The business side of running a ghost kitchen has also been challenging. Ghost kitchens rely on third-party delivery companies to deliver orders. Third-party providers charge fees, which can be as high as 30%. Local health departments have struggled to inspect and regulate ghost kitchens, too. So restaurants have shut down their ghost kitchens, and funding for the concept has dried up. Wendy’s abandoned its ghost kitchen plans earlier this year, Applebee’s folded up Cosmic Wings, and Kalanick’s CloudKitchens laid off its staff this fall. Butler Hospitality, which operated ghost kitchens for the hotel industry, also shut down.

Solving for rising costs eating restaurant profit margins. The restaurant industry is facing a double whammy: rising food costs and the pressure to deliver a seamless customer experience. It's time for a game-changer! Enter OneHubPOS, a next-generation point-of-sale solution that empowers restaurants to streamline operations, boost efficiency, and ultimately, thrive! We go beyond traditional POS, tackling your biggest challenges: ▶ Reduce Food Waste & Control Costs: Simplify inventory management and optimize ordering. ▶ Empower Your Staff: User-friendly interface gets new hires trained fast. ▶ Delight Your Customers: Tabletop ordering, loyalty programs, and faster checkout keep them happy! Imagine restaurants focusing on what they do best - creating amazing dining experiences! ✨ I'm passionate about helping restaurants succeed, and I'm confident OneHubPOS is the key. So thrilled to share I've joined OneHubPOS as Director, Go-to-Market (GTM). Stay tuned for how we're revolutionizing the US restaurant scene!

CEO Rishi Nigam sheds light on the demise of the 'ghost kitchen' concept as we've known it. The term, once synonymous with delivery-only, is now an antiquated misnomer. Rishi highlights a crucial point: success in this space was never about being a ghost, but about being seen. Read more about the transformation of the restaurant industry in the insightful piece by Aneurin Canham-Clyne in Restaurant Dive, shedding light on why the ghost kitchen model was destined for change from the outset. https://lnkd.in/ewzbpNqv

Ever wondered about the future of the food industry? 🍽️ Ghost kitchens could be a game changer. Unlike traditional commercial kitchens, these operations are solely focused on takeout and delivery. They're not designed for walk-in customers or sit-down meals. This new model could revolutionize the way we eat, especially in a post-pandemic world. But what does this mean for the dining experience we've grown to cherish? Let's discuss.