DoorDash Kitchens Is Carving A Path For Restaurant Expansion

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For 90 years, if you wanted the best pastrami sandwich in Los Angeles, you went to Canter's Deli. The delicatessen, now owned by the third generation of the Canter family, has been featured in numerous movies and television shows and has been named one of the 50 greatest food stores in the world.

But if you didn't live within driving distance of Canter's Deli, you likely missed out.

"We have been building our brand for generations and people outside of Los Angeles know about us, but they ultimately can't enjoy our recipes we've perfected over the decades," owner Marc Canter told Modern Shipper. "Partnering with DoorDash Kitchens provided us with the opportunity to expand beyond Los Angeles into Northern California. We're now able to bring the West Coast deli experience to more customers in a new market, which we wouldn't have been able to do otherwise without opening a storefront in the area."

Canter's Deli is one of six restaurants that are taking advantage of a new DoorDash (NYSE: DASH) offering, DoorDash Kitchens Full Service. In 2019, the delivery company opened DoorDash Kitchens to help smaller restaurants create delivery-only models. DoorDash Kitchens Full Service, announced Thursday morning, is an expansion of that, offering new opportunities for restaurants to expand their markets without absorbing the costs of doing so.

"When we launched DoorDash Kitchens in 2019 [in Redwood, California], we had the goal of helping our restaurant partners grow their business by expanding their geographic footprint and reaching new customers, in turn generating more revenue," Ruth Isenstadt, director of DoorDash Kitchens, told Modern Shipper. "The needs of our restaurant partners now are not the same as they were two years ago, and we see DoorDash Kitchens Full Service as an extension of our initial vision."

The new service allows restaurants to open a location inside a DoorDash Kitchen, but unlike the previous offering, Full Service transfers many of the day-to-day decisions to DoorDash in exchange for a revenue-sharing agreement with the restaurant.

DoorDash is quick to say that it will work with the restaurant to ensure the food reflects its branding and meets its quality standards. Restaurant partners will provide a list of ingredients and preferred sourcing to ensure consistency from location to location. In some cases, the restaurant may even sell its products wholesale to DoorDash.

Related: Read: Who orders $2,900 worth of perfume on DoorDash? That and other fun delivery trends from 2021 Read: Investors send DoorDash stock soaring on strong earnings, outlook

"We look at this partnership first and foremost as an opportunity to reach new customers in a market where Canter's Deli has never been before," Canter said. "My family takes pride in hearing that people are enjoying Canter's Deli in new locations, and this is the primary way we are quantifying our success."

The original concept of DoorDash Kitchens was to offer restaurants an inexpensive way to expand in new areas, outsource delivery operations to free up space for more dine-in customers, or to test areas for future locations without the large upfront costs associated with opening brick-and-mortar locations.

Isenstadt said DoorDash Kitchen operators were interested in ways the company could provide additional support beyond the initial concept.

"This kick-started the idea for DoorDash Kitchens Full Service, where DoorDash assumes more of the day-to-day operations in order to provide an even more flexible and cost-effective way for restaurants to expand," she said.

Under the new model, DoorDash will handle most operational costs, including costs associated with opening the storefront, hiring staff, meal prep, and procuring equipment and ingredients.

DoorDash Kitchens Full Service's culinary side is being led by chef Carl Berka, former head of culinary development at Ruby Tuesday and a former pastry chef at Gordon Ramsay at the London. The entire culinary team includes a mix of fine dining, casual dining, corporate foodservice and catering experience team members.

For Canter's Deli, the culinary team has been able to incorporate what makes its food special.

"Our offerings are not easy to duplicate and there are a lot of nuances to getting deli right. This takes pride and you really have to care about the art behind this to keep our reputation intact," Canter said. "When we began partnering with DoorDash Kitchens, we were connected with their culinary team for not only in-person training in Los Angeles, but also with hours of video calls after to ensure everything was up to our standards."

The first DoorDash Kitchens Full Service location is now open in San Jose, California, with six restaurant brands — Aria Korean Street Food, Canter's Deli, Curry Up Now, Milk Bar, The Melt Express and YiFang Taiwan Fruit Tea.

Customers can order for delivery or pickup from any of the locations through the DoorDash app.

DoorDash will either hire the cooks themselves or partner with a staffing facility such as A La Couch for cooks. DoorDash will also hire managers for each facility and front-of-house staff as needed. The company said each restaurant will be engaged in determining the menu for each location and involved in the training of kitchen staff.

While DoorDash will handle most of the work, the restaurant owner will receive a portion of revenue in return without the day-to-day operational requirements. Isenstadt said the revenue portion is dependent on the restaurant's unique needs. She noted the Milk Bar as an example. The New York-based restaurant is opening up the location in the Bay Area but will continue to handle the bulk of food preparation itself. Other restaurants may want DoorDash to handle more of the day-to-day operations.

"Either way, DoorDash remains in close contact with restaurant partners as our collective priority is to ensure that we have the best people executing the menu and vision set out by our partners," she said.

Canter said that despite not being on location, he has found working with DoorDash's team easy and is confident that what customers in San Jose are receiving is high-quality food reflective of the Canter's Deli brand.

"We connect with our partners at DoorDash on the regular, whether it's over the phone, email or even video calls for quality checks with DoorDash's culinary team to make sure our deli offerings are just right," he said. "When customers order from Canter's Deli via DoorDash Kitchens in San Jose and Redwood City, their food will be packaged in our brand's packaging, including stickers of our logo and tamper-resistant seals. DoorDash also monitors the quality of our brand by monitoring customer ratings and feedback. If there is any suboptimal feedback, I'm confident DoorDash will act swiftly to resolve the issue at hand, as this is also a reflection on their services in addition to our brand."

For Canter, the opportunity to engage with new customers is helping the company gauge interest in expanding Canter's Deli footprint.

"Through our new delivery-forward concepts in DoorDash Kitchens San Jose and Redwood City, we have already been able to reach new customers outside of Los Angeles," he said. "This is an opportunity we are excited about as we look to grow our brand beyond Southern California, and we would absolutely open up a conversation with DoorDash about future opportunities."

Click for more Modern Shipper articles by Brian Straight.

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