'Ghost kitchens' ride wave of food delivery boom during pandemic

·5 min read

May 29—It's no secret that food delivery services exploded in the past year as people stayed home more often during the pandemic.

Bloomberg Second Measure, a tech company that analyzes consumer habits, reported earlier this month that in April, sales for meal delivery services collectively grew 36% year-over-year.

That trend led to the explosion of a particular kind of restaurant: ghost kitchens.

Ghost kitchens are delivery-only restaurants whose menu items are prepared out of existing professional kitchens or storefronts. It lets restaurants highlight certain menu offerings under a different name or expand to other types of cuisine with little overhead.

Ghost kitchens are not an entirely new idea, but they have become more common as the industry shifted to more takeout-heavy options. Their virtual brands are only available online or through third-party delivery apps like DoorDash, GrubHub and EatStreet.

If you don't recognize a new restaurant through an app and take a closer look, you may notice the listed address belongs to an already existing establishment in town. Chances are that's not a mistake.

For example, It's Just Wings lists its address as 213 Fort Riley Blvd., the same as Chili's Grill and Bar, and The Country's Best Chicken says it can be found at 511 McCall Road, the site of Pizza Ranch.

Tamara Knutsen-Hagemann, who has been a part-time DoorDash driver since last spring, said she noticed these types of orders begin popping up around the summer.

"The first time I ever got a call to pick one up, I was like, 'What is this? I've never heard of this place,' and then it took me to Chili's," she said. "When I went inside, they were like, 'Yeah, it's a ghost kitchen. ... I think it's a pretty smart idea. I mean if you have the kitchen and you have the equipment to offer something different, why not?"

Vista Drive-In, 1911 Tuttle Creek Blvd., is another local restaurant that has partnered with virtual kitchens to expand their offerings, providing an additional revenue source during the pandemic, without putting too much additional strain on employees.

In addition to their usual classic American fast-food items like burgers and fries, Vista also serves food from Lopez Tacos, street-style Mexican fare under the name of comedian and actor George Lopez, and Mariah's Cookies, baked goods under a brand by singer-songwriter Mariah Carey.

Andy Streeter, general manager of Vista, said he'd initially been contacted by Nextbite, Lopez Tacos' parent company, which serves as a marketplace for virtual kitchens, back in late 2019. He said he initially didn't think much of it until Sysco, a food distributor Vista already worked with, shared more information on Mariah's Cookies and Virtual Dining Concepts.

"(We thought) instead of figuring out a way not to do it, let's figure out a way how we could do it," Brad Streeter, owner of Vista Drive-In and Andy's father, said, "which is a good philosophy for lots of things."

Vista began carrying Lopez Tacos and Mariah's Cookies products at the end of March 2020. In exchange for the space, preparing the orders and a commission on sales, the partner companies take care of the marketing, dining concepts and recipe creation.

The Streeters said while other food and drink establishments have not been so lucky, Vista has been able to survive fairly well the past year as they already had a drive-thru, delivery traffic picked up and there was a big push to shop local in the early days of the pandemic.

"The big picture as I look at it, as a percentage of sales right now it's not very big, but it's definitely something we don't normally do," Andy said. "Those would be all lost sales, and as it grows it's going to become a bigger part. I think that delivery is going to continue to grow."

He said COVID-19 fast-forwarded the delivery business by several years, which Brad agreed with.

"People in my age group, we don't get delivery very often but with COVID, they figured out how to order online," Brad said. "... You learn how because you had to learn, and then those people are going to continue (to do so)."

The Streeters pointed to other ways industry concepts have been evolving, both as an impact of the pandemic and otherwise.

At the Flagstop Resort and RV park in Milford, a group of local restaurant owners formed a culinary collective earlier this year and opened a shared kitchen, allowing each owner to operate their business a different night of the week. Depending on the day, it could serve anything from barbecue to shaved ice and Puerto Rican to soul food. Taco Lucha and So Long Saloon in Aggieville also have shared a kitchen for years.

In addition, the Streeters said many places are realizing how expensive maintaining dining rooms are, so some have remained closed to this day, or restaurants may choose to downsize them in the future. Others could elect to operate an establishment for ghost kitchens only.

As for Vista, Andy said they will assess the pros and cons of continuing to serve, or even adding to, their virtual restaurant offerings in the coming months.

"There's a lot of different things that go into play, but in the end, with the time we put into it, (we'll look at) is it really worth what we're making?" Andy said. "It's cool, but the bottom line is how can we best take care of the customers and our employees? ... We've always tried to provide the best quality we can and the best price we can for people, and if we can add one and still take care of everybody appropriately, then we'll do it."

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