![]() “When all of a sudden, people couldn’t dine out, with the expansion of delivery, it allowed independent operators to reach the people that formally were coming to them but couldn’t or wouldn’t,” he says. Without a doubt, the pandemic fostered the growth of virtual and ghost kitchens, underscores Lee Schulman, president of Atlanta-based Panacea Management Group Consulting, a restaurant advisory firm. ![]() Now that the pandemic has mostly settled and customers are venturing back inside restaurants, how are these enterprises faring? One expert says growth has stabilized, but several of these ghost kitchen organizations have garnered considerable financial investors and keep growing despite the dine-in boom. Butler Hospitality, which was created in 2016, raised $50 million in funding, and provided room services to numerous hotels from central kitchens, shuttered in July 2022. Several companies flourished such as Kitchen United and REEF Kitchens, expanding at a crisp pace. ![]() Why spend half a million dollars to develop a brick-and-mortar outlet when you could launch a ghost or virtual kitchen for about $50,000, or a fifth the price? In addition, restaurateurs can stack seven or eight takeout eateries, as hospitality firm C3 does when it clusters several of its brands-Umami Burger, Sam’s Crispy Chicken and Krispy Rice-into one virtual kitchen facility, cutting costs and reducing staff. Virtual kitchens served as replacements for indoor dining, enabling entrepreneurs to open at a fraction of the cost of building and developing a stand-alone restaurant. Restaurants began to depend on central facilities to fulfill takeout and delivery, and to deliver off-premises demand through lower-cost means. When the pandemic arrived in March 2020, and consumers stopped dining indoors, a movement in the restaurant industry gained speed that’s led to an expanding number of ghost and virtual kitchens.
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