Restaurants use ‘ghost kitchens’ to fill delivery demand

The rise of the ghost kitchen and virtual restaurants

Hi there, thanks for joining us once again for Plain English. I’m Jeff; JR is the producer; and you are listening to the best podcast for learning English. Today is Episode number 208 and that means all our resources are available to you at PlainEnglish.com/208. Just as a reminder, the resources include a free word-for-word transcript, and Plain English Plus+ members have access to video lessons, translations, flash cards, and a fast version of this very episode.

Coming up on today’s program: Food delivery is changing the restaurant landscape, and it’s giving rise to a ghost kitchen—kitchen space restaurants use exclusively to serve delivery customers. Sticking with our culinary theme, our phrasal verb is “whip up” and we have a quote from my favorite Indian chef. You’ll want to stick around until the end to hear it!

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The rise of the ghost kitchen

Food delivery is booming in the United States and Europe. Powered by new apps like Uber Eats, Seamless, DoorDash, Grubhub, and countless others, the restaurant industry is whipping up dinner and delivering it to consumers’ doors with vigor. In the United States, delivery represents just five percent of the $800 billion-plus restaurant industry’s revenues, but it’s growing fast, while traditional restaurant revenue is stagnant.

This is more than a passing fad: the apps are redefining what it even means to be a restaurant.

Delivery has long been common in dense urban areas like New York City, where restaurants could afford to have a network of delivery men deliver the food on their bikes around the city. It has also been popular for certain types of food all over America, like pizza and Chinese food. But beyond those staples, food delivery had never caught on. A typical restaurant outside a dense urban area could not afford to hire delivery drivers and consumers didn’t associate quality meals with delivery.

That is all changing. Sharing economy apps are doing to restaurant delivery what they have done to personal transportation: making it cheaper and more widely available. As a result, an Uber Eats driver can deliver meals from restaurants big and small, cheap and expensive, traditional and exotic, near and far. Consumers are responding, ordering more and more food to be eaten at home. The market is worth $27 billion in the US annually and is the fastest growing segment of the restaurant market.

But have you ever stopped to think about what it’s like from the restaurant’s perspective? They now have to serve two masters: the customer in the store, looking for a good experience, with quality service; and the online customer, who is above-all looking for speed and a meal that will look good and stay fresh during delivery. And by the way, the restaurant has to pay up to a 30 percent commission for the online order. Restaurants have typically tried to meet those two objectives from the same place: their restaurant.

It doesn’t always work very well. Restaurants have traditionally been designed with proportions in mind: the kitchen is big enough to serve the number of tables that are present. It doesn’t make sense to over-invest in a kitchen at the expense of tables, right? But now with the proliferation of delivery orders, those kitchens are over-extended and they have a hard time serving delivery orders in a space designed only for the dining room.

Second, a restaurant is designed with a front door, a host stand, and the tables in the back—it isn’t designed to accommodate lots of delivery guys coming in and picking up orders. That can be disturbing as a guest—the door is constantly opening and closing; there’s a lot of traffic; a lot of non-customers crowding in that host area.

Finally, many restaurants are in areas that are high-traffic for pedestrians and they have enough parking to accommodate the guests in the dining room—not necessarily a constant flow of delivery cars pulling up and picking up quick orders.

The problem is, the restaurants have treated delivery as an afterthought, an addition to their core business. But the result is that both sets of customers don’t quite get what they need. The visitors in person get a cheapened experience, with crowding, and lots of traffic, a noisy environment; the delivery person gets slower service because the spaces aren’t designed to accommodate a lot of drivers. What if there were a way to specialize a little bit and separate those two functions? Could you serve delivery customers from one place and in-person guests in another?

Introducing the ghost kitchen: it’s a restaurant kitchen focused exclusively on food delivery. In that kitchen, the restaurant staff focuses on speed and efficiency, with easy access for delivery drivers to pull up and get their orders quickly, while in the traditional restaurant, they focus on the service and the atmosphere.

Kitchen United is one firm that has opened ghost kitchens just for delivery—one here in Chicago and another in California. The company counts Google as one of its investors and, not surprisingly, has ambitious expansion plans: it wants to be in 40 cities nationwide. DoorDash, which is one of the delivery firms, has opened its own ghost kitchen with four restaurant chains as users. Uber Eats jumped into the fray with a shared kitchen in Paris just for restaurants that use its service and has now expanded to other countries, including the US. In Europe, Deliveroo opened mobile kitchens that can be installed in parking lots of existing restaurants. Panda Selected serves consumers in China’s dense cities.

This appeals to big brands and small entrepreneurs alike. National brands like Chick-fil-A, The Halal Guys, and others have high brand awareness and serve a high volume of customers; they appreciate that shared kitchens can help them serve a high volume of orders. But small entrepreneurs like it, too. A single restauranteur can try a new concept without investing in a physical presence by launching an online-only restaurant. If it’s successful, then he’ll have the validation he needs to invest in a physical space. Uber Eats says that it has helped 4,000 such “virtual restaurants” around the world—half in the US and Canada, and half elsewhere.

I must admit, I am only half-sold on food delivery. As convenient as it is, it’s expensive. Sometimes you have to pay a delivery fee; you always have to pay a tip, at least here. It’s not uncommon for a single meal to add up to $35 or more. But the flip side is time. If I get home after a week in another city, I walk in the door on a Thursday night, my fridge is empty…I use the delivery apps. For me, it’s once in a while—once every two or three weeks, but I know people who do it a lot.

What I need to find is restaurants that specialize in making food that’s good for delivery. There are some meals that are good in person, but that you wouldn’t want delivered.

So it happened again: I was writing this episode and it got longer and longer, until I decided: we have to split this up into two episodes. So on Thursday, I am going to introduce you to a fictional restaurant called Mariscos by JR. And we are going to explore how an individual restaurant would use the ghost kitchen concept.

Time to say hi to a few listeners—Camila from Sao Paulo says Plain English is the best podcast she’s ever heard of! That’s amazing. Thanks Camila! Selva from Chennai, India, wrote to me on WhatsApp and sent me a test podcast episode in English that he produced on Anchor. That was fun to listen to, thanks Selva.