- 90% of restaurants experienced digital growth last year with 20% reporting growth of over 100%
- Online ordering, mobile apps, and delivery are the three biggest priorities for 2021
- 47% of brands plan to launch a new virtual kitchen concept this year xcv
Ghost kitchen terminology
- Ghost kitchen – a kitchen optimized for delivery orders that could be used by one or multiple businesses and virtual restaurants
- Host kitchen – rent out your existing kitchen space to other virtual restaurants or food brands
- Cloud kitchen – often used interchangeably with ghost kitchen; uses technology to accept online orders and efficiently produce food for delivery
- Virtual brand or virtual restaurant – a delivery-only concept that operates out of host, ghost, or cloud kitchens
10 virtual brand and ghost kitchen best practices
1. Look for gaps in the market
2. Streamline your menu
3. Don’t be afraid to experiment
You can test new concepts with ingredients you already have on your line. If they don’t work, it’s no great loss, you can kill them without much expenditure.
4. Think long term
Brands that are going to succeed in the longer term must focus on the quality of food, value in the price point, and differentiation. It may well be an irrational market at the moment, but that will not last. Successful restaurant brands will be looking ahead and making plans for the future.
5. Nail your digital marketing
A virtual restaurant brand should be given the same time, love, and care as your brick-and-mortar brands.
6. Own your Google My Business page
Every business can claim it for free and you can edit that page to maintain control of the customer experience. You can direct customers to order directly from you, or send them to whichever ordering platform you want them to use.
7. Don’t cannibalize your existing business.
Look at what you can do without affecting your existing business. Can you add one extra ingredient and create a whole new brand? Can you create a new brand using similar cooking equipment and not too much extra training?
8. Aim for a 30%+ margin
When you’re adding a virtual brand, you want to be hitting at least a 30% margin. If not, it’s unlikely to be worth it.
Orders are going to have to be high volume – 1000-1500 a week – to achieve success given the third-party fees. Key areas where you can cut costs are in understanding and managing recipe costing and reducing waste.
If you’re unable to achieve a 30% margin, it may be wise to rethink your strategy, streamline the menu, and see what more you can do with your existing setup.
9. Build and utilize a strong partnership with tech partners
In such a fast-moving landscape, the connection between tech providers and restaurant brands is more important than ever.
Get in the room with your tech partners and don’t be afraid to have a bad idea in front of other people. Listen to others with a different perspective. Communication is a two-way street and the tech guys will come at problems from a completely new angle.
Choose a tech partner with excellent support. Make sure you can pick up the phone and talk to someone especially with a complicated tech stack, as you don’t want to be trying to troubleshoot an issue with a chatbot in the middle of your weekend rush.
It’s also crucial that you work with a team that can support you to scale your operation sustainably.
10. Reallocate labor rather than cutting staff
To add a new channel without compromising, utilize the staff you already have better. Too many brands think the way to solve their problems is to cut staff. But this often leads to issues down the road.
If you can save jobs by adding value to that labor while adding revenue, rather than just cutting positions, it’s a win-win.
Don’t necessarily rely on the ghost kitchen model for growth. It’s a way to improve efficiency while boosting revenue. Using existing resources to improve your current operation while adding a new sales channel.
Ready to launch your own ghost kitchen?
In the fast-moving world of ghost kitchens which is ever-evolving and ripe for even more disruption, it’s important to be nimble and adapt quickly while also having a long-term success mindset.
KitchenUp from Qu is specifically made to help restaurant brands make the most of the ghost and host kitchen model while remaining agile.
Because Qu was already building with a scalable, API-first cloud architecture from the get-go, it naturally lent itself to the ghost kitchen model as it grew in prominence.
Brands up and down the country are finding success launching new channels with KitchenUp. See how Genghis Grill used KitchenUp to launch their new virtual brand, Stir Fry Chef, in under 8 weeks, start to finish.
Get in touch with Qu to talk about launching your cloud kitchen quickly and efficiently!