Ghost kitchens won’t replace in-venue dining, though they’ll leave their footprint on the hospitality industry nevertheless.
Sensationalism is the age old frenemy of change. A single innovation can simultaneously be the greatest thing since sliced bread or the end of the world as we know it.
Exaggeration creates misconceived notions around the topic in question, more often than not to get those coveted clicks. The truth is more likely to earn a yawn than destroy mankind.
In the culinary world, ghost kitchens have found themselves at the apex of this duality; they’ve been heralded as the savior of modern dining and its destroyer. The truth is neither, yet both at once. These cloud kitchens are the result of change going back years from now, and exist as a partnership with established in-dining rather than an enemy.
The global market for ghost kitchens and virtual brands was $43.1 billion in 2019, already on track to take its own share of the market before the pandemic hit. However they’re now on track to be a $1 trillion business globally by 2030. Although this swell seems alarming and more like a marauding army than a business shift, keep in mind that the restaurant industry net worth is not a static number. In 2021, there’s expected to be an impressive increase in global industry net worth. This correlation is not an accident.
To fill a specific niche that in-venue dining only partially inhabits, these low-cost kitchen rentals are able to deliver specific meals with more frequency and focus than a traditional in-venue restaurant. But this isn’t because they’re intrinsically better- it just means their focus is on a different portion of the industry.
In 2018, over 200 million Americans visited a sit down restaurant. In-venue dining is a part of not only our culture, but a global one at that. Delivery has its place and, although we’re hyper-focused on it during the global pandemic, cannot compete in the same way as the sit-down experience. In fact, the statistics agree that overwhelmingly when given the option, guests would rather order at the table rather than from their own homes.
There’s no need to fear market cannibalisation; this is not an either-or argument. Rather, this is a new terrain stemming from a clear consumer need. In-venue stands on the atmosphere and community setting of at-table seating, while cloud kitchens hang above in their own space with cutting-edge delivery and digital optimization. One doesn’t overshadow the other, they sit in compliment. In fact, the two would do well to learn from one another as the field continues to grow.
And we understand, news on the ghost kitchen front can be daunting with big budget investment headlines. In fact, with uber founder Travis Kalinack making a huge bet on the industry through his venture ‘CloudKitchens’, it can feel like the ride-share war is moving to a different locale. But in reality, this venture is in competition with other ghost kitchens, not in-venue.
We can see from how Uber Eats has been functioning with delivery that this is an easy leap to sit-down doom and gloom. But CloudKitchens still won’t have in-venue, and the premise of the concept is to take advantage of the pre-established delivery options. It’s a bet on the expansion of the Uber delivery premise, not against more traditional seated restaurants.
Dine-in isn’t going extinct. While it’s faced pressure from pandemic lockdowns and the rise of delivery platforms, dine-in consists of a set of experiences that themselves cannot be replicated by off-premise ordering. In fact, in-venue has its own set of tricks to delight and wow guests that ghost kitchens can only dream of replicating.
We at Bbot are excited by the matching evolutions of both ghost kitchens and in-venue dining as the global market revenue continues to grow. And who knows: maybe there’s a third dark horse just waiting for its moment to introduce itself. After all, innovation never sleeps. But it does eat.