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Dark Kitchens, a New Restaurant Business Model

Posted on 03/03/2022

Dark kitchens are no longer an emerging business concept, its fair to say they have been disrupting traditional kitchen models for the past few years. However it is due to Covid restrictions that the trend has really taken off. Today we will discuss the basics of Dark Kitchens, Why this new model is so beneficial and how Chained restaurants can uniquely take advantage of them.

Dark kitchens (or Ghost/Cloud kitchens) are a new delivery and takeout business model, highly efficient kitchen units that do not have a storefront or seats to dine-in and are solely used for delivery. They are set up, usually just outside of city areas, with large kitchens, multiple chefs and few staff to manage orders in and out passing the majority of dishes onto delivery drivers.  

The Dark kitchen market is forecast to reach $2.63 billion by 2026. 

The benefits of Dark Kitchens.

Dark kitchens take advantage of changing eating habits, with Covid restrictions and the increasing trend of take away food as opposed to dine-in. Internet based technologies are prevalent in many areas of our lives now and this trend is not limited to restaurants. Estimates for UK food delivery revenue are looking to top $10 billion so this is a trend that is looking to increase year on year.

Dark Kitchens reduce costs most significantly costs associated with property, simply due to the fact that they do not need to compete in city centres by using more expensive city real estate. The business works by using delivery services and this is a big advantage. Additionally the reduction of onsite staff, waiters, bar tenders, administrators all leads to a higher profit margin.

Models

Different variations on the Dark kitchen Model have been seen to produce success depending on requirements and needs.

The Original Dark Kitchen: this model is where one brand owns or rents a single kitchen location with out any dining- in areas. With one brand using the kitchen, these businesses effectively act as additional kitchen space able to supply large amounts of food for delivery without the need to also cater to dine-in restaurants.

Multi-Brand Kitchen: In this setup, multiple brands operate within one kitchen. The success of this setup is that costs are reduced and shared aswell as multiple brands being able to use data analytics to supply the most popular meals based on local demand for each brand. This does however rely much more on the skills of the chefs and the technology for taking orders digitally.

Aggregator - owned dark kitchen: Delivery aggregator channels are also using their own dark kitchens, offering kitchen space and infrastructure that is available to rent and there may be many small kitchens operating within one larger kitchen. In some instances these businesses benefit from the delivery aggregators fleet and online ordering. Additionally it requires significantly less risk and capital. These models vary a lot too, with different set ups to suit many businesses ie. Some have chefs included. 

How can chain restaurants benefit from Dark kitchens?

These business models effectively act as additional kitchen space able to supply large amounts of food for delivery without the need to also cater to dine-in restaurants. This frees up capacity in the restaurants which chains use so they can more effectively serve dine-in customers as well as more aggressively use delivery channels.

Dark kitchens allow for tailoring to location-based preferences to supply the most popular meals based on local demand for each brand. Allowing the Dark kitchen to increase profit and reduce stock levels of less popular dishes with increased locality.

Suppling food specifically for delivery reduces overheads due to location and less staff increasing the profit gained.

Dark kitchens can act as extensions of the chained brand, able to test menu concepts much easier in a controlled environment and much easier tracing of data analytics due to the online only solution.

 

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