In the era of convenience, food delivery services have become a significant part of consumers’ regular habits.
Grand View Research estimates the value of the global online food delivery market to reach nearly USD 388.74 billion by 2028, with an impressive 10.8% compound annual growth rate between 2022 and 2028.
This new food industry trend and untapped demand have paved the way for a new business model — dark kitchens.
The dark kitchen, also known as a cloud kitchen, virtual kitchen or ghost kitchen, is an appealing alternative to traditional brick-and-mortar restaurants, offering a cost-effective solution with improved scalability and flexibility.
So what is this new business model, and how can dark kitchens help the food industry?
What is a dark kitchen?
A dark kitchen is a fully-equipped commercial kitchen specialising in producing food exclusively for delivery, without dining areas or customer seating.
Think of it as a kitchen space for hire where food entrepreneurs can rent or buy space and equipment for food preparation and delivery.
You might have seen alternative names for this business model, such as a virtual restaurant, cloud kitchen, takeaway kitchen, delivery-only restaurant, or ghost kitchen.
These terms refer to the same concept — a physical space that lets businesses provide delivery-only takeaway food services.
How does a ghost kitchen work?
A dark kitchen enables restaurants to reach more people with their food offerings with significantly lower overhead costs for rent and staff.
The process is straightforward:
Restaurants create a menu and decide what type of food they’d like to offer;
Restaurants list their products on a delivery app;
Customers can then order and pay for the food online;
A delivery driver will collect and deliver the food directly to the customer’s door.
This business model provides an excellent opportunity for restaurant owners to enter the food business by taking advantage of a food delivery app.
The rise of cloud kitchens
Dark kitchens have operated since the early 2000s. However, it wasn’t until 2020 that the dark kitchen concept began to catch on globally.
Due to the COVID-19 pandemic, this industry has become a significant growth driver for the food delivery market.
With lockdowns and social distancing, ghost restaurants have become more appealing for businesses wanting to continue food services without worrying about regulations, health and safety, or customer seating.
But it’s not only the restaurant industry that welcomed this shift. Even after the pandemic subsided, dark kitchen has continued to be an attractive option for consumers.
This is because of the increased demand for convenience due to busy lifestyles and the growing popularity of delivery services.
Data shows that the global market size for the dark kitchen was valued at USD 56.71 billion in 2021 and is projected to reach USD 112.53 billion by 2027.
Benefits of dark kitchens
We’ve briefly mentioned some of the advantages of the dark kitchen. Let’s dive in a bit deeper and explore the benefits of the dark kitchen business model for restaurants.
Lower start-up and overhead costs
Dark kitchen requires much lower startup costs compared to a traditional restaurant.
Unlike brick-and-mortar restaurants, businesses don’t need to invest in large dining areas, furniture, and decorations. Likewise, overhead costs, such as rent, utilities and staff, are significantly reduced.
This makes ghost kitchens an attractive option for startups or small businesses wanting to remain competitive in the food industry without breaking the bank.
As dark kitchens are delivery-only, businesses have the potential to expand their services around town and globally without opening new physical locations.
This scalability helps companies reach maximum profitability faster than traditional restaurants, as they don’t need to wait for customer footfall or build brand loyalty.
A significant part of dark kitchen revenue comes from delivery services. A third-party delivery platform such as Bolt Food provides access to partner portals where restaurants can check their sales, ratings, and orders and compare them to previous weeks and months.
Through the partner portal, restaurants and stores can access powerful analytics. Reports show when a business receives the most orders or which items are selling the best — which helps with resource planning.
So, if you’re interested in opening a dark kitchen, here are a few tips to get you started.
Pick a concept and build a brand around it
This isn’t exclusive to ghost kitchens. All businesses should have a clear brand concept they want to bring to life.
Do you want to specialise in one type of cuisine, or will you offer a variety of dishes? Do you focus on healthy food options, fast-food meals, or something else entirely?
Ensure your concept is reflected in all aspects of the business, from the menu to branding.
Choose your location wisely
You might think that since the kitchen’s closed to customers, location doesn’t matter. But it does, and some might argue that location is even more critical for dark kitchens. Why’s that?
Simply put, the location of your dark kitchen determines how many customers you can reach.
Shadow kitchens typically rely on third-party delivery platforms, which display restaurants closest to the customer’s location. So, if you want to maximise visibility, look for places located in densely populated areas.
Gather the necessary tools and gadgets
Investing in the right equipment for your specific concept and menu is important. Depending on what you plan to serve, you might need pots, pans, fryers, and ovens.
Additionally, ensure you have the necessary gadgets to help streamline operations. This can range from kitchen software to delivery tracking systems.
When choosing Bolt Food as a delivery partner, the only gadget your ghost kitchen needs is a tablet. Launch the Bolt Food app on your device, and your team can start accepting, managing, and tracking food delivery orders in real-time.
Up your online presence
Digital marketing and online presence are key to the success of all business types, including brick-and-mortar ones. However, for dark kitchens, it’s essential.
Cloud kitchens don’t have the luxury of relying on walk-ins, so investing in digital marketing is essential.
This means having a website where customers can find out more about your business, being active on social media with engaging content, and responding promptly to customer questions or complaints.
A: A ghost kitchen, also known as a dark kitchen or cloud kitchen, is a restaurant without any dine-in seating. It typically operates solely to prepare food for delivery and takeout orders.
Q: What are the benefits of dark kitchens?
A: Dark kitchens have several advantages when compared to traditional brick-and-mortar restaurants. These include lower overhead costs and increased scalability.
Q: How do I get started with a ghost kitchen?
A: The main steps for getting started include researching your concept, finding the right location, and gathering the necessary equipment. Additionally, focus on marketing and choosing the right delivery partner.
Q: How do delivery services benefit ghost kitchens?
A: Delivery services provide ghost kitchens with the reach and visibility needed to be successful. A dark kitchen with a reliable delivery partner can increase its customer base, save time and resources, and provide better customer service.
Q: What should I look for in a delivery partner?
A: You want to look for delivery services that offer fast delivery times, reliable customer service, extensive reach, and marketing support.
Ready to start your ghost kitchen?
Cloud kitchens come with their own set of challenges and opportunities. But, with proper preparation and planning, it can be a rewarding experience.
And when it comes to choosing a delivery partner to make your restaurant successful, Bolt Food is here to help.
Filling out the signup form takes five minutes, and our team will be in touch shortly with all the extra details!