"Do! That! Math!" | spooky kitchens #36
October 1st, 2022. Expansions, fundraises, snafus. Another gorgeous week in ghost kitchens.
Happy Saturday y’all,
First thing’s first:
As a quick reminder, all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
(only, ever, and always) sides
😎 Europe seemingly gets the virtual brand & delivery platform the US wishes it had (“Not So Dark Raises $80 Million to Help Restaurants Thrive in Post-Pandemic World” Newfile, Yahoo Finance). Software: $5K. Virtual brand: $3K. Practical, hands-on setup and actual (actual) consideration for the day-to-day operation of those brands in your restaurant? Priceless.
“Not So Dark” provides proprietary order aggregation & menu management software, supplies apparently good-quality, low-impact, easily-assembled virtual brands, and perhaps most importantly, actually shows up at your restaurant to help you configure your kitchen to accommodate these changes. Does it work? I guess; at least well enough that it lasted the pandemic and earned a significant chunk of funding to expand. I remain dubious of all virtual brand purveyors, but the signs look more positive for this one.
⚠️ Clustertruck is pulling out of its Kroger locations (“Kroger is doubling down on its subscription delivery business as it weans itself off of Instacart. Here's a rundown of its other initiatives, from ghost kitchens to smart carts” Alex Bitter & Nancy Luna, Insider). The Kroger subscription delivery model is interesting and worth reading about, but I want to talk about Clustertruck, which features in this article. I don’t think it’s a coincidence that Clustertruck is “voluntarily” pulling its concept out of Krogers in Ohio and Indiana and that Kitchen United has tentatively announced additional Kroger partner locations in…Ohio and Indiana. It’s also odd that Clustertruck CEO Chris Baggott said the company is “not a fan of the pickup business,” considering that it is a far simpler and more profitable revenue channel for any food purveyor, unless you’re in a location that is inaccessible to guests, or otherwise struggle to attract them. Delivery-only ghost kitchens are tricky to pull off – I can think of none in the US that actually, truly have. Cloud and REEF, the two biggest ghost kitchens with multiple delivery-only and hybrid food hall builds, are publicly beset by myriad issues that go past the surface and down to the core of the model. The key point being, moving forward, is there enough delivery demand to sustain multi-concept, delivery-only kitchens?
Maybe there is. Clustertruck may not have expanded all that far, but it has kept its core locations chugging along. And ultimately I’m not suggesting that all delivery-only kitchens are nonsensical, but that the environment that is conducive to their success is very specific; much more specific than many folks in the industry seem to understand. Clustertruck may know precisely where they want to locate per their model and be doubling down on those sites.
Or, as I suspect, the company could be pivoting to less empoof a physical footprint overall with the launch of Empower Delivery, the sister company that may well become the dominant (perhaps eventually, the only) sibling. As I mentioned in a previous newsletter, a pure-software play looks awfully tempting to those who’ve been in this industry for long enough.
📈 JustKitchen expands virtual restaurant empire to Thailand through regional powerhouse GrabKitchen (“JustKitchen enters Thailand via GrabKitchen deal” Retail Asia). There’s not much more here aside from the financial details in the article, but JustKitchen continues to grow steadily in SE Asia. The company, based in Taiwan with sites in the Philippines, Hong Kong, and Malaysia, operates numerous virtual brands – both their own brands and licensed brands such as IHOP and TGI Fridays – from its kitchen spaces in a hub-and-spoke model (hub for food preparation, spokes for area coverage and quicker delivery). This year, JustKitchen also expanded into Singapore with two locations, and has signaled interest in the US (though no breakthrough has been made into this market, yet).
🧮️ Let's play "Do That Math!" with Smokey Bones' new virtual food hub (“Smokey Bones Doubles Down On Delivery With New Virtual Brands, Online Storefront” Joe Guzkowski, Restaurant Business). Welcome to my hit new mid-newsletter game show, Do That Math! where I simply present a series of interesting facts, then ask our contestants (you, dear readers) to…do! That! Math! Ready? Here we go: (1) Kitchen United Mix has facilitated ordering from multiple brands off a single website, as a core function, since their doors opened. (2) Kitchen United Mix’s current tagline is “Multiple restaurants. One spot. One order” and a former tagline is, “One spot, all the eats.” (3) Smokey Bones operated out of Kitchen United’s Chicago Mix locations for a couple years, but the Mix website no longer lists Smokey Bones in Chicago. (4) Smokey Bones very recently launched Bite Hall, a virtual restaurant hub where customers can order from multiple Smokey Bones brands in one order. (5) Bite Hall’s tagline is, “All the bites in one site.”
Okay y’all, that’s all the info you get. Now get ready, get set, and do! That! Math!
(Obviously Kitchen United does not own the rights to the general “get a bunch of different food in one spot” benefit of a virtual food hall, but this seems to me to be a fairly straight line from one brand, and one idea, to the other. It’s mostly irksome that the article says Smokey Bones “came up with the idea of a single online storefront that would house [all their brands].” One wonders from whence the bolt of inspiration came!
But hey, we’re all doing the math – maybe yours adds up differently. Good luck to Smokey Bones making this work with mostly chicken-related concepts).
🙃 You’re kidding, right (“Ghost kitchen startup Reef is facing new trailer shutdowns and violations. Insiders have long said it skirts health and safety regulations.” Nancy Luna, Insider). Do you think in the REEF HQ they have a big red button that plays this song and alerts the team to send out a new kitchen trailer when one gets shut down? Do you? Because I do.
🤯 Zomato’s inter-city delivery service (you read that right) is live, and it’s wild (“Zomato says confident to make profit from inter-city food delivery” The Economic Times). Last week we read that Zomato was cracking down on cloud kitchens (“cloud kitchens” is the general term in India, predating the company CloudKitchens) that operated more than 10 brands – and up to 200 – out of a single kitchen; which seemed like a pretty good, pragmatic thing to do. This week, we learn that Zomato is operating an inter-city delivery service – that is, delivering food from restaurants in one city to the customer in another city. Airlifting it, to be exact (this service is exclusive to cities with airports). The food is refrigerated for transit but not frozen (as GoldBelly does it), then reheated by the customer upon delivery. And as the article immediately mentions, Zomato sees imminent profitability for the service despite “concerns of the service being a logistical nightmare and a high cash-burn model.” I just can’t help but wonder what the hell those delivery fees look like.
How long do you think before someone in the US attempts this? Feels particularly like an Uber play to me.
🤔 Uber announces “industry first”(?) Toast & Clover POS integrations…? (“Uber Announces Toast, Clover POS Integrations” Tom Kaiser, Food On Demand). Speaking of Uber, here’s a weird announcement on a couple levels. First, who’s doing a press release about POS integration in 2022? It’s so 2020. And second, which part of this is an “industry first?” The combination of Toast & Clover? Because I’m pretty sure both of those have integrations with other third-party delivery providers. It’s probably that. Still confusing, and still late to this particular party.
That’s spooky kitchens.
P.S. If you’re just jumping into ghost kitchens and want to learn more, check out my ghostly glossary and spooky kitchens ghost kitchen cheat sheet. They’re there to help make sense of this weird and wild west.
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