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"shallow pandemic grave" | spooky kitchens #39
October 30th, 2022. The resurrection of eatertainment, the greatest short of all time(?), and a major cloud kitchen shutdown in SE Asia.
Happy weekend y’all,
First thing’s first: 👻. That’s all.
As a quick reminder, all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
sides for dinner
💀 Eatertainment's rotten, undead hand bursts from the ground of its shallow pandemic grave (“Eatertainment makes a comeback” Jennifer A Kingson, Axios). RIP (Rest In Punch), Punch Bowl Social, the once-unstoppable eatertainment chain of the future interrupted in its time, cut down too soon by the pandemic. Two and a half long years later and eatertainment is finally back, as clear a sign as any that dining culture is thoroughly re-balancing itself. As the weather turns chillier and much of the country loses the great outdoors as a place of gathering, the likes of axe-throwing, neon golfing, and barcades step up to provide more exciting indoor alternatives to the standard bars, breweries, and lounges. Ghost kitchens should be prepared for this continued shift back to in-person, experiential dining, while taking advantage of their own unique angle on the colder, darker seasons: “Too tired and depressed by the last rays of sunlight vanishing too soon in the day? Well don’t you worry, American consumer; your friendly neighborhood ghost kitchen is here to bring dinner for the whole family right to you!” Marketers may feel free to use that, or some close variation, as long as they send me a link to the campaign.
🤔 If REEF was traded publicly, would it be the greatest short of all time? (“Reef quietly exits Houston as the SoftBank-backed ghost kitchen continues to face operational issues and lose partnerships” Nancy Luna, Insider). First, let me be clear: I have no idea how shorts work (and this is not an invitation to instruct me). I only know that, on a very, very, very basic level, they’re a bet on a company doing poorly. And for nearly one entire year, REEF has been doing so consistently poorly – at least in the industry and public image – that the smart bet has become that they will continue that downward trajectory, if only by sheer momentum (though their current predicament is not only from sheer momentum).
I look forward to the day when REEF (or Softbank, on behalf of REEF) surprises everyone with a positive development. Don’t see it happening anytime soon.
🔒 Grab shuts down its cloud kitchen operations in one of its biggest markets (“Strait Up: Cold kitchens and hot new scams 😖” Nadine Freischlad, The Ken). For those unfamiliar, Grab is a heavyweight rideshare company that operates throughout southeast Asia. Its food delivery arm, GrabFood, dominates that industry in the region. And most relevantly to us, Grab is the operator of one of the largest ghost kitchen chains in the world, with almost 50 locations in Indonesia alone…until this week. Though Grab hasn’t explicitly stated what triggered the fairly sudden shutdown in an important market (Indonesia has some of the world’s densest cities), the writer of this newsletter (which is free, by the way, and worth a full read) cites poorly performing stock, poor strategic deployment, and never-staunched losses at a unit level due to volatile tenant (restaurant) occupancy and poor tenant performance. She also cites a report by Google, Bain, and Temasek that indicates increased retail mobility throughout the region – people are ordering delivery less, and going out to eat more.
Closing that many locations overnight is still odd, for a company as big as Grab. Other tech players in their position cling tightly to their locations, even the losing ones (see: almost all US ghost kitchens). I’d guess there were higher-level demands to cut costs and axe losing initiatives, immediately, lest that axe find a more executive target instead.
🤓 Atlanta looks to add "ghost kitchen" definition to zoning code (“Proposed Atlanta ordinance would 'try to correct' issues with ghost kitchens” Chris Fuhrmeister, Atlanta Business Chronicle). This is big “Is there homework tonight?” energy. Depending on what kind of ghost kitchen you are – or more precisely, depending on what sort of ethics your ghost kitchen company holds – the thought of cities officially recognizing ghost kitchens as a new, defined business model is either a relief or a nightmare. I’ll expand on that: it’s a relief to ghost kitchens that color inside the lines, and work with cities to open new sites as normal businesses do, a job that is often complicated by the newness of the concept and the lack of classification and defined set of paperwork within the bureaucracy. It’s a nightmare for ghost kitchens that like to operate in stealth, and just, kind of, “plop” kitchens hither and thither with an “ask for forgiveness, not permission” mindset (often forgetting the “ask for forgiveness” part). As more cities inevitably follow in Atlanta’s wake, it will be easier to open ghost kitchens in the future, but with harsher penalties for those looking to skate by unnoticed.
💡 A download on one of the Middle East's growing ghost kitchen players (“How foodtech startup GrubTech is working to transform online food delivery in the Middle East” Sindhu Kashyaap, Your Story). This isn’t news, per say, but it is an interesting read on one of the better-funded delivery tech operations in the Middle East, a market worth watching closely. GrubTech is a tech platform built to enhance delivery and takeout logistics at both restaurants and cloud kitchens (it’s a bit like an Otter, or KUOS, or Empower Delivery, though each have quite distinct bells and whistles). It’s raised $18.5M so far, processed over $100M in orders, and is looking to expand to Southeast Asia. The last section of the piece, which details the UAE as a market in broader scope, is particularly worth a glance.
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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