spooky kitchens #2: 1/14/22
Happy Friday y’all,
It’s official: spooky kitchens is more than a one-hit wonder. It’s a two-hit wonder.*
To quickly recap what’s going on here: this weekly ghost kitchens newsletter is in “soft launch” mode through January. Then starting in Feb, we’ll shift gears to a paid subscription (for $5/monthly or $3/month annually) for the weekly issue, with a monthly issue for free subscribers. That’s the plan at least — we’ll see how it all shakes out as we go.
In the meantime, general feedback on the content, design, and any weird email hiccups you encounter is appreciated…
…to an extent. 👻
Now, to the news:
So what happened this week? (TL;DR)
Our features this week are the official opening of Kitchen United’s first Kroger location, as well as a visit with local news outlets as they discover their new ghost kitchen neighbors.
Today’s Sides include baby Friday’s, a nearly profitable delivery company(!), and… Muncheechos. That’s right. Muncheechos.
Before we dive in, if you need a refresher on who the major ghost kitchen players are and how it all works (or you just want to know what “mis-en-place” is), take a look at my spooky kitchens industry cheat sheet and ghostly glossary.
Ready? Great. Fire Muncheechos!
introducing: the ghost kitchen grocery. the spooky supermarket. the…spoopermarket.
Why ghost kitchens and groceries just might work (Joe Guzkowski, Restaurant Business)
A 10-for-1 deal! The inaugural Kroger + Kitchen United location opens in LA with ten brands, including primaries Fresh Brothers, Sajj Mediterranean, bushi by Jinya, and Dog Haus, as well as six more virtual restaurants (mostly by Absolute Brands, the Dog Haus parent company). The Ralph’s supermarket is in Westwood — a bougier part of LA — directly across the street from the UCLA campus. The importance of location cannot be understated for any ghost kitchen, and between the wealthy locals, high foot traffic, and surplus of hungry college students, this is a good one.
More Casper than Poltergeist. Notably (as called out in the article) the location features the bright colors of the MIX brand, visible kitchens, and big signage. There is, as Joe writes, “nothing ghostly about it” — a far cry from the origins of the terms “ghost kitchen” and “dark kitchen,” inspired by the secrecy and invisibility of most delivery-only restaurants. But secrecy can only take you so far, and inevitably, as both Cloud Kitchens and Deliveroo learned the hard way, questions will be asked. And depending on the answers, exposes written. Ultimately, ghost kitchens and virtual brands alike are learning that a digital-only footprint has its downsides.
Who’s next? There are already two ghost kitchen + grocery combos out there…with asterisks. Clustertruck (a vertically-integrated “delivery-only kitchen”) opened a few locations with Kroger, and Ghost Kitchen Brands is in Walmarts across the US and Canada — but Walmart isn’t a grocery grocery, so it only half-counts by playground rules. Other than that, mum’s the word on further grocery deals with major ghost kitchen operators, so this may be it for a while. (*smash cut to tomorrow’s surprise announcement that REEF is opening simultaneously at every Piggly Wiggly in the country*)
Congratulations! I know a whole bunch of people worked very hard to make this happen (including yours truly for a little while), and now it’s open. Well done, y’all. And yes, to maintain journalistic newsletter-composeristic integrity, I will be congratulating every ghost kitchen company on every landmark opening from here on out. Because that’s how that works.
Related reading:
Kroger’s press release. I always find it interesting to read what companies choose to write about themselves. In this case, the fact that they mentioned “additional locations…within the month” stands out. Looks like a busy Q1 for KU.
Kroger is bringing ghost kitchens to stores in Texas with Kitchen United Mix (Maria Halkias, Dallas Morning News) DMN dug a little deeper into the briefly-mentioned "additional locations in Texas” from the release. They found that there are probable KU/Kroger locations in Dallas and Houston, and “free-standing” locations in Plano and Frisco. Keep a weather eye out for an influx of delivering ghosts, Texans.
what do locals say about ghost kitchens?
In my browsing, I see a lot of local headlines about various ghost kitchens opening in mid-sized or smaller towns across the US and Canada. Usually I skip over them, but this week I got a little curious to see what folks think of their new virtual neighbors. Welcome to Twin Falls, ID and Rochester, NY.
10 Twin Falls “ghost kitchens” and where they operate out of (Courtney Salmon, KLIX News Radio). In which a local reporter discovers that 4/10 of the ghost kitchens (virtual brands, really) on their list are located in…Red Robin.
“The Wing Dept: I am surprised we have so many wings options. This chicken wing place is out of Red Robin.”
“Donato’s Pizza: Edge-to-edge pizza full of toppings, this place is serving out of Red Robin as well. You can actually order in the brick-and-mortar location for this place.”
“MrBeast Burger: They serve pressed burgers out of Red Robin. They have different named burgers after different people in their family.”
“Chicken Sammy: This one is also located out of Red Robin. Red Robin must have some great diverse cooks. They have chicken sandwiches, I know, shocking. Also looks very good.”
5 ghost kitchens that are no longer a secret in Rochester…including a new one (Jessica Williams, KROC) “The only reason why I'm aware of the term "ghost kitchen" is because I've got teenagers. My boys are filling me in on the latest new things.” Love. Jessica goes on to learn where Burger Den and Tender Shack are made (Denny’s & Outback), discover a new virtual kitchen “made in a…gym?” and hype up a whole separate article for MrBeast Burger as made by “Perkins!”
Takeaways: Turns out it’s mostly pointing out where virtual brands are actually made. If we’ve learned one thing, it’s that transparency is important! And ultimately doesn’t seem to diminish the curiosity and enthusiasm for the brands — if anything, those feelings seem heightened.
I’ll also note that I was initially going to include review quotes — but was quickly reminded that it’s nearly impossible to find reviews because one fun feature of virtual restaurants is that in addition to no physical footprint, there’s rarely a digital footprint specific to each location. As someone whose family owns and operates a restaurant, that sounds like…a dream. A beautiful, Yelp-less dream.
sides
🦸🧤 Delivery Hero finds the path to break-even (Ivan Levingston, Bloomberg). The mostly-European-based delivery company announced its acquisition of fellow multinational delivery firm Glovo at the end of 2021, then announced a sale of shares in Rappi (a Colombia-based delivery company), and finally that it was on the track to breaking even within months. What’s that? A delivery company breaking even? Novel!
For more on delivery companies and profitability, check out this Deep Dive on the subject from Restaurant Dive’s Julie Littman.
⛔️ REEF partners with Denny’s and also abruptly closes nearly 100 locations (Aneurin Canham-Clyne, Restaurant Dive). The whiplash on this. WHEW. Poor REEF just can’t catch a clean break — but then again, I’m not sure it’s earned one just yet. It is a signal of both momentum — there are still plenty of brands enticed by their franchise value prop (lots of locations, high franchisee royalties, and did I say franchise?) — and progress. Yes, they closed lots of sites, but they have lots more; and it takes a kind of maturity, at any stage of a company, to stop something that’s just not working. REEF is down but not out (see the Sides section of last week’s issue to catch up on the “down,” though).
👼 TGI Friday’s unveils small-format “Fridays on the Fly” concept (Joe Guzkowski, Restaurant Business). The latest in casual chains adapting themselves to our off-premise present and future. All the “great food” of TGI Friday’s, just less of the “exciting atmosphere” of TGI Friday’s (also, lower build costs).
Other recent restaurant reformats include:
Applebee’s & IHOP (Dine Brands restaurants)
🔦 Uber Eats' head of dark kitchens joins C3 as Chief Strategy Officer (Emma Liem Beckett, Restaurant Dive). The new CSO’s goal is to “turn the company into a household name,” as stated in the release (and pointed out w/ other insights in the article). A “household name” is definitely a good, if steep, goal for the company that’s brought us “Creating Culinary Communities,” the abbreviation “C[exponent that my word processor cannot render]3,” (that is supposed to be pronounced “C three” and not “C cubed” despite its formatting) and the app “GO by Citizens.” Best luck, Mr. Mehran.
By the way, if Uber Eats’ dark kitchens division is news to you, that’s because it was mainly an international venture (hence “dark kitchens”) while it was active. They did open a kitchen in France back in 2018…before closing it in 2020. As far as I’m aware, there were no further attempts at kitchens by Uber Eats, anywhere.
🤸♀️🍽 Flipdish grows a horn with $1.25B valuation (HospitalityNet). The latest unicorn in food tech and online ordering after a $100M round led by Tencent. I hear if you drink the blood of Flipdish, you’ll live forever. It’ll be “a half life…a cursed life…” but you will have lots of money, so… balances out?
🍪🧝♀️You can order Girl Scout cookies on Doordash this year (Jelisa Castrodale, Food & Wine). No thoughts, just a very important PSA…and okay, one thought: maybe the most exciting partner announcement I’ve seen from a delivery co in a long time. Pretty big get for Doordash.
💲↗️ Rapidly rising food prices may give restaurants an edge — here’s why (Amelia Lucas, CNBC). This one’s a little difficult to wrap my head around — here’s why: food-at-home costs have risen 6.5% and food-away-from-home costs have risen 6% YOY, as demonstrated in the article. A 0.5% gap cannot be noticeable enough for consumers to be actively choosing to dine at restaurants more, right? Not when a restaurant meal is already (probably) more than 0.5% more expensive than a meal cooked at home. Maybe, if given enough time or if that difference increased, behaviors might change meaningfully. But for now, despite what the charts say, I don’t think that edge is much of an edge at all.
😜🚬 Cheech [of Cheech & Chong] creates ghost kitchen with ‘stoners’ in mind (Fast Casual). “This model allows pre-existing restaurants that are struggling to become Muncheechos providers,” Neil said.
That’s it. I just wanted you to read that sentence today.
who’s the spook?
The hood is pulled back, the snarling, grotesque mask torn away, and the Mystery Team reveal — me! I’m Mitch.
The TL;DR version of my story is: I worked in the ghost kitchen space since nearly its American inception, and now I write distilled summaries of the weekly industry news — the best possible use of all the incredibly niche knowledge stored up in my head.
(You can read the longer version of my story in my “boo-o”).
And that’s spooky kitchens.
See you on Fridays.
Boo ✌️,
Mitch
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 (and frequently updated) to help make sense of this weird and wild west.
*Now let’s not make it a three-hit blunder.