"😳" | spooky kitchens #37
October 7th, 2022. Jay-Z invests in Stellar (aka "New Zume"), a virtual brand CEO says the quiet part out loud, and Cloud's secret lobbying squad.
Happy Friday y’all,
First thing’s first: lost of italics in this one. 🤷
As a quick reminder, all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
(just a few lil’ old) sides
💸 Jay-Z's investment firm gives modest bump to robo-pizza-truck maker Stellar, aka "New Zume" (“Pizza robot truck startup Stellar snags $16.5M from Jay-Z” Aneurin Canham-Clyne, Restaurant Dive). Second time’s the charm! Surely a few tech bros from SpaceX can break the pizza industry where an army of Zume techies backed by 375M Softbank dollars failed…with the exact same solution. What could possibly go wrong?
Zume still exists – most likely because Softbank didn’t want to entirely fold on its $375M gamble – but pivoted away from automated pizza / food truck / better-delivery to “compostable molded fiber packaging.” Stellar may want to have a backup plan.
🦸 Oomi Digital Kitchen is a member of a hopeful new club of ghost kitchens 2.0 (“Decrying Influence of ‘Tech Bros,’ OOMI Digital Kitchen Launches in Dallas” Tom Kaiser, Food On Demand). In a unique turn of events for this newsletter, I had the pleasure of chatting with Oomi Kitchens CEO Markus Pineyro myself this week. I’m usually cautious about these conversations; wary of, frankly, what Markus himself talks about in the article above, potentially wasting my time hearing yet another pitch from yet another tech bro who thinks he can solve ghost kitchens, or restaurants as a whole. But with Markus, those concerns were unfounded. He’s a longtime hands-on restaurateur who grew his single restaurant into a chain, and steadily, successfully added technology and expanded off-prem elements where they fit and made sense. He and the rest of his team seem to bring the same thoughtfulness and wherewithal to Oomi, which as a concept strives to succeed and/or improve where Gen 1 ghost kitchens (Cloud, REEF, Kitchen United) have failed, or struggled.
I’ll have more to say on Oomi & the rest of the new crop of ghost kitchens in a near-future issue, but suffice for now to say that the company is well worth watching – and definitely don’t mistake Mr. Pineyro for yet another tech bro.
❓ Byte Kitchen poses a question more food tech companies should be asking (“‘We’re not trying to disrupt the industry’: How a Y Combinator-backed food hall startup is bringing a ghost kitchen alternative to the Peninsula” Kate Bradshaw, Palo Alto Online). The article mentions a question that Byte Kitchen co-founder Divyang Arora keeps in mind: “Why haven’t food tech companies been able to earn restaurants’ trust?” Which is great, really — just that they’re thinking of that question is a big step. The answer that they give almost lands: “"The restaurant business has always been hard…I think the pandemic just … brought it out in the open." What I would tweak is that the difficulty of restaurants has not only always been hard, but it has always been out in the open. People just don’t think about – and in this case, “people” includes most restaurant tech companies.
Now, plenty of tech companies understand restaurants’ problems. They may, like Byte Kitchen, even understand that the business is hard. However, that’s as far as the buck usually goes – and it’s not far enough. Because to truly “get” restaurants, you have to get them on the ground level. You have to “get” that day to day to day restaurants are hard, not just in general, but in a myriad and variety of ways both routine and unexpected. A restaurant being approached by vendors is like a student overwhelmed with homework from all their teachers: where each teacher assigns the homework that makes sense for their own class, but in a way that feels to the student to be ignorant of all the other work they get from all the other teachers. Restaurants get “solutions” from tech companies and other vendors that function in ignorance of all a restaurant’s other problems – and it’s up to the individual restaurant to piece these solutions together. And they do not have the time for that.
So if you really want to (A) create a product that actually works for restaurants, and (B) sell that product to restaurants with less resistance, do the work. Learn what it’s really like to operate, day to day. Take in the whole experience, speak the language, and importantly, figure out how your product fits in with a restaurant’s entire operation – not just how it solves a single problem. Because that’s work you’re doing for the restaurateur, and that will be appreciated.
Anyway, Byte Kitchen is a Bay Area ghost kitchen startup. They’re starting from an earnest place – we’ll see where they go from there.
😵 Nothing says “growing & innovating” like teaming up with a company called "Gzooh" (“C3 Teams Up with Gzooh Kitchens in Canada” Tom Kaiser, Food On Demand). It is incomprehensible that not only does Gzooh not list “Why is your company called Gzooh?” or “What does Gzooh mean?” at the very top of their FAQs, but they do not list those questions at all, nor do they explain this bonkers name anywhere on their website. Anyway, they now cook C3’s brands in their kitchens – not a particularly huge expansion.
🙊 Virtual brands finally admit they're cash-grab garbage, announce plans to strive for quality (“Virtual Brands Are Entering Uncharted Waters” Joe Guzkowski, Restaurant Business). I saw the following quote from this article (by Virtual Dining Concepts CEO Stephanie Sollers) shared on LinkedIn: “It’s not just a brand with a menu and a logo anymore…We will be thinking about building long-term value and emotional relationships with our customers.”
It means the “uncharted waters” of the title are, in fact, the uncharted waters of serving an actually quality product. It means that VDC knows and understands that they have been selling “just a brand with a menu and a logo” to restaurants all this time, not intended for any long-term success or even for serving a product a consumer might want to eat again. And they’re just starting to think about the long-term and a relationship with the customer.
All this would make me think twice about dealing with VDC (if I did, which I don’t), both because they knew the real value of their brands/products for so long and continued to prop them up as easy-peasy revenue-driving solutions to restaurants looking to make some more money; and because, again, they’re just starting to move in a long-term / quality direction. So while they take their time figuring out what a restaurant, or food brand, is beyond a menu and a logo – golly, what else could there be to a dining experience? – I’d try other solutions than virtual brands to add a few dollars to the bottom line.
(P.S. I know this is mostly about VDC, just one virtual brand company – but understand that I don’t think any virtual brand company actually purveys brands intended for long-term success or enjoyable consumption. But hey that’s just me – if third-party virtual brands float your boat, enjoy your mediocre-a** YouTuber-ger.)
🤝 Grubhub x GoPuff partner up (“Grubhub and Gopuff team up for grocery and alcohol delivery” Aisha Malik, TechCrunch). Grubhub needs GoPuff more than GoPuff needs Grubhub – but both of them certainly need each other. GoPuff has had a nasty summer, and Grubhub a nastier…well, last couple years. The two are complementary (which you can’t say about all partnerships like this): GoPuff has not been on a third-party platform to date, and Grubhub lacks the dense convenience store options of DoorDash and Uber Eats. Given the state the company must be in to make this first jump to third-party, in my opinion it is likelier than not that GoPuff will also wind up on the other two major platforms within the next year.
🤫 Secret CloudKitchens’ secret lobby squad secretly lobbies to expose third-party delivery's secrets (“Travis Kalanick-linked lobby group to fight food delivery apps” Dave Lee, Financial Times). Do you think the judge asked the Digital Restaurant Association if they recognize the stupendous irony of their endeavor? The DRA exists to relinquish third-party delivery’s still-ironclad grasp on ordering and customer data – of course not for the good of restaurants as a whole (a great many of whom have no use for that) but for the good of CloudKitchens, specifically. The DRA has very close ties to Cloud and its CEO Mr. Kalanick, and with that, a practically limitless budget to realize their goals. However, third-party delivery obviously have their own lawyers, and their own resources – this is a heavyweight bout, unlikely to be resolved anytime soon.
💩 Do you think there's even a single issue of this newsletter that doesn't mention REEF, or...? (“Leaked video: Ghost-kitchen startup Reef's CEO calls upon employees to report violations of city health and permitting rules to a company hotline” Nancy Luna, Insider). I’m sure there’s an element of this “town hall” address from REEF CEO Ari Ojalvo that is earnest. Some, you know, small, teensy element. However, the text of it — Ojalvo asking employees to come forward or call a company hotline with with potential permit violations — mainly comes across two ways: (1) condescending, as he explains the importance and purpose of health and building permits to his employees who presumably handle such things far more hands-on than he ever does, and (2) ass-covering (😳) as he implies that the company has only suffered its recent slate of permitting-busts and bad press because employees didn’t raise concerns to higher-ups.
Things like this happen in a company like REEF because there is immense, unignorable, threatening pressure from higher-ups to get sites open and keep sites open, for cheaper-than-cheap, no matter what ground-level operators have to do to achieve that. That expectation is usually made unmistakably clear. It’s not because some accidents happen, or steps are being skipped “just cuz” by local employees. If REEF, and its CEO, really wanted to address these issues and move forward, they should start by taking responsibility for these issues, and pressures that cause them, at the highest tiers of the company.
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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