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"The ecstatic return of Spice with a Y" | spooky kitchens #40
November 12th, 2022. More promise for tomorrow's to-go restaurant industry, KYLO (Ren) Food Hall's ho-hum opening, and Sweetgreen goes full automaton.
Happy weekend y’all,
As a quick reminder, all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
🤖 Sweetgreen fulfills its destiny as a tech-food (vs food-tech) company, goes full robot (“SWEETGREEN TO TEST FULLY AUTOMATED RESTAURANTS NEXT YEAR” Lisa Jennings, Restaurant Business). At last, the return of Spyce! It’s spice, with a Y! Get it??
Everyone’s favorite (well, at least Daniel Boulud’s favorite) MIT project-gone-restaurant finally rears its head again after a couple years on the DL post-acquisition by Sweetgreen. As a robotics company, Spyce attracted notice by aiming to automate the entire kitchen process; not just specific tasks. A bowl-focused menu at least partially designed by M. Boulud gave them culinary creds, but the company closed both restaurants in the last year to go all in on Sweetgreen. We’ll see how it goes.
💕 Kroger & Kitchen United take their relationship one state further (“Kroger to add ghost kitchens to three Ohio stores” Sam Silverstein, Grocery Dive). Not much to comment on here, just an expansion of an apparently working concept. With a lineup like Nékter Juice Bar, Saladworks, Hardee’s, Capriotti’s, and Pei Wei, Kitchen United is practically the modern, condensed equivalent of a mall food court, to-go (just add Hot Dog on a Stick and the portrait will be complete).
🤞 Next-gen ghost kitchens & virtual brands promise to capitalize where the oldies couldn’t (“The next generation of ghost kitchens is stepping out from the shadows” Joanna Fantozzi, NRN). All right, to kick off, IMO there’s not really enough about the “next generation” of ghost kitchens and virtual brands here, as the article makes plenty of room in the back half for REEF and Nextbite to come in and say they’re definitely, definitely onto the zeitgeist and going to change soon and that things aren’t as bad as everyone says they are(!!). But hey, it’s not my article (that’s coming soon) and it does give Oomi and newcomer Meal Outpost plenty of space at the top to dish about what’s different, which is super.
I’ve already talked a bit about my anticipation and hopes for Oomi, and it’s great to see CEO Markus Pineyro speak more to the philosophy behind building the company; a philosophy that is similar to that of virtual brand co Meal Outpost. For Oomi, there’s obviously still proving to be done, but the signs are looking positive.
Meal Outpost, a new virtual brand facilitator by (my ex-Kitchen United teammates) Dustin Mares and Christopher Washington, also learned from its bigger, colder predecessors, focusing on pairing capable host restaurants with virtual brands built by other restaurants to be easily implemented, sustainably successful, and, wow, this may be a reach but…good-tasting. Swinging for the fences!
All of which feels to me like exactly the way an industry should evolve. Gen 1 businesses, starting up and operating in a blank white space, fumble around with models and concepts and ideals before finding a direction that kind of works but mainly attracts funding, compete for that funding, and ultimately share the benefits of being among the first to do what they do while manacling themselves to inevitable systemic flaws that only become exposed over time, and are fantastically complicated and expensive to overcome. Businesses in Gens 2+ in an industry take a look at Gen 1, pinpoint their conceptual and systemic failings, add their own flair, and push the concept in a new-ish, more viable direction. If all goes well.
Yet, we also see new companies that patently do not learn from forerunners, (*cough cough* Stellar, Wonder, Capital Kitchens *cough cough*) who believe that surely they will succeed where others have failed by the virtue and sole difference of being, I guess, smarter people? An assumption that is the epitome of risk, though it’s not always treated as such.
We’ll look a little deeper into both Oomi and Meal Outpost, as well as the other next gen ghost kitchen and virtual brand players, soon. Until then, things are looking hopeful for the new crop of ghost kitchen players, and by extension, for the model as a whole.
Related: “NRN editors discuss restaurant earnings week plus ghost-kitchen players” Holly Petre, NRN. TBH I haven’t listened to this (oops), but I hope it’s an insightful conversation.
😬 Chili's new to-go store is exemplary for the wrong reason (“Chili’s launches its first delivery, takeout-only restaurant’ Julie Littman, Restaurant Dive). It’s a mistake to design the front-of-house of your ghost kitchen as an afterthought. Sure, by the definition of the model, your public-facing reception area is a lower priority than in a traditional brick-and-mortar. But what so many ghost kitchens have gotten wrong – and are only beginning to fix now – is crafting a front-of-house that feels just weird. “Weird” in a way that translates instantly to “unwelcoming,” “confusing,” and “off-putting.” A pickup space that is sparse, cold, and empty may make sense from a conceptual POV (why waste money on a space where people will only spend a few minutes?) but whether you’re a driver or (especially) a takeout customer, whether you’re there for a few seconds to grab your bag and go or for 15 minutes to place an order and wait, if you walk into a restaurant lobby and find yourself thinking, “Am I supposed to be here?” that vastly diminishes the chance you’ll come back, or even order delivery.
Past ghost kitchens have failed this simple “welcome” test across their distinctive operations, from food trucks with peeling logos in empty gravel parking lots to sign-less warehouses to, much like this Chili’s, utterly joyless, decor-less rooms. People don’t need to spend a lot of time in your ghost kitchen; but they do need to want to come, like, at all.
😈 Cloud Kitchens follows bad guy playbook, cuts jobs to shortcut profitability (“Travis Kalanick's CloudKitchens startup is cutting jobs as a pandemic-era surge in food ordering subsides” Nancy Luna, Meghan Morris, Insider). Another week, another very Cloud story. This time it’s 30 recruiters who suddenly found their jobs nixed via a sneaky, surprise, scripted Zoom call. All business is nuanced, there’s no right or wrong way to do anything, and it’s probably a good thing that startups are being corralled into some degree of fiscal responsibility. Layoffs happen. But doing it like this is tech bro immaturity masquerading as coldhearted pragmatism. Ugh.
😶 Okay are the food delivery numbers up or down or what (“DoorDash results impress as taste for takeout defies inflation” Ananya Mariam Rajesh, Reuters). The “summer slump” is a reality for all restaurants, including (perhaps especially) those that only offer takeout & delivery. Just as real is the reverse pendulum swing for fall. As people stay home more, schedules get busier, the weather gets colder, and the days grow darker, it becomes easier to feel like going out or ordering in. That’s in part what I think we’re seeing here, with DoorDash’s positive results seemingly indicating an inelasticity to delivery demand that would be a new and somewhat unexpected development. It’s also possible that expectations were readjusted so low that they were simply easier to beat. It’s hard to say. We need a longer post-pandemic trend to confirm any degree of elasticity; not only a month of up after a summer (or a year) of down. So, good job DoorDash, good job delivery, it’s not all doom & gloom. But can you keep it up?
🤯 RBI opens a ghost kitchen and wins the Nobel Genius Prize For Totally 100% Unique Innovation in Ghost Kitchens (“MULTIBRAND RESTAURANT COMPANIES MAY HOLD THE KEY TO THE GHOST KITCHEN MODEL” Joe Guzkowski, Restaurant Business). *Running giddily towards KYLO
Ren Food Hall swinging a sloshing bucket of ice cold water* I’m going to be very nice and civil. This is stupid. All right, it’s not stupid, that’s harsh. It’s just…silly. This is very, very…silly.
Ren Food Hall is not the first of its ilk, which to be fair is mentioned in the article; Inspire Brands’ Alliance Kitchen, located loosely (loosely) in Atlanta, is probably the first “Multi-Brand Restaurant Company Ghost Kitchen” in the US. Sort of. Because local restaurant groups have been doing the same thing with both ghost kitchens and food halls for years. C3 (by SBE) is, essentially, a multibrand restaurant group, and has obviously been in the ghost kitchen game for a hot minute. One of the earliest US ghost-ish kitchens, Sous Vide Kitchen in New York, operated multiple restaurant brands under a single group. Aster Hall, a popular high-end Chicago food hall, contains exclusively restaurants by the Hogsalt restaurant group. And looking outside the US, Rebel Foods (the probable first ghost kitchen and still India’s largest) is a single restaurant group that operates oodles (oodles) of brands. So this idea is quite precedented.
The article also claims that the “ratio of national and local is something we haven’t really seen in a ghost kitchen.” Kitchen United has had a mix of national and local brands in all its location since its inception (you can check their website for the current examples). Cloud Kitchens could boast the same — but they’re harder to check, for obvious reasons. And the ability to order from multiple brand tenants at the same time is also something that Kitchen United pioneered (specifically in a non-vertically-integrated ghost kitchen). So what, really, is KYLO
Ren Food Hall doing that is in any way new or innovative?
For one, it’s RBI that’s doing it with their biggest brands. So maybe that’s enough to be a “milestone.” Maybe. Inspire Brands’ Alliance Kitchen has some big names, but is a little hamstrung by being the “mall brands of yesteryear” company. Big restaurants also have a history of underestimating the ghost kitchen model, and there’s little reason to believe that KYLO
Ren Food Hall will break that particular mold. The article does a solid job in the back half outlining newcomer ghost kitchens’ history of tribulations. It’s just that KYLO Ren Food Hall debut is probably not the big cannonball splash it’s made out to be at the top of the piece; it’s more of a “sploop,” if anything. Just another little sploop in a pond that’s constantly splooping.
And lastly…“Kitchens You LOve?” I…listen, here in the age of anti-cringe, naming something that is clearly intended to be a Big Business Chain that is admirable. *Clap.*
But really what the f-
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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