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"The Largest Ghost Kitchen Newsletter" | spooky kitchens #20
May 27th, 2022. Wow Bao's industry-first(?) rewards program, a robot-ghost kitchen, and a whole bunch of expansion.
Happy Friday y’all,
First thing’s first: you can also read this on the web, with slightly better aesthetics than your inbox. Just FYI.
And just a quick reminder: all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
First, Wow Bao launched a rewards program. Why are they the first among virtual brands to do so?
Now fire rewards!
why don’t more virtual brands have loyalty programs?
“Wao Bao Launches Virtual-Restaurant Rewards, A First” Nicholas Upton, Food On Demand.
Speaking from experience, the first thing many restaurants do upon launching their first virtual restaurant or ghost kitchen is throw the entire, multi-volume traditional restaurant playbook at it to see what sticks. After much of it fails (especially in marketing), some restaurants give up, while others learn, adapt, and grow. Which is why it’s a little puzzling to me as to how Wow Bao managed to be the first virtual restaurant with a loyalty or rewards program, considering rewards programs are among the oldest bread & butter marketing tactics in the industry.
Then again, maybe it’s not too surprising: most virtual restaurants, after all, are not large chains (“standalone” virtual restaurants, that is e.g. not a Wendy’s ghost kitchen). And those that are (MrBeast, Another Wing, Flavortown) seem more interesting in sparking hype than cultivating a following – God-forbid they do anything resembling a “traditional” restaurant. The umbrella brands that operate virtual chains (Earl Enterprises, Virtual Brand Co, Nextbite) also seem more occupied with finding host kitchen partners and developing and selling the next big celebrity brand than building a long-term success model for their restaurants. Even C3, with their suite of in-house brands and first-party app, focuses their customer incentives on discounts and offers rather than earning resto-bucks over time.
Another consideration (and takeaway from the article): the near-total dependence of virtual brands on third-party delivery apps, which have no individual restaurant loyalty or rewards built-in (and are unlikely to ever do so). Wow Bao has applied their rewards to direct orders through their website, which is built on the DoorDash online ordering platform; but importantly, rewards do not apply to orders placed through the DoorDash app. I’d guess there was still some strong-arming involved to get the usually unreachable DoorDash to do even this much for them, but it’s done, now. Perhaps Wow Bao’s opened a once-closed door to loyalty through which other restaurants will follow? Or maybe not. Their success as a virtual restaurant, in loyalty and in many other ways, has yet to be replicated by other virtual-empire throne-chasers.
Related: Nextbite Chief Growth Officer on what makes virtual brands successful (“Nextbite exec dishes on how operators can make virtual brands successful” Emma Liem Beckett, Restaurant Dive).
🤖 I’d watch a Robo-Ghost (Kitchen) movie (“Remy Robotics Unveils Robotic Ghost Kitchen Platform as It Opens Third Location in Barcelona” Michael Wolf, The Spoon). Sadly, this article is not about a Robo-Ghost Kitchen movie – it’s about a Robo-Ghost Kitchen, though! Remy Robotics is the latest (public) entrant into this unholy-union of a niche industry (robotics + ghost kitchens). This is not a Flippy-like appendage designed to perform single tasks, but a full automated system (like a Creator or Spyce) where an entire production system is designed to automatically render a specific menu; mostly Remy’s own brands, but now open to other brands as well. The catch being that the system functions best for brands built from the ground-up for this system, and isn’t set up for porting, say, Burger King’s menu on the fly (in other words: only new brands may apply). Remy also boasts the capability to set up and launch a new kitchen in 48 hours – a mind-boggling and curious feat that seems to subvert the laws of both ghost kitchens & robotics; namely, the law that says, “Let Nothing Happen Quickly, Efficiently, or Economically.”
🍳 Is this virtual food hall/restaurant a diner by any other name? (“Dragonfly to launch new twist on NFT as loyalty club” Lisa Jennings, NRN). It’s fitting that Dragonfly Brands – a restaurant group that operates multiple virtual concepts under one roof for both dine in and takeout – is located in Linden, New Jersey. Because what’s the difference, ultimately, between a diner that has novel of a menu that runs the gamut from breakfast to pasta to salads to rice bowls to seafood to burgers, and a restaurant with “additional menus” for other virtual restaurants rendered in the same kitchen that run the gamut from…well, the same gamut? Where you can order anything, from any menu, for dine-in or takeout? From an app-marketing & placement perspective, more brands makes clear sense — but customers at the restaurant itself could easily be confused by the sudden appearance of even more restaurants with their own distinct menus inside. But, I haven’t been to Dragonfly, so I don’t know. Maybe it’s the evolution of the diner we never saw coming.
If you really need to get your NFT fix this week, check out this piece from Barb Leung in this week’s Expedite – where she covers the phenomenon with more insight and patience than I ever plan to.
BTW, if you’re looking for food tech news beyond the ghost kitchen space, Expedite is an excellent weekly source.
✂️ Kitchen United MIX opens its latest Dallas-area location (“New delivery and takeout kitchen from California debuts in Dallas” Teresa Gubbins, CultureMap Dallas). Kitchen United’s Frisco location opened this week with five brands at launch, including Fuddrucker’s, Capriotti’s, & Grimaldi’s. This joins KU’s Kroger location (already open), and a coming-soon Plano location with restaurants to-be-announced.
🦗 Tech Man makes sweeping, useless predictions about meta-raunts at the National Restaurant Show to great fanfare and applause (“What Alexis Ohanian Really Thinks About Restaurants Joining The Metaverse” Elaina Friedman, Mashed). People want and expect leaders of successful (or at least, popular) tech companies to spout profound predictions – and Alexis Ohanian fulfilled that prediction at the NRA Show. He got on stage and pretty much said, “Virtual dining experiences can be very cool, like, super cool, way better than dine-in, but they won’t eliminate dine-in completely, but they will be so much better, if you do it right.” Without elaborating on what “doing it right” actually meant or giving any imagination or detail to what those futuristic dining experiences might actually look and feel like. Listen, gang, a “C” in your title and a string of 0’s in your bank account is no indication of far-seeing abilities (or even a brain). Can virtual dining be a cool thing? Sure! So where does the food come from? Who makes it? Who plates it? Who serves it? Who cleans it?
🥪 Potbelly signs up with REEF, promotes first “delivery-based license” (“Potbelly announces delivery-based license with REEF” Release, QSR Mag). The partnership is not surprising – Potbelly is exactly the kind of company that fits with REEF – mid/large sandwich chain, mostly contained to one region but constantly eyeballing opportunities to break out. The announcement itself is a little stranger; usually the headline is something like, “Potbelly & REEF team up to launch 500 new kitchens” or “Potbelly announces 800-unit ghost kitchen expansion,” but this is a little more tame. The wording being less focused on unit count and more focused on the licensing says to me that, at least to Potbelly, the news is less REEF and more “Hey, delivery licencees: we’re in the market.”
🍗 KFC expands ghost kitchens…across the pond (“KFC to test ghost kitchens in London” Release, QSR Mag). KFC – maybe the brand most recognized internationally as “American food” after McDonald’s – is launching ghost kitchens in the UK. The company doesn’t appear to have a significant ghost presence in the US (requiring a plethora of fryers would be difficult in sometimes-confined ghost spaces), but has slowly adapted to a more off-premise focus in recent years along with the rest of YUM! Brands. Pip pip, cheerio and all that to them in Londontown.
🤔 Welbilt launches The Largest Restaurant Smart Ecosystem, whatever that means (“Welbilt sets out big picture strategy for cloud kitchens” Andrew Seymour, Catering Insights). I’m going to get petty here (before I do, what I’m about to talk about is basically a tech partner package to future-optimize your ghost kitchen if you’re also a Welbilt equipment customer — there you go, proof I don’t hate Welbilt) but I really can’t get over how stupid “The Largest Restaurant Smart Ecosystem” is as an official product name. I mean, you have to think that the marketing team had something better lined up (“The TechBuddies Package!”, “The Genius Ecosystem For Smart Restaurants”, or “Smart-Kitchens United”...all also bad but not as bad) with “The Largest Restaurant Smart Ecosystem” as a follow-up descriptor, when some higher-up exec decided to “simplify” things by just calling it the latter.* “The Largest!” We have to say it! In the title! Or people won’t know! We have the biggest one!
Thank you for joining me in the petty corner. That is all.
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.