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"The Matrix this is not." | spooky kitchens #15
April 22nd, 2022. What folks in food should know about the metaverse today. Also, Cloud opened a real food hall, no one wants Grubhub, and Egypt got its first cloud kitchen.
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)
The metaverse, today: the basics, misconceptions, and what folks in food need to know. (Next week: the metaverse, tomorrow).
Now fire the verse!
the metaverse, today
“What is the metaverse, exactly?” (Eric Ravenscraft, WIRED)
“How brands can (and will) activate in the metaverse” (Brian Cooley, CNET)
Ernest Cline asked, “What if there was a virtual world where we could digitally realize our impossible dreams?” And everyone said, “Yeah, that sounds cool!”
(Then Ernest Cline said, “Great, also everyone in this world loves old video games, genre films, and the (supposedly) underappreciated band Rush.” And everyone went, “Wait-”)
Today’s metaverse proponents are constantly trying to convince everyone in earshot that the virtual utopia of Ready Player One is already here (while conveniently forgetting the real-world dystopia of the novel). It’s not. But it is coming — mainly because it’s expected. Like the smartphone, the personal jetpack, and automated transportation, the metaverse is a sci-fi landmark of the future that indicates we have progressed; we’ve made it to a future once only imagined. Of course, we’ve only realized that future because it was once imagined.
Okay, that’s it for the grandiose existentialism. There had to be some, though. Otherwise it wouldn’t be sci-fi.
But let’s backtrack a step. A “metaverse” is A 3D virtual social space. Like Second Life, but if the public decided it was acceptable and cool. In this digital world you can, through your virtual avatar, chat with other people through their avatars and interact with stuff — basic objects, games, stores — in a way that resembles how you would in real life (“IRL”). That’s kind of the bare minimum of what makes a metaverse.
The metaverse of 2022 still has one foot in science-fiction and one pinky toe in reality. Tomorrow’s utopia may be on its way — but we’ll cover that potential ideal metaverse next week.
In this issue: what you should know about the metaverse of today, a few misconceptions and exaggerations, and opportunities for restaurants that have decided they must get in now.
Today’s metaverse is:
Clunky: From the often heavy, sometimes wired head-and-hand gear needed for immersion (which is the point of the metaverse) to the janky interactions in the digital space, the virtual experience is currently clumsy, barebones, and infantile. Because it’s new. That’s not necessarily a dig, but it should be clarified often and repeatedly — because if you listen to tech executives talk for any amount of time, you’d think God had big banged out a new universe and handed us the controls.
Gamey: The closest representations of tomorrow’s metaverse today are video games — Roblox & Fortnite in particular for their exciting shared worlds that strive to transcend their game-hood, but also VR games like Half Life: Alyx and Boneworks that represent the peak of immersive freedom of interactivity (within the confines of a strictly linear space). Because of the metaverse’s close ties to (and reliance on the advances made in) gaming, the metaverse of the foreseeable future is going to be inherently gamey. That means literal games within the metaverse, controller-based interaction, a design and content bias towards gamers, an emphasis on action, rewards, microtransactions, even questing (which you can see in the Wendyverse’s to-do list).
Uniting the core building blocks of an immersive metaverse (free interaction, free movement, community) is going to take a while. Until that time, expect incremental improvements and the rise and fall of many shallow verses.
Inaccessible: The required tech to fully access the metaverse is expensive, and for non-enthusiasts, difficult to use. It also requires a consistent, high-speed broadband connection; something 25% of households still don’t have. For context, of the Steam PC game marketplace (the most popular by far) userbase, only just over 2% of users (3.4 million) own a VR headset. Other reports claim that up to 20% of Americans use VR; but “use” is quite different from “own.”
Unrealistic: This is true regardless of whether you’re using an immersion headset or just your computer. Watch the linked video of the Wendyverse map in Meta’s Horizon Worlds metaverse — every object is a distinct polygon. The avatars are floating static figures. The text is generic Sans. The objects, sometimes interactive. The Matrix, this is not. Again, this is fine (for now), and should push any company that activates in the metaverse to think outside the box and design their virtual brand in a way befitting their chosen environment.
Separate: The metaverse is not “the” metaverse. It is many disjointed, non-contiguous virtual worlds with sometimes wildly differing utilities, exclusivity, and populations. Many are extremely simplistic, started by random tech bros who’ve managed to convince their VC buddy to make a “virtual real estate play” and get in while the iron’s cold. Some metaverses are already dying; but the idea won’t die that easily. There are doubtless many more on their way, all too happy to stand on the fallen and proclaim that they’d never make the same mistakes.
All that isn’t to say that “the” metaverse isn’t happening; it’s just in its earliest stages today, no matter the hype that surrounds the subject.
Here’s what that means for restaurants (virtual or otherwise) today:
Ripe for experimentation. The stakes are relatively low in today’s various metaverses. Like we’ve seen from Wendy’s & Chipotle, why not experiment now with the limited technology and userbase? If nothing else, marketing teams will familiarize with the environment and discover what clicks and what doesn’t. Novelty & LTO events (a staple in restaurant marketing) are well-suited to the game-verses in particular. The more fun, the less brand-strict, the better. Go bonkers!
There’s no FOMO. On the flip side, there just isn’t enough meta-population today for any restaurant to feel “left out” at this point. If you read this far and still don’t get or aren’t interested in the metaverse; that’s all good. You’ve got years of peace left before you really have to worry about it.
Real-world ties. IRL incentives & rewards for virtual activations work. There’s a reason (well, probably several) why searching for “Wendyverse” videos on Youtube returns just a handful of results, while “Roblox Chipotle” returns multiple pages. Chipotle offered both Burrito Bucks redeemable for actual burritos as well in-game loot (which is practically the raison d’etre of Roblox), a combo that seems to have paid off.
Practice makes per-eh, okay. If it helps, think of today’s metaverse like practice for tomorrow’s. It may look and act nothing like what it will become — but the seed of the future lies within! Or something. You know what I mean.
✂️ Cloud opens a hybrid food hall in Miami (“Miami Beach has yet another food hall — but this one wants to be a local favorite” Carlos Frias, Miami Herald). This article may contain the most words ever publicly spoken by a CloudKitchens representative. Cloud’s Alton Food Hall GM (formerly of Uber Eats, of course) effuses about bringing Miami locals’ favorites to the residents of South Beach in their IRL food hall – like a Time Out Market or other traditional food hall where people can come in, interact with the vendors, and sit down – while selling ghost kitchen space to Popeye’s, Capriotti’s, and more chains elsewhere in the building. Cloud is more willing to try out new formats than other ghost providers (while praying “Please, God, will anything work”) and it sounds nice on paper; but in reality, seems like it would be a highly complicated ecosystem to manage. Do locals and drivers all come and go the same way? How do you access the ghost kitchens versus the food hall stalls? Is there quick pickup parking? Who knows — might have to take a trip to Miami to find out.
💩 Just Eat Takeaway looks to regift “Grubhub” (“Just Eat Takeaway is exploring a sale of Grubhub barely a year after buying the company” Ryan Browne, CNBC). Rumors of a sale have floated for some time as JET’s more vocal investors have demanded a divestment from the over-the-hill US food delivery platform. Now it’s public. JET & Grubhub’s woes aren’t theirs alone; as mentioned in the article, fellow Euro delivery firms Deliveroo and Delivery Hero have dropped in value by 56% and 73%, respectively. For ghost kitchens and delivery, this is clearly the reverse pendulum swing from the boom times of the early pandemic, as more and more of the world vaccinates, unmasks, and returns to the shared spaces so many have missed. Of course, for those companies that blatantly ignored the possibility of such a shift and bet instead on a moonshot trajectory for the space’s growth, this means trouble. Big trouble.
🏆 Egypt gets its first cloud kitchen (“The Food Lab, an Egyptian cloud kitchen provider, raises $4.5M pre-seed for expansion” Tage Kene-Okafor, TechCrunch). Restaurants are stubborn, if nothing else. Independent owners have a vision for their establishment and cling tight to it, casting a menacing eye at new technology or other so-called “advances” in restaurant management purveyed by eager salespeople. And chains have a system that works — otherwise they wouldn’t be a chain — so any change is a threat to that stability. In the US, we’ve got 200 years of foodservice stubbornness built up. In Egypt, thousands of years, with a food culture of access (i.e. street food, aka the best food) and tradition all mixed up with modern QSRs and a prestigious high-end scene. The Food Lab, self-funded for two years before this successful seed round, is an achievement in breaking through stubborn barriers. Best luck to them as they figure out what version of “cloud kitchen” fits the Egyptian market’s needs.
Related: Belgium ghost kitchen Casper has a better name than most ghost kitchens (“Ghent ghost kitchen chain Casper cooks up €5 million for its neighbourhood-friendly approach” Patricia Allen). Casper is associated with (very comfortable) millennial beds in the US, hence why no one has taken up the friendly ghost’s mantle (and maybe why Zuul resorted to the name of a demon instead). Anyway, ze Belgian Casper employs a C3 model, operating all their own brands and able to mix and match items from multiple “restaurants” in one order.
🤔 A “reverse ghost kitchen” is just a restaurant, but there are still some lessons to be learned here (“Here’s how this reverse ghost kitchen found success by going brick and mortar” Joanna Fantozzi, NRN). Long story short: “Burger Dandy” started as a ghost kitchen operating out of an existing restaurant with extra capacity (700 sq ft of extra capacity), and then became popular enough to reconfigure into its own “brick-and-mortar” dine-in space. This ghost-to-corporeal story that seems to wonder why more virtual restaurants haven’t “graduated” to brick-and-mortar has some asterisks, though. For one, Burger Dandy still shares a roof with its “parent” concept, Americana Taproom. They’re separate restaurants with the same owner, all in one building; so while there were costs to fit the extra space for the new production line and eventually dining area, this is a far cheaper B&M conversion than most virtual restaurants would face having to procure their own four walls. It was smart for the operator to try the ghost concept, and smarter still to recognize its popularity with their local base; but most restaurants aren’t necessarily operating with these factors in their favor. Virtual restaurants also need not become traditional restaurants — some virtual concepts could work better as a B&M; or work as both; or some B&Ms might be best without dine-in.
Ultimately, the lessons from this case study are to stay flexible and keep a broad view of opportunities for success — not revolutionary, but a good reminder to have every once in a while.
🦍 The Heart of NFT-ness: the LA Times visits the Bored Ape pop-up restaurant (“Can NFTs save the restaurant industry or is the hype just virtual?” Lucas Kwan Peterson, LA Times). This article vividly presents my very own LA nightmare; though I appreciate Lucas’s efforts to stay open to the hype culture and potential benefits of NFTs. If you’re still confused about the craze in general, this story does a great job at pulling many different POVs together into a cohesive portrait of the space. The restaurant isn’t anything to talk about, though; it’s selling smashburgers in the smashburger popup capital of the country. Ho hum.
💀 Dessert: Not with a bang, but with a *click* (“How to let a metaverse die” Pearse Anderson, Polygon). A fascinating and thoughtful piece about the anticlimactic ends of multiple online shared spaces — and what they tell us about the more mainstream metaverse(s) to come.
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 (and frequently updated) to help make sense of this weird and wild west.