"UTOPIA" | spooky kitchens #31
"UTOPIA" | spooky kitchens #31
August 27th, 2022. A Wonder blunder, rain on Cloud's parade, and a *shocking* NFT restaurant update.
Happy Saturday y’all,
First thing’s first: I saved all my summer holidays for right here at the end. Hence, Saturday again…again. But hey, it’s here, ain’t it? (Friday deliveries will return, I promise).
And as a quick reminder, all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
Luckily, not all that much. It’s a low-quantity, high-quality week. At least, I think so.
We’re going to discuss this more next week, but I’d be remiss not to point out Joe Guzkowski’s recent article on the oft-cited, ill-fitting Euromonitor $1T market opportunity. Call it homework. There will be a quiz.
(are they really) sides (if that’s all you order?)
🚩 The man behind Wonder (unintentionally) raises an enormous red flag (“For his new smart desert city, billionaire Marc Lore eyes Nevada, Utah and Arizona” Adina Solomon, Smart Cities Dive). Some may consider Marc Lore to be among those visionary billionaire tech CEOs whose every move, muttering, and thought is the Next Big Thing. Certainly Marc Lore thinks this is the case, as he sets out to build a (*deep sigh*) utopian city in the desert. Society in the city will apparently be based upon a principle called “equitism,” a new(?) mish-mash of capitalism, socialism, and democracy — which is already how most countries operate today. Someone get this man to sit down and play Bioshock.
Beyond giving Wonder an obvious new Western expansion, this city (called “Telosa,” which sounds disconcertingly like “Tesla” with a dash of Tolkien-Elvish) is a caution signal for those who’d partner with Lore on other ventures, or otherwise subscribe to him as a model business figure. Dreams are fine – actually, they’re great. It takes a lot of courage to dream, and to hold onto a dream, and especially to attempt to realize it. But a desert utopia designed by a billionaire with a solution for the ails of society is, as Vizzini would say, “One of the classic blunders.” It is folly given form; hubris incarnate. All but destined to crash & burn spectacularly (if a city burns in the desert and no one is there to see it, does anyone care?).
So before we continue applauding “the next evolution of food delivery,” let’s think of Telosa, this other grand idea of Marc Lore’s; and ponder how much of the same thinking went into Wonder.
🙋 People are finally talking about Cloud (“Restaurants Are Jumping Ship From Uber Founder’s Ghost Kitchen” Amy McCarthy, Eater) (original report on Insider Premium). So, two things: first, it is great to see reports like this finally see the light of day. Second, it is awful that these things are happening to small business owners without resources to fall back on, for whom this may be their first and last restaurant or business venture (even worse that these folks were targeted as prime customers). Working at a ghost kitchen company, I met a lot of operators who, understandably, were trying out multiple ghost kitchens to see which best fit their concept; and I heard a lot of horror stories. Where we would sometimes hear about operational & traffic struggles with REEF, those experiences paled in comparison to what we’d hear from operators in Cloud facilities – just about all of which you can now read about in the Eater article (free) or the original Insider report (premium). This has been going on for years. As a competitor, you can only issue vague warnings or risk sounding like you’re overreacting or taking cheap shots at the competition. And as a writer, aside from being accused of slander and calumny, these weren’t my stories to tell. I can tell you that there are many more to be heard, however.
I’m glad that former operators are finally willing and able to come forward to share their experiences, and I’m gladder for the greater reckoning for predatory ghost kitchens (or ghost kitchen practices) this year. I don’t agree with the sweeping conclusion of the Eater article that “ghost kitchens are a pretty terrible addition to the restaurant landscape” – it’s a takeout-forward business model, and not inherently evil. But the sentiment isn’t entirely wrong. REEF and Cloud are the two biggest ghost kitchens in the country and, well, look at them. Can you say the restaurant industry is truly better off for having them around? Could you say the same for consumers? Ultimately the greatest benefit they may provide anyone is to be a cautionary tale for both other restaurateurs and up-and-coming ghost kitchens alike, relaying a moral that Cloud CEO Travis Kalanick should have learned well enough already: that the truth will out, no matter how many zeros you command, nor how brutish a legal team you muster.
😱 *GASP.* It turns out NFT restaurateurs actually had no idea how to run a restaurant? Or a business? (“The Effort to Onboard Restaurants to Web3 Continues, But It’s Going to Take Some Time” Michael Wolf, The Spoon). Who could have predicted the whole restaurant industry wouldn’t leap onto Web3 (aka the blockchain-powered evolution of the Internet as we know it)? And who could have foreseen that the first wave of NFT-based restaurants would struggle to find a purpose or strategy or any semblance of a business plan beyond, “Sell NFTs, make burgers, be popular?” Such are the great mysteries of our day.
The title of this Spoon article is actually quite kind to its subjects, as the body of the piece is really a tour de fiasco of various NFT concept restaurants. Here’s the demonstrative first section, on the $5.4M NFT-funded concept FriesDAO:
“Things look to be slow-going. Reviewing some of the announcements made via the DAO’s Discord, the group began exploring potentially working with Bored & Hungry to open a second location in June. Those talks don’t seem to have progressed very far. The group also began exploring potential deals to acquire or start a new franchise with a few franchise operators, including a Jersey Mike’s owner. In early August, the FriesDAO admin team announced that the Jersey Mike’s owner they had been in conversation with is no longer looking to sell.”
“Began exploring potentially working with…don’t seem to have progressed…potential deals to acquire…no longer looking to sell.” Does anyone else read this and think these guys have absolutely no idea what they’re doing? The company’s announcement Discord must be a truly fascinating place, as NFT owners witness the value of their brand investment plummet even outside the greater crypto crash.
My takeaway from this is not just that Web3 is going to take a long time coming to the restaurant world (the majority of which, again, only adopted online ordering and basic digital marketing two years ago) but is going to be relegated to novelty status for the foreseeable future. And frankly, this is one future I feel like I can foresee a lot of.
That’s spooky kitchens.
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 to help make sense of this weird and wild west.
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