The elusive ghost kitchen (also referred to as a digital kitchen) became a hot new trend in 2019. Today in 2021, there are thousands of them across the country—and New York City is quite literally crawling with them.
However, the business model of the ghost kitchen isn't as new as it seems. The actual concept of the kitchen-only operation came about in 2015, with Maple, the delivery-only service curated by celebrity chef David Chang. Despite the idea garnering a strong following, the idea seemingly vanished without much of a second thought as delivery-only services at that time weren't as prevalent.
Arguably, the greatest obstacle was finding a way to balance the quality of ingredients and the overall pricing.
If there's one even greater obstacle that most big cities are facing, it's the rising costs of rent for restaurant spaces and the crumbling economy thanks to the ongoing COVID-19 pandemic. Fortunately, ghost kitchens have become the solution to running a restaurant-based business efficiently and affordably, as they don't come with the associated costs of running a full dine-in spot.
Early Beginnings of the Virtual Kitchen Trend
It can be tricky to pinpoint the exact date and time of the first established ghost kitchen, especially in a place like New York City, where each nook and cranny is hiding something big and interesting. Today, the streets of the city are littered with tons of ghost kitchens, as if they were speak easies for food.
However, unlike speak easies, ghost kitchens are even harder to happen upon as they're well hiding inside of unassuming buildings with inconspicuous insignia.
As we know now, the term was first thrown around in 2015, alongside the concept of a delivery-only restaurant. Of course, during this time, multiple listings for restaurants were seemingly cropping up left and right.
It was NBC's investigative team that found the ghost kitchen "restaurant" owners through listings on delivery applications such as Seamless and Grubhub. The kitchens that were found had names but their addresses didn't match any listings within the city's database of restaurant inspection grades. Additionally, many of these locations were non-retail food processing establishments, which didn't have the proper permits to sell food directly to consumers.
It suffices to say, nearly every virtual kitchen during this time was removed from delivery applications and policies designed to double-check restaurant information were put into place.
Evolution of the Ghost Kitchen Business Model
The negative impacts of the ongoing pandemic that nearly killed the small business owner—namely, restaurants—turned into a positive as it opened the flood gates of a rising need for delivery services.
While most people would still prefer to fine out, physical location now matters a little less as we continue to practice health and safety measures to get back to normal. Ghost kitchens have become a way for business owners to recoup some of their losses as well as a means to launch new business opportunities.
Now the virtual brands that are able to associate themselves with this newer virtual kitchen trend are capitalizing on the proliferation caused by the restrictions on indoor dining and the demand it has created. The growth of the ghost kitchen went into acceleration mode within just three months during 2020 when it had taken roughly five years to become a viable business model.
Now the accelerated growth of the ghost kitchen is predicted to rake in upwards of $1 trillion by 2030.
This means that culinary entrepreneurs, private spaces, and even the companies offering restaurant SaaS and other types of restaurant tech will not only be able to recover their losses, but thrive in the coming years.
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