Ghost Kitchens: An Answer to Real Estate, Food Service, AND Consumer Needs?

Restaurants are closing from a loss of foot traffic – workers have moved to home offices and shoppers have spent less time browsing – and operations costs from pandemic-era changes that were too much to cover. Closures effect not only foodservice workers, but also the commercial real estate in many areas, as there are not yet new restaurants to move into vacated spaces.

Are ghost kitchens the solution? Customers still want the diversity of options available in a vibrant restaurant climate, but many are not yet willing or able to dine in. As delivery fills the gap, more restaurants that are still in operation are making their kitchens available to those who are doing delivery only.

But is that enough? Some don’t think so.

• DoorDash is running a Reopen for Delivery program to match closed restaurants with ghost kitchen operators.
• CloudKitchens has bought more than 40 properties in over 20 cities, spending upwards of $130 million to do so. These spaces are then rented out to businesses that make food specifically for delivery rather than dine-in.
• Others such as Virtual Kitchen Company, Reef Technology, and Kitchen United are similarly innovating to create space for the rapidly expanding food delivery industry.

The Freedonia Group National Online Consumer Survey from August 2020 indicated that there are significant opportunities for growth in this area:

• 26% of consumers reported ordering restaurant food delivery for the first time because of the coronavirus pandemic.
• 45% reports using restaurant food delivery more because of the pandemic.
• 27% of consumers reported using a food delivery service (e.g., DoorDash, Grubhub, Uber Eats) for the first time because of the coronavirus.
• 41% reported using a food delivery service more because of the pandemic.

For more information and discussion of market opportunities, see Packaged Facts’ food- and beverage-related reports, including Food Carryout & Delivery and the companion report with timely consumer insights from our in-house survey capabilities. The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food and restaurant industry analysis, including US Restaurant Reopening: COVID-19 Impact on Supplies and Global Foodservice, as well as packaging industry titles such as Foodservice Single-Use Products, Global Foodservice Single-Use Products, and Global Single-Use Packaging Regulations.

Freedonia Custom Research is also available for questions requiring tailored market intelligence.