- With the pandemic increasing the amount of food delivery and hurting restaurants’ bottom lines, buzzy ghost kitchens see an opportunity to grow.
- The category had already attracted a lot of interest, notably from Uber co-founder and former-CEO Travis Kalanick, who launched CloudKitchens in 2016.
- We compiled 14 of the biggest players in the ghost kitchen world to show the international scope of the budding space.
- Visit Business Insider’s homepage for more stories.
The pandemic has closed thousands of restaurants, many for good, while food delivery volume is increasing substantially. Much of the country reopening indoor dining, but Opentable is reporting that the amount of seated diners continues to substantially underperform last year.
Ghost kitchens, a buzzy class of startups, were already betting that delivery would grow in market share, attracting founders including billionaire Uber ex-CEO Travis Kalanick, but the rapid increase in delivery demand has accelerated their growth.
These companies operate a kitchen that hosts multiple restaurants or menus, from which they only do delivery orders (or sometimes pick up). Some run their own food brands, while others partner with local chefs or established delivery brands.
While American startup hotbeds like Silicon Valley and New York have seen multiple ghost kitchen startups, this trend is worldwide, with Dubai, India, and Western Europe emerging as other areas that have spawned multiple startups.
“Every single restaurant globally became a ghost kitchen overnight,” Corey Manicone, CEO and cofounder of Zuul Kitchens, told Business Insider. He said that the pandemic has accelerated the concept by three to five years, but that there’s a lot of growth ahead.
“We’re at the same place as e-commerce in the early 2000s,” he said.
Money continues to flow into the space: both Zuul and hotel-focused ghost kitchen Butler Hospitality raised money in July, $9 million and $15 million respectively. Karma Kitchen, a UK based kitchen, recently raised $318 million as well.
In a time of economic contraction, the model makes a lot of sense for restauranteurs. Real estate and labor costs can be pooled across multiple restaurants, lowering the amount of square footage and the number of employees a restaurant needs. Less overhead, with the same amount of income.
The pandemic’s impact on retail space, including restaurant space, has also been a boon for the industry. Firms convert restaurant space, underutilized retail space, and occasionally industrial space into ghost kitchens. Two of those three categories, retail and restaurants, are having an outsized negative effect from the pandemic, which leads to a glut of supply for ghost kitchens.
While real-estate firms may not have originally planned to bring ghost kitchens into their space, the bottoming out of demand from traditional tenants has opened many up to the business.
“A lot of these development companies, larger landholders, and real-estate firms are taking a forward-looking, reset view of what is the best way to optimize their holdings for the future,” Jim Collins, founder and CEO of Kitchen United, told Business Insider.
We’ve created a list of 14 of the hottest startups in the space, highlighting where they’ve received money and what’s different about their concept.