Imagine a future where customers decide which restaurants exist, what’s offered on their menu, and owners are equipped with the tools to adapt to the ever-changing desires of consumers.
If reading isn’t your thing check out my video summarizing this article.
About the author: Nash Escalada is a Toronto based industrial designer and content creator. He focuses on telling stories about how emerging technologies can bring positive change to the human experience. Kind of like the opposite of Black Mirror.
In 1996 my parents immigrated from Quilmes, Argentina to Pickering, Ontario and my grandma and grandpa soon followed. One year later my parents had the best mistake of their lives (me). My Grandma Flora, who lived down the street from me, would often cook and bake for me my favourite traditional Argentinean/Italian dishes. This included empanadas, gnocchi, tortilla Española, torta de ricotta, and much more. One day when I was over for some lunch I made her the promise that in the future I would open up a restaurant that only serves the dishes that she had prepared for me throughout my childhood.
Redefining the restaurant
I am nowhere near able to open up a restaurant. The only thing I can afford is the idea. And since this dream is far along in Nash’s life roadmap I started to question and research what a restaurant may look like in the future. I became interested in understanding whether sit-down restaurants will be replaced by something better. And asking questions like “will entrepreneurs still open restaurants knowing that another pandemic could arise in the future?” “How might technology shift the restaurant model we know today?”
Through my research, I discovered a trend called ghost kitchens, also known as cloud kitchens. A ghost kitchen is a licensed centralized food production facility, where one or more food brands can rent kitchen space for their virtual restaurant. There is no storefront and all meals are optimized for home delivery through a third-party service like Uber Eats, GrubHub, and Door Dash. Owners of the ghost kitchen may also provide their delivery services to tenants. Each kitchen space is specifically tailored and designed for the needs of that brand to optimize the production of food. Finally, to run a virtual restaurant you can either rent out space in a shared kitchen facility as mentioned above or run it out of your existing brick and mortar location.
The traditional restaurant in the modern world
From what I’ve read, running a restaurant is not an easy task. To open a restaurant you first need to create a brand, pick your menu items, write a business plan, obtain funding, choose a location, get permits and licenses, find equipment, food supplier, design the restaurant layout, hire staff, and market. And then you cross your fingers and hope that what you’ve created will attract enough customers to keep you afloat.
Now imagine it’s 2030. I’ve saved enough money to finally make one of my dreams a reality. I find a great spot downtown with a lot of foot traffic, my branding is eye-catching, I hire some amazing staff, and constructed the most unique menu in town. But, a few months go by and I run into some issues. People have stopped ordering my grandma’s famous empanadas. Another few months go by and a COVID-30 hits, my town goes into lockdown and I can no longer host customers. I now have no idea why the empanadas aren’t selling and I’m left with employees that have no customers to serve.
The success of a restaurant is in the hands of the customer and mother nature. If those two factors aren’t in favour of the owner then the business will suffer. Imagine a restaurant owner didn’t have to be tied down to some expensive location in the downtown core or worry about having to lay off staff if things didn’t go as planned. Imagine they could understand what customers like, what they disliked, and why.
The Amazon of Restaurants
If you translate Amazon’s business model to the restaurant world you can begin to understand how ghost kitchens are redefining the customer and restaurant owner’s experience.
Amazon has transformed the store experience for buyers and sellers. For sellers, they have democratized the ability to participate in the online marketplace. The Fulfillment by Amazon program stores your products in their fulfillment centres, and directly packs, ships, and provide customer service for the products. Now a seller does not need a warehouse, a storefront, or customer service representatives. For the buyer, not only can they avoid walking into a physical store location, but product purchase can be scheduled and automatically delivered at your doorstep the next day.
This ghost kitchen business model introduces a low-risk alternative for entrepreneurs and customers get an experience where the food they want comes to them.
The malleable restaurant experience
Ghost kitchens are shifting a traditionally fixed experience that is predetermined by a business owner to one that is malleable by both the owner and the customer. Restaurants will have the power to transform a menu, brand, operating hours, and cuisine overnight. Below I have described the four future restaurant experiences that describe this malleable experience.
In 2017, UberEats approached Chicago pizzeria owner Simon Mikhail armed with valuable data insights. They showed that residents in his area kept searching for “chicken” but there weren’t many restaurants offering it. UberEats teamed up with Simon to create a new virtual restaurant concept called Si’s Chicken Kitchen that runs out of his existing brick and mortar location using the UberEats platform. A year after opening, it averaged at around $1000 per week, surpassing the original income of his pizza business.
A key benefit in running a virtual kitchen is understanding exactly what your customer wants, when they want it, and why. Because food orders are fulfilled using digital third-party platforms it becomes very easy for brands to aggregate valuable consumer data. Trends in the data could point to which foods nearby neighbourhoods are favour, peak ordering hours, and which ingredients to stock up on.
The other day as I was scrolling through Tik Tok I came across a video of a chef cooking some fresh pasta in a bolognese sauce. Immediately after watching this video, I started craving pasta. But, when I typed it into UberEats there were no nearby locations offered it. Now imagine if the Tik Tok algorithm recommended that same video to 200 other people in my area, causing them to also search for “pasta” and come to the same disappointing result. Meanwhile, there may be a restaurant five minutes away from my location that has all the necessary equipment to cook pasta but is simply unaware of this new trending demand.
Typically a restaurant offers a fixed menu, but imagine restaurant menus were shaped by the customer’s preferences and not by the owners.
Using data analytics to understand internet trends nearby restaurants could access new markets by launching a virtual brand out of their existing location.
Virtual Pop-up Brands
As the ghost kitchen model becomes more widely adopted, we will begin to see virtual pop-up brands. Just like Simon Navin Hariprasad, owner of Spice in the City in Dallas Texas, also worked with UberEats to launch a virtual restaurant. Data insights pointed toward an unmet demand for vegan and vegetarian food options. With this data, he was able to build an entirely new delivery-only restaurant concept: Lucky Cat Vegan. Navin was able to experiment with new food offerings that were backed by analytics and operate it out of his existing brick and mortar location.
Traditional restaurant menu items usually remain fixed, but with a digital menu, new brands and items can be introduced and pulled at any moment without the disruption caused by the traditional physical footprint.
Recently, delivery food service Door Dash opened up Door Dash Kitchens, a shared commissary ghost kitchen located in Redwood City, California. They invited popular brands, including The Halal Guys, Rooster & Rice, Nation’s Giant Hamburgers, and Humphry Slocombe. Door Dash built-out the location and took care of permits, co-designed the kitchen space to match the needs of each restaurant, helped brands refine their menus to the new location, and co-developed marketing material.
Facilities like Door Dash kitchens introduce a new opportunity for brand collaboration in the form of menu-pairing. Because The Halal Guys and Rooster & Rice operate out of the same facility and use the same delivery software, customers can mix-and-match foods from both brands, while paying the same delivery fee.
In the future, you won’t have to cook
My mother loves to cook but also hates it. She doesn’t like the idea of cooking every day, she much prefers my dad to do the work. But, in the future, she won’t have to cook and you won’t either. Cooking will be reserved for the experience, not the chore. Restaurants will deliver exactly what you crave, operate only during the hours in which you’re hungry, and when you get sick of their food, that brand will disappear and be replaced by another. Virtual restaurant owners will be able to quickly adapt to the local culture and explore new markets without the risks associated with traditional brick and mortar restaurants. And maybe one day you might come across Flora’s Kitchen.