Ghost Kitchens, Virtual Restaurants, and a Delivery-Optimised Future

November 2021

The rise of on-demand food delivery is driving a sea change in the global food and drink industry. Ghost kitchens represent an important component of this process. As freshly prepared meals and snacks become a larger part of our lives, more production will move “into the cloud,” with a growing separation between production sites, points of sale, and consumer interaction.

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Key Findings

From ghost kitchens to ghost commerce

Restaurant delivery aggregators add grocery, third party grocery delivery adds foodservice. Logistics of food prep, delivery becoming abstracted away from the point of sale.

All-in-one delivery/takeaway “food courts” expand

Third party ghost kitchen operators embrace a marketplace model, combining a curated selection of brands, often in a single app. Significant potential for bundling separate orders, fast delivery, and takeaway traffic.

Aggregating independents, virtual brands

The COVID-19 pandemic created a massive pool of spare capacity in independent restaurant kitchens. Investment pouring into companies seeking to connect virtual and other brands with independent restaurants to fulfil delivery orders.

Expanding “commodity” delivery occasions

Growth of virtual brands offers room for experimentation, yet also means fewer barriers to entry for quick-service favourites such as chicken wings or noodles. Could eventually drive growth in larger, more specialised, highly-automated ghost kitchen facilities (“food factories”) creating reliable favourites and competing largely on price.

Distributed third party production vs vertical integration

A significant number of brands could exist solely via distributed third party production, contracting with intermediaries to connect with independents. In markets with more nascent restaurant sectors, highly-integrated operators combining their own kitchen facilities with a host of their own delivery-optimised brands could drive the emergence of a modern restaurants channel.

Introduction

Scope
Key findings

Executive Summary

Ghost kitchens, virtual restaurants, and physical restaurants
Ubiquitous delivery points to a future of less cooking, more services
More channels becoming “meal fulfilment centres”

Future Scenarios

Mapping key next steps for the food industry

Sizing the Potential for Ghost Kitchens

On-demand delivery is changing the entire food and drink industry
EDIT - How big is this now? Key markets with summaries
Lower prices for delivery could drive sea change in eating habits
How much spending is in play for ghost kitchens?
Key drivers also represent major potential barriers

Strategies

Examples of key business models
Wow Bao launches national ghost kitchen programme
Ghost kitchen operators add takeaway, food court concepts
Rebundling the meal: Kraft Heinz’s “Honig Freshly Prepared”
IFood’s Loop targets the commodity lunch
Nice Day Chinese aims to aggregate US Chinese food
Rebel Foods expands third party Launcher programme

Regional Focus: Latin America

Latin American context boosts delivery beyond pandemic
Decentralisation creates opportunities in mid-sized cities
Traffic, congestion in cities drives ghost kitchen growth
Challenges to overcome in Latin America
Rappi and Muncher partnership allows quick geographic expansion
PedidosYa grows through its own private label virtual brands
Packaged food players roll out pop-up ghost kitchens
Key Takeaways
Mapping key next steps for the food industry
Expanding delivery forces soft drinks brands to rethink sales models
Ghost kitchens will force new beverage business models
Distributed “food factories” could reshape cities
New omnichannel brands plot new path-to-purchase

Conclusions

Key takeaways
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