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

November 2019

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

Ghost kitchens, virtual restaurants two sides of same coin

Ghost kitchens and virtual restaurants both represent adaptations to booming delivery demand, one from the production side, the other branding. Both will continue to expand as more operators look to adapt their operations.

The end of the beginning for delivery

No longer an incremental add-on to dine-in traffic, delivery and online ordering are becoming basic expectations for consumers. going forward, successful restaurants must plan their entire operations (packaging, kitchens, site selection) with delivery built in.

The quest for traffic

By potentially “rationalising” production for delivery, ghost kitchens could drive a process of scaling which could result in drastically lower prices for prepared, delivered food. Carried forward, this could drive a host of daily eating occasions towards restaurants in general and delivery aggregators more specifically.

Food factories

A more delivery-centric food environment defined by prepared food on demand could further blur the lines between retail and foodservice, as more and more of the food and drink industry’s production chain moves towards a model of fresh, relatively local food prepared on demand.

Fast foods' “fast fashion” era

Akin to the rise of fashion retailers such as Primark, Zara and H&M, widespread adoption of ghost kitchens could usher in a new era for the global restaurant industry, one where flavour and product trends move from relatively high-end restaurants to more mainstream operators and channels than ever before.

Introduction

Scope
Key findings

Executive Summary

Ghost kitchens, virtual restaurants, and physical restaurants
New formats are one step in an ongoing process of transformation
Global consumer demand for convenient prepared items surging
Ghost kitchens allow restaurants to adapt their operations to delivery
Ghost kitchens and the modularisation of the restaurant industry
New platforms will bring production, sales, consumption closer
Food, delivery and the Netflix model
This is the “end of the beginning” for delivery
Ubiquitous delivery points to a future of less cooking, more services
History of clothing gives clues to rise of new, personalised food systems
A delivery- optimised future impacts every food and drink player

Sizing the Potential for Ghost Kitchens

How big is this now? Key markets with summaries
Age of prepared food on demand requires innovation on multiple fronts
Automation, lower prices for delivery to drive sea change in eating habits
Asian markets suggest size of potential future gains for foodservice
Ghost kitchens unlock potential USD1.5 trillion opportunity by 2050
Key drivers also represent major potential barriers
Mapping four potential 10-year scenarios

Case Studies

Ghost kitchens, virtual restaurants enable a host of new models
Vertically-integrated models face growing pressure
The rise of the third party shared kitchen facility
Keatz combines 100% virtual model with tight control of production
Rebel Foods maps a path to delivery-only success in emerging markets
Delivery aggregators push ahead with ghost kitchens
Aggregators potentially the new “franchisees” for chains
Panera’s 2.0 outlet redesign addresses a new set of preferences
Future is now for convenience store operators and ghost kitchens
Grocery players expand central kitchens, invest in indoor farming
Ghost kitchens fuel the idea of real estate as a service
Third party kitchens offer opportunity to packaged food start-ups

Future Scenarios

Mapping four next steps for the food industry
Ghost kitchens can move delivery services beyond dinner
Snacks, meals, cooking and time
Distributed production, or “everything as a service”
Expanding delivery forces soft drinks brands to rethink sales models
Ghost kitchens will force new beverage business models
Live-streaming, ghost kitchens could drive new generation of chefs
Live streaming today – and how it could evolve

Conclusions

Food’s new fast fashion era
Four predictions
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