If you live in an American city, when you’re hungry, you can find your favorite restaurant and order food on your phone, and soon someone will deliver fresh food to your doorstep.
But the meal may not have been made in the restaurant you imagine. After the coronavirus outbreak, food orders by consumers have increased significantly. Still, CNN reported on Aug. 20th (local time) that dishes for delivery are not cooked at the restaurant ordered by the customer, but are prepared in the so-called “ghost kitchens.”
Also called the “cloud kitchens” or “dark kitchens,” they are facilities that exclusively makes food for home delivery. Because they do not have to attract passers-by, they are often in places with lower rent than restaurants, such as warehouses and parking lots.
Among such ghost kitchens, there are kitchens shared between several restaurants and those rented by companies that have contracted to cook for take-out services (companies that operate food delivery apps).
A start-up called Kitopi, based in Dubai, also works in such spaces. The company has claimed to be the largest managed cloud kitchen in the Middle East and is seeking to enter the US and UK.
Kittopi prepares food on behalf of more than 100 restaurants across the Middle East, including international chains like Pizza Express. More than 1,000 employees work for the company, cooking over 200,000 meals a week. Since the establishment in 2018, it has raised 80 million dollars (95 billion won).
According to market research firm Euromonitor International, the ghost kitchen market is projected to grow to $1 trillion by 2030. In the past few years, these ghost kitchen operators have emerged from around the world.
CloudKitchens, founded by Uber co-founder Travis Kalanick, has raised $400 million, according to start-up investment analytics platform Crunchbase. Another American shared kitchen company, Reef, is making food this way in thousands of parking lots, and India’s Rebel Food runs cloud kitchens for over 3,000 restaurants in 35 cities.
In the initial period of the COVID-19 outbreak, the orders for Kitopi fell sharply. The company fired its employees in the US and UK and stopped expanding new business, as it was uncertain when the market would recover and had to protect the health and safety of its employees as well.
To adapt to the COVID-19 era, the company opened an online grocery store, Shop Kitopi, in May, which uses its existing kitchen network to deliver groceries across Dubai.
But Dakan believes that the coronavirus’s impact could ultimately be positive for ghost kitchens.
“The delivery market is already on a growth trajectory, and COVID-19 broke out after that, but after a brief setback initially, we started to see it rise again.”
He said many new customers are coming in as they opt for home delivery to avoid possible risks of eating out.
Global foodservice researcher Michael Schaefer at Euromonitor International says global food delivery service sales have more than doubled from 2014 to 2019.
“Before the coronavirus outbreak, customers coming to restaurants accounted for most of their sales, but it is unclear how much they will return after the pandemic. In the future, there will be more experiments like ghost kitchens that can meet the growing demand for delivery. I think third-party delivery is going to be the major trend,” he predicted.
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