Dark Kitchen – How Much Money Can You really Make?

Update September 2020 – We initially wrote this article 3 months before any signs of coronavirus. The interest for dark kitchens was gaining traction since 2016 however Covid 19 forced millions of restaurants to work on some sort of delivery service. We have mapped out this booming market at the bottom of this article.

Dark kitchen, ghost kitchen, virtual kitchen.. so many names for what is basically a delivery only kitchen. The low setup cost compared to traditional restaurants has made this a growing trend for food business entrepreneurs. 

But you have to be careful here, starting a dark kitchen can mean 3 things:

Dark kitchen as a food brand

This is a real startup business. You create a new food menu and you then promote this menu on food delivery apps such as Deliveroo and Uber eats. As soon as an order is placed, your cloud kitchen makes the food and the delivery people deliver. 

That’s it! You do not need a front of house, high street rent prices and you don’t need to decorate your restaurant. This is about efficient food making and marketing.

Rebelfoods raised 125M$ this summer just to build dark kitchen brands. https://rebelfoods.co/

An extension to your existing restaurant

You already have a restaurant and you’d like to grow by getting into the food delivery business. Using your existing kitchen to cater for extra online orders can mess with your setup. It’s also not great having delivery people constantly walking in and out of your restaurant while clients are eating.

A virtual kitchen will enable you to make and deliver your restaurant’s food off site. It could also allow you to extend your brand and reach to other areas in town. 

Dark kitchen as a property investment

In this case, you lease or buy a warehouse. You then split the building into fully kitted professional kitchens and you then rent these kitchens out to food brands. These brands can be pure dark kitchens or extra space for restaurants. 

In the UK you’ll find:

Dark kitchens as a commercial property investment is big business. Foodstars is actually owned by CloudKitchen which is Travis Kalanick (the founder of Uber).. small world!

In London, prices are high. Renting a dark kitchen will cost you £3000/month + VAT on a 12 months contract.

Let’s do some quick maths:

Outgoings

£190 000/year: 4000 sqft warehouse in south London rent + business rates + maintenance. 

£275 000 in year 1: refurbishment for 15 kitchens (£15 000/kitchen) + shared area (£50 000)

_______

  • £465 000 in year 1
  • £190 000/year in year 2+

Revenu

£540 000/year: 15 kitchens x £3 000

Profit

  • Year 1: £75 000
  • Year 2: £350 000

Obviously, this is an estimation. There will be a churn rate. Not all kitchens will be full all the time and you’ll have issues. But that’s a very healthy return on investment even if half of the kitchens are empty…

You’d have to flip A LOT of burgers to make that kind of money…

And then there was 2020 – the year dark kitchens took off!

Today, restaurants are just not bringing in enough customers to survive and this trend is set to continue over the winter. Eating habits will be changed forever. This is especially true in city centres where remote working has killed the local trade in now deserted office areas.

So this is it, dark kitchens are not so dark anymore. I’ve got a feeling that a rebranding will happen with virtual kitchens or cloud kitchens becoming the new and less controversial “dark” word.

The whole food delivery ecosystem has been revamped over the last months with millions of funds being raised every month. Current players will need to adapt and new players will jump in to take advantage of this very exciting environment.

We’ve tried to map out the market below. This is an ever growing list, so please don’t hesitate to contact us if you’d like to recommend a brand or business.

Hopefully this list will point you in the right direction if you’re looking to get into the dark kitchen space.

Dark Kitchen Investors

Dark kitchens are not restaurants, they feel more like startups and once you’re tested your concept, it is possible to grow really fast. A few seed investors are diving deep into this space.

  • Hoxton Ventures (investor)

Dark Kitchen Food Delivery

You probably know a few of these food delivery platforms already as being regular customers. These platforms will become your best friends, get to know them really well!

  • Supper London
  • Just Eat
  • Uber Eats
  • Deliveroo
  • Glovo
  • FoodHub

Dark Kitchen Software

A successful dark kitchen is about optimising every part of the food delivery process. And this starts with choosing the best software. Quite a few out there. We think Deliverect is pretty cool, but try 1 or 2 demos before you select your favorite.

  • Flipdish
  • RunMeal
  • Preoday
  • Deliverart
  • Orderlord
  • Orderswift
  • weungry
  • Deliverect
  • GloriaFood
  • Restaumatic
  • OrderingDirect
  • OrderYoYo
  • Weorder
  • ApperSt
  • BistroHub

Dark Kitchen To Rent

The good news for you, is there is a lot of commercial space available at the moment. And at pretty decent prices. The real choice is between building the kitchen yourself with a commercial lease or going with a fully setup service (like a kitchen co-working space) where you just have to walk in and start fulfilling orders.

  • Dephna
  • FoodStarsUK
  • TheCloudKitchenPeople
  • RunTheBox
  • PKL
  • Kitchen Republic
  • Kitchn’box
  • Cooccio
  • ReefKitchens
  • Kitopi
  • KarmaKitchen
  • Kitchen united
  • Mimic
  • CloudKitchens

Dark Kitchen Rent Classified

  • ShareDining
  • KItchen Torrent
  • Kitchup

Dark Kitchen equipment

  • Jongor

Delivery Only Brands

Creating a dark kitchen gives you the opportunity to develop several exciting food brands. If you’re looking for inspiration, you’ll find below a selection of menus that are really crushing it.

  • Kbox
  • Instamaki
  • Taster
  • FoodCheri
  • Honestfood
  • Keatz
  • Poke the bear
  • LoveYourself
  • Frichti

Franchised Kitchens
weungry

Dark Kitchen Menu Consultants
EggSoldiers

5 most common dark kitchen mistakes

1 – Not understanding how delivery platforms work

Delivery platforms like Deliveroo and Ubereats are like search engines. And just as on Google, If you’re not in the first results, nobody will see you and nobody will buy from you. It may feel like you just add your menu and orders will start flowing in, but it’s worth spending the time to understand the algorithms and make sure your dark kitchen is on top of the list. 

2 – Poor inventory management

If you have great WE and sell hundreds of meals but you’re left with 50% waste, you’re dead! This is key! Make sure you have ingredient overlaps between your dishes. If you have several brands, you can even have dishes that overlap between brands (desserts and drinks are a great example). 

3 – Don’t have too many items on your menu

Don’t confuse your customers. Too many options will give your clients decision paralysis.  Focus on 5 – 10 menu items max. This will also help with your inventory management as you’ll also be able to work on items that provide the highest margins. 

4 – You don’t know what your clients want, they do!

I often hear entrepreneurs saying they have a brand new and awesome food concept that will be a massive hit. But they’re just guessing! They don’t really know what their potential clients are looking for. Remember to do your research and look at your competition. It’s often easier to put your twist on a type of food in high demand rather than inventing a completely new category. 

5 – Don’t forget alternative marketing

This is a big problem that we often see. Don’t rely 100% on delivery platforms. If they decide to drop you or to downgrade you, you’re dead. Quickly consider building your own branded acquisition process. A few easy marketing starts :

  • add a flyer to each order giving your clients a chance to sign up to your newsletter in exchange for a free dessert or one of your recipes. 
  • create a loyalty program offering something exchange for X number of orders
  • -show your social media account directly on your packaging and offer incentive to follow or like your content

Dark Kitchen Tips

Tip #1 – Make sure your food tastes good when it arrives!

If you run a restaurant, you can sometimes get away with average food by providing an exceptional service in a beautiful and exciting setting.

The thing is, in the dark kitchen business there is no decor to help you with the setting. And you don’t have much control over the efficiency of the delivery. The only thing you can really focus on is the food. And I’m not just talking about “Are we going to sell Burgers or Tacos?”, I’m talking about making sure that the food that leaves your kitchen is just as good when it arrives.

1 – Hot and cold food should be packed separately

This may seem obvious but there are countless mixed grill kitchens putting salad in their meat containers. Invest in different types of bags and boxes. Get your staff trained up to use insulated hot and cold bags. And make sure the containers are put in the bags in the correct order.

2 – Don’t spill the sauce!

The sauce is a very important part of a dish. It will often be the key ingredient to make those taste buds take off! The easy tip is, of course, to put the sauce in its own container. You don’t want those dreaded speedbumps to spoil the meal.

But also, how about adding instructions for your clients? Where should they put the sauce? Over the fish? Over the veggies? At the end, the client will do whatever they like, but you can build up the experience by guiding them towards the idea that you had for this dish when you created it.

3 – Choose the right packaging

Cardboard, plastic, styrofoam, polystyrene, foil.. so many options, so many shapes, choosing the perfect packaging for your dark kitchen is one of those early nightmares. This is a big big topic and we will dig into this subject in a separate article. But to start things off. Cardboard is better for branding (easier to print on) and is currently a lot more trendy. Styrofoam will keep your hot food hot but is easier to break and does not look so good. It’s often about compromise but also really defining what you want your user experience to be.

 

Tip #2 – How to take awesome food photos for your dark kitchen menu and website ?

1 – Shoot your food pics in natural light

If you illuminate your food with an artificial light you’ll probably add a horrible yellow colour to your photo. Make sure your kitchen is nice and bright (I know, it’s ironic for a dark kitchen ;-)) before you take your pic or even take your food outside for some real natural light. 

2 – Use shadows to your advantage

Be careful here. A badly used shadow can really dim down your picture. However, if you use a strong shadow as contrast to your plate or food box you’ll be highlighting the colours and freshness of your dish. Don’t be afraid, you’ll have to be all in on shadows or do nothing at all. 

If it’s too sunny to control the shadow you can use a photography reflector or even a white piece of paper can do the trick. 

3 – Backgrounds build character

The background that you choose for your pictures will need to match your branding. A dark background will add some attitude to your food, and a light background will bring freshness and cleanliness. It’s probably best to stick to dark or light, nothing in between.

4 – Big big food colours

Be bold with your colours. Whether you go for a light or dark background, make sure your food sticks out. This is also true for the food that will be delivered. Bring delight to your clients as soon as they open your food container.

5 –  Tell your food story

It’s tough. You are not there to sell your dark kitchen dish to your clients. Your photos have to do all the talking and make your customers really build a craving for your menu. Don’t hesitate to add objects to your pictures, or books, or even body parts like an arm or hand to give to your food a story.

 

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