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:
£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+
£540 000/year: 15 kitchens x £3 000
- 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
Hoxton Ventures (investor)
Dark Kitchen Food Delivery
Dark Kitchen Software
Dark kitchen to rent
Dark Kitchen Rent Classified
Dark Kitchen equipment
Delivery only brands
Poke the bear
Dark Kitchen Menu Consultants
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.
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.
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.
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.