This is a dark kitchen, also known as a virtual, or ghost kitchen.
It sounds a little intimidating, and for many in the food industry, it is.
These kitchens are creating a whole new ecosystem of food preparation and delivery designed
to cater directly to online customers.
The global online food delivery market made more than $91 billion in 2018 and is projected
to generate revenues of nearly $165 billion by 2024.
The industry’s meteoric rise has seen several large online delivery companies pop up.
In the U.K. alone, Deliveroo, Uber Eats and Just East are battling for a piece of the
multi-billion-dollar pie.
To offer more food delivery options to areas with unmet demand, companies such as Deliveroo
started to provide remote ‘dark’ kitchens’ to restaurants.
These facilities, which consisted of portable cabins and windowless shipping containers
were criticised by some, saying many customers were unaware that this was where their food
was coming from. Despite the negative response, dark kitchens are becoming increasingly popular,
with Uber Eats recently opening its first kitchen in Paris.
And for many companies it’s an industry that is offering new business opportunities.
There are a variety of approaches start-up companies are taking to offer a delivery-only food service.
Some are simply focused on setting up and hiring out kitchens in the right urban locations.
London-based company Karma Kitchen offers shared kitchen space to catering companies
and restaurants that want to set up dark kitchens.
Co-founders and sisters Gini and Eccie Newton started the company after struggling to find
affordable kitchen space for their own catering business.
One of our biggest challenges and close to failures was actually finding kitchen space,
and we just couldn’t believe that there was nothing kind of flexible and affordable
in the market that we could just move into.
It was 24 hours a day, seven days a week rent, but we were actually only using the kitchen
for a short amount of time and when we solved that problem for us,
we ended up kind of solving it for a few more people.
One of those people is Chloe Stewart who is founder and CEO of Nibs Etc,
a sustainable food company that makes granola from food waste.
So this is our juice pulp granola.
So it’s made from fruit and vegetable pulp that normally gets thrown away, so it reduces
waste and it’s super nutritious in the process.
I know time is money in this business, so what do I need to do?
Yeah, so basically if you could wrap this?
So how long have you been making your granola in Karma Kitchen?
I’ve been here just over a year actually, and it was the perfect sort of next step after
being at home because I’ve never spent a lot of time in commercial kitchen so learning
how people organize and keep track of ingredients and date things.
It’s something I wouldn’t have gotten sort of being on my own.
How’s that?
That is a perfect looking granola bag.
Look at that, a pro.
Buying and then renting out kitchen space to businesses like Chloe’s is a model that
even former Uber CEO Travis Kalanick has invested in.
His company City Storage Systems, which in the U.S. operates under the brand CloudKitchens,
acquired dark kitchen start-up FoodStars back in 2018 and with it more than a hundred commercial
kitchens in several locations across London.
Some companies are going even further.
Dubai-based kitchen services company Kitopi has created a cloud kitchen network that not
only provides the infrastructure for food delivery operations,
but also cooks and delivers the food themselves.
We purchase, supply and store your ingredients.
We prepare and cook your food at our facility.
This means restaurants will be providing food to customers that they’ve had no involvement
in cooking and preparing, apart from the use of their name on the packaging.
The dark kitchen market is expected to grow fast.
In Europe last year it was worth more than $250 billion.
It’s set to more than double in size by 2026 to be worth around $650 billion.
Demand for cloud kitchens is being driven by the online food delivery industry.
According to the CloudKitchens website, its commercial kitchens are ‘optimized for delivery,’
and Karma Kitchen says between 30 to 40% of its space is occupied by delivery-only restaurants.
Suhail Hasan is the founder and managing director of Tinseltown Group,
a collection of brick-and-mortar and virtual delivery restaurants.
About three years ago, Uber approached us.
We had zero percentage of deliveries and now we’re between thirty and forty percent and
growing every week. The advantage of coming into like a shared kitchen, it allows you to trial a concept.
Working with Uber Eats they give us a lot of data and information of what areas we need
to be going into, what products are selling.
Very, very low capex compared to what we were used to in the past. Running costs are significantly
less and we’re able to trial a concept and it gives us a very quick and efficient route to market.
Two kitchens down from Tinseltown is another restaurant that has seen the success of
expanding their food delivery operation.
He had this idea, and it was actually a great idea because I think deliveries are the future.
Ivo and Filippo are both from the Italian capital, Rome.
They have one brick-and-mortar restaurant called Al Dente in central London, but following
the increased demand for deliveries they decided to hire a dark kitchen.
Panna cotta, this is the panna cotta.
It’s a really good option.
You’re not locked into a contract.
You pay monthly and you don’t have to risk the amount of capital that we had to risk
initially, let's say, to set up the whole restaurant.
Here you move in, you have everything ready and it’s just a matter of seeing whether
people in the area like what you’re selling.
It’s not something that you usually order to get delivered.
That was our mentality, you know.
So, even then, we were not that sure how good the pasta would be in terms of deliveries,
but it ended up being quite a successful part of the business.
We cover a certain area now in Fitzrovia.
We cover Mayfair, some part of the City, so we’re constricted let’s say.
Most online food delivery companies set a delivery radius, which varies from city to city.
Its aim is to reduce the time food is in transit.
So if a restaurant wants to expand its delivery market size, opening a dark kitchen seems
to be the simplest option.
Hawaiian and Japanese-inspired restaurant Maki & Bowl has done just that.
They have one brick-and-mortar restaurant in west London and have now rented kitchen
space in east London at Karma Kitchen.
We can go to the city and we can like test the waters without having to invest really big.
So having a physical shop, people can come in, they can see our faces, we can smile at them.
Over here they don’t see our faces but hopefully when they do order and it comes to their desk
or wherever they are, they have that first bite and hopefully they’ll fall in love
and say, you know what, this is good.
For restaurants wanting to expand, dark kitchens seem like a great option, but for the customer
ordering delivery, is the origin of their food clear and transparent?
Do people know when they order your food from this site that it’s coming from a dark kitchen?
I think they do because...
Why?
I don’t know actually. Maybe they don’t, you’re right.
You know, maybe they don’t because if you Google Maki & Bowl, we’ve actually got a
physical site, but you won’t find us in Hackney so they might be thinking,
‘How are they here?’
I got a call in the other restaurant from people that order from here, from Karma Kitchen,
and I had to explain to them that your dish came from another kitchen actually.
I don’t know if the person who’s ordering that actually knows that it’s come from
here, but is that a problem?
I don’t think so.
The customer wants a consistent product.
They want a good product that they like with a good brand, and they want it to taste nice
and it needs to be affordable.
Beyond the appeal of dark kitchens, what does this business model mean
for traditional brick-and-mortar restaurants?
In 2019, British TV chef Jamie Oliver saw his restaurant empire collapse with the closure
of 22 of its 25 restaurants, resulting in roughly 1,000 job losses.
He blamed online food delivery services as one of the main reasons his restaurant chain went under.
And as online deliveries become the norm, some property experts believe this will reduce
the number of bricks-and-mortar restaurants,
subsequently increasing pressure on Britain’s local high streets.
Do you think you’re going to close bricks-and-mortar stores?
Because that’s one of the concerns is that high streets are going to suffer?
And you’re right.
You’re not wrong there, high street is suffering.
We started off as bricks-and-mortar, and we’re adapting to how the market changes.
The business case of having a big clumpy restaurant doesn’t exist anymore.
A whole segment which is delivery, it’s here to stay.
There are negative connotations around dark kitchens.
I mean the word dark seems quite sinister.
Why is that?
It’s such a new changing landscape, and actually there aren’t that many in the U.K.
So people panic when it’s unfamiliar.
They’re not comfortable with it, and that’s quite a natural reaction.
It’s a bit separated from the original restaurant perhaps, but it’s the same restaurant, same
people, same owners and the same chefs who are doing all of this work.
If people did come to our kitchen, I think that they would be really happy with where
their food was being produced.
It’s increasingly likely that the food you order online will come from a dark kitchen,
but whether this is a sustainable model for the food delivery industry remains to be seen.
For the moment though the convenience and speed that these facilities offer means many
are betting on them playing a key role in the revolution.
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