Events & Trends

Ghost Kitchens: An Opportunity For Growth During A Pandemic

Food service establishments have lost the majority of dine-in traffic and have been forced to shut down, either temporarily or permanently due to Covid-19. With thousands of restaurant closures across Canada in 2020, the explosion of food delivery has introduced the industry with an opportunity to explore a new income stream.

The Rise of Food Delivery

Thanks to 3rd party mobile delivery apps such as Skip The Dishes, DoorDash, Foodora, and Uber Eats, sales from food delivery services have more than doubled in 2020. With over a quarter of Canadians using food delivery services this past year, the options are endless and opportunity is present.

As a result, chefs, entrepreneurs, and large food service chains are diving into the world of ghost kitchens – either by renting out their facilities or establishing new concepts in rented spaces.

What is a Ghost Kitchen?

A ghost kitchen – also known as a virtual kitchen – is a commercial kitchen facility used for producing food under a delivery-only business model. There is no guest traffic or service area as these businesses do not have a brick-and-mortar location.

Ghost kitchens primarily operate out of food trucks, shared restaurant space, or commissary kitchens.

Giants such as Walmart, Fatburger, UberEats, Starbucks, and Doordash are establishing virtual kitchens as a mainstay for years to come through their own investments into the food delivery world.

It’s easy to see why; facility operators are earning a new stream of income through rental of shared space.

On the flip side, if you are looking to establish a virtual brand, renting a facility will enable you to:

  • Lower startup costs
  • Optimize variable costs
  • Improve business quickly 

Lower Startup Costs

Rental of a commercial kitchen facility saves you a hefty initial investment in what would normally go to construction and renovation options, tables and chairs, and essential restaurant equipment and supply associated with operating out of a brick-and-mortar location.

The space you rent will include all the facilities you require for your unique concept. You only pay for what you need.

Commissary kitchens such as The BC Kitchen offers fully-equipped kitchen facilities with flexible payment options suited to your next big food-delivery concept.

Optimize Variable Costs

The delivery-only nature of ghost kitchens gives entrepreneurs the ability to optimize food and labour costs by spending only on the necessities. Again, you only pay for what you need.

No dine-in or service space means less staff to schedule – no servers, no bussers, no cashiers. Just the staff you need to produce the food.

Furthermore, ghost kitchens enable you to operate with limited, niche menus, allowing you to focus the operations around less inventory than your standard restaurant. Optimizing these costs gives your operation a competitive edge against independent restaurants and larger chains who are tied up with higher costs.

The money you save will allow you to stay price competitive amidst the heavy competition and rising food delivery charges.

Improve Business Quickly

The absence of a brick-and-mortar location allows you to implement new business strategies, make decisions more quickly, and adapt to food trends easily since you are not tied up to a physical location or higher costs.

This allows you to move locations, experiment with menu items, and test out new branding strategies at a much quicker pace than many of your competitors.

Establish Your Ghost Kitchen Today

Babak Food Equipment has been Canada’s one-stop shop for chefs, restaurateurs, and entrepreneurs for 20 years. Although we are living in unpredictable times, we are here to help you set your foodservice ventures up for success as you look for ways to pivot your business.

Ensure your facility is fully-equipped and ready-to-go for rent with essential commercial food equipment, supply, and maintenance services from Babak Food Equipment.

If you’re looking to rent a ready-to-go facility to establish your unique virtual concept, The BC Kitchen is a superb commissary option for launching your business right away!