by Barb Mueller, MBA, RDN; Laura Suda; Bridget May, MA, RDN, FAND
Food Program
“Ghost kitchens,” “dark kitchens” and “virtual kitchens” are the big buzz in retail foodservice. It sounds spooky but it really isn’t—it’s essentially a restaurant without the dining space. They fulfill online food orders for delivery using apps like Grubhub, UberEats and DoorDash or with their own delivery operation.
So, what do ghost kitchens have to do with health care? Everything!
Virtually every hospital has a production kitchen, has staff that understands the need for product consistency and has been significantly impacted by COVID both in how they serve the facility’s employees and most recently those who are visiting patients.
Stepping into the ghost kitchen trend to support essential workers, and even their families, is a concept that exemplifies what food service operators do best—making the most of resources, learning from others and creating opportunities.
A great example is UNC Health in Chapel Hill, North Carolina, which experienced a significant drop in food sales during the first months of the COVID pandemic. They needed to come up with a new concept that could safely and efficiently provide food service to employees and restore a revenue stream for the hospital.
The hospital’s third shift was the most impacted by COVID from a food perspective. They had a single limited dining option open at night—Starbucks. If meals were ordered from outside the campus, staff were away from their stations too long collecting their orders for various reasons.
The UNC team created an app, “Kardia After Dark”. Three staff members run the nighttime operation which includes food production and delivery to the nurse’s station. The app allows for ordering, paying, and setting delivery times. It also allows employees to pre-program their favorite meals for reorders. Everyone wins—the food service team provides a service with reduced labor cost, improves productivity of nursing staff, and provides an additional revenue stream.
Kitchens at other health care facilities answered the call to support essential workers and their families by offering takeout meals and selling pantry essentials. This reduced visits to the store resulting in decreased risk of exposure to the virus. These options helped staff to continue working and safely feed their families.
Pundits say this is a short-term, strictly opportunistic trend, noting that the market is over-saturated and delivery services will no longer be viable post pandemic. Will there be enough business for everyone? Probably not. As any new concept matures, there will be survivors and those who are not successful. However, for hospital kitchens, the pandemic may have revealed opportunities not apparent in the past. And a ghost kitchen may open some new doors for them to create a revenue stream and better serve patients and staff as well as the community.
Considerations for starting a ghost kitchen might include:
- Low capital expense and initial investment
- Quick scalability of the business
- Ability to market traceable spend through social media
- Allows for efficient traceable spend and the ability to build a business model against the data
- Increased brand growth as well as footprint
- Potential to offer several recognized brands through the same operation
- Opportunity to test market potential new concepts with minimal outlay
Several organizations see a significant opportunity in this trend and ghost kitchens are projected to reach a $1 trillion global market by 2030. In fact, the U.S. currently has 1,500 ghost kitchens, China has 7,500+ and India has 3,500+, according to Euromonitor data. UberEats, Reef, Kitchen United and Franklin Junction are just a few of those virtual kitchens expanding and anticipating significant growth post pandemic.
Further, many brands have no or very few brick and mortar operations and rely on virtual kitchens and delivery services to increase productivity and generate revenue. In just a short time, MrBeast, WOW BAO, Nathans Famous, Cosmic Wings and Wings of New York are recognized as off-premise dining experiences with dramatically increasing sales. In an industry where profit is a long time coming, many of these concepts have shattered the ceiling in short-term profitability.
Production varies with some having central production kitchens and separate execution kitchens. Other operators may have all production along with delivery and take out in one location. Food service distributors have jumped in to support the concept. They have developed tools, technology and website development, marketing materials and menu guidance to empower customers to develop their own ghost kitchen concepts.
The scenarios are numerous with the concepts launched over the past 12 months and many entrepreneurs are jumping on the bandwagon. Will the ghost kitchen concept survive after the pandemic subsides? It’s too early to tell but there are so many learnings from this adventure. I know foodservice operators in health care facilities will take these lessons and dream big, adjust and deliver what meets the needs of staff and patient in their facility.
About the authors
