“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:
Barb Mueller, MBA, RDN, has more than 30 years of food industry, health care and group purchasing organization experience. Barb is a registered dietitian nutritionist and has an MBA from Northern Illinois University. Her clinical nutrition background includes experience in both acute and long-term care settings. Barb also has 11 years of experience as a health care specialist in the food distribution industry and five years of sales experience with a foodservice management software company. Barb joined MedAssets Supply Chain Systems in 2007 as a food and nutrition specialist where she worked with customers to help maximize contract utilization, identify savings opportunities and onboard new customers. She has continued in a similar role with Vizient.
Laura Suda has more than 35 years within the food industry, including restaurant, health care and group purchasing organization (GPO) experience. Laura’s career started in the restaurant industry and from there transitioned into the foodservice distribution arena where she spent 30 years. She began as an internal account coordinator and transitioned to an account executive managing health care, senior living and concession accounts working with various GPO’s. Laura joined Vizient in 2018 as a program services manager where she currently works directly with members to assist with identifying and maximizing program savings, new member onboarding and conducts various member and internal food program trainings.
Bridget May, MA, RDN, FAND, is a product executive with Vizient Inc. She is a registered dietitian nutritionist with an MA from Webster University. Her career encompasses more than 20 years of clinical and food service operations in acute care facilities, followed by an additional 20 years in the group purchasing industry. Bridget joined the legacy group of Vizient companies in 1998 and has played numerous roles within its food program. Her varied background and lifelong learning support her current role in both member-facing and supplier-facing efforts as well as food program communications, education opportunities and event coordination.