Ghost kitchens have been one of the dominant topics in the foodservice business in 2020, and not just since Covid-19. Successful concepts are celebrated and challenges discussed. The consensus is that ghost kitchens are here to stay. The only remaining question is: at what price?

Anyone who has opened a foodservice magazine in recent weeks would have noticed articles on the subject of ghost kitchens, virtual kitchens, or cloud kitchens. The topic is everywhere in the industry. We are looking at a concept that only a short time ago was little known, which is precisely why it has such an effect.

Producing dishes detached from any contact to the customer and distributing them via delivery services, serving different concepts from a central production kitchen, or even uniting different companies in one kitchen seems to be a smart move, not only in terms of possible further pandemics. The concept makes much sense, especially from an economic point of view.

“The Messiah!”

The question may sound strange, but are you familiar with Monty Pythons’ “Life of Brian”? In typical Monty Python fashion, the naive and unassuming Brian is worshipped as the Messiah through misunderstanding and confusion. No matter what he tries, the crowd sees his every move, his every word, as further proof that he is the chosen one. Of course, Brian ends up on the cross, too. With this satire, Monty Python’s comedians wanted to point out the dogmatism of religions: the adherence to opinions and patterns of belief, the mindless running after something that is supposed to bring salvation.

Meanwhile, the handling of the Ghost Kitchen idea seems to be similarly dogmatic. Well-known and highly successful concepts such as Reef Kitchens (Miami), Kitopi (Dubai), or startups like Karma Kitchen (London) are readily sold as the Holy Grail of a new reality. Traditional foodservice approaches a discontinued model. Mom and Pop restaurants? At best, something for romantic cranks. What doesn’t fit into the positive image is made to fit. Furthermore, examples such as Google Venture’s (GV) $50 million investment in Kitchen United and also the real estate companies Divco West and RXR fuel the impression that the way forward is ghost-, virtual-or dark kitchens alone.

Significantly where a large number of companies invest a lot of capital: it should be clear that with a few exceptions – it is primarily an investment that should bring the fastest or most secure ROI possible. There is nothing wrong with that, quite the contrary: such investments enable startups or Ghost Kitchen on an expansion course to quickly realize goals and offer strategic security, especially in times of pandemic.

Unfortunately, little is said about lived sustainability and social responsibility. Well, why should we? Because thanks to Covid-19, we were able to focus entirely on the topics of viruses, lockdowns, and vaccines for a short time while we indefinitely ignored burning issues for the time being. The good thing is: unresolved problems are damn good swimmers and are now slowly resurfacing. Centralizing foodservice production may well exacerbate some of these problems.

Hygiene and Safety

There is a broad spectrum in the industry, particularly in the area of food safety and hygiene: from model companies with impeccable hygiene concepts and cleanliness to the bad apple from whose kitchen you wouldn’t even want your dog to be fed.

The devil is in the details here because a good hygiene concept and HACCP guidelines do not mean that they are implemented and executed. We’ve heard again and again in recent months of frightening violations in terms of hygiene-from spoiled food to parasite infestations, especially in the field of pop-up ghost kitchens.

There are many reasons for this, but failures in hasty planning and implementation of the production kitchen, as well as rapidly changing and under-qualified staff, stand out in particular. These two points alone are enough to cause significant problems in preparation, storage, and distribution to the customer. More so, it might not only pose a risk to the business’s survival but especially to the health of trusted customers.

Also, local food safety monitoring authorities are often understaffed or overworked and can rarely conduct inspections regularly. This circumstance can lead to the less strict implementation of one regulation or another to save costs.

The dynamism and flexibility that are a significant competitive advantage in Ghost Kitchen also lead to challenges in staffing. In an environment of rapid change, fluctuating staff, and business partners who want to try their luck in a shared kitchen. Who can guarantee that standards will be maintained and that carelessness will not jeopardize the entire production kitchen? How is an urgently needed qualification of staff via training to take place within this dynamic?

The solution would be to recruit specialists specifically for the individual kitchens or even independent experts who would ultimately ensure that all necessary regulations are complied with and that the hygiene concepts are continually adapted and developed. Unfortunately, this approach is expensive and will only be implemented in a few Ghost Kitchens, most likely, in operations with a strong brand as a partner.

This is precisely where digitalization in the kitchen so often shied away from, although it can bring significant benefits and support production reliability – both in hygiene and efficiency.

Groundhog Day… Staff

No matter what industry we’re talking about, finding and, more importantly, retaining good, qualified staff is getting harder – and more expensive. The average turnover rate in the U.S. in 2018 was an astronomical high of 74.9%, while European figures were around 71%. Even the employees freed up by the pandemic, resulting in a short-term boost to the labor market, are at best a temporary effect.

It will be interesting to see how Ghost Kitchen will change the staffing landscape in the foodservice industry. Also, smaller margins and the need to produce food as efficiently as possible in centralized production units would increase the burden on workers in terms of flexibility, but particularly in terms of salary.

Employees with entry-level qualifications may find their opportunities here. Still, traditional cooking in a team focused on further qualification and perspective will tend to decline. Ghost Kitchen caters to the thought of a gig economy rather than a long-lasting working relationship.

This will create additional difficulties for an industry that has been severely damaged by the pandemic and is facing a massive increase in insolvency, especially among smaller businesses such as mom and pop restaurants. In the long term, a desolation of the foodservice landscape will lead to massive losses in young employee’s qualifications unless suitable concepts prevent this. QSR’s and Ghost Kitchen concepts will not help produce creative young culinary talent in the foreseeable future either. We would do well to promote broad-based, individualized training, especially for the industry’s future, and to focus on creativity and craftsmanship. However, if we fail to do so, we will have to say goodbye to gastronomy as we know gradually and hopefully appreciate it.

Sustainability

Sustainability in the shadows? – Photo by shruti dadwal on Unsplash

Our pain point: Sustainability or Greenwashing?

Across society, there is a “knowing-doing gap” when it comes to sustainability and climate protection. We know very well that if we continue as we are, we will be walking into a disaster. Still, we are not acting accordingly to avert the danger.

Furthermore, in California in 2020, when vast areas of land were destroyed by fire, the German magazine Der Spiegel ran the headline “Climate change shows its face – it’s a grimace.” Hence, in recent years, the effects of global climate change have become increasingly apparent, even if some confused lobbyists and their political aides claim otherwise. The impacts are getting closer and closer – as could be seen impressively, not only in California. We have seen this grimace too often already. So we have a problem—a big one.

However, before the pandemic, the danger of climate change was discussed in a broader view fueled by Fridays for Future and others; Covid-19 makes one feel that on top of the two steps forward, three steps back have been retaken. Surprisingly, this pandemic threat should only be a brief blip on the radar as opposed to the threat from climate change.

We have not been able to stop the effects of global climate change for a long time. Still, we can mitigate the impact if we – on the part of politics, society, but above all, every individual – finally implement climate targets that have been set.

Investing in sustainability is an excellent opportunity for the foodservice industry if accompanied by honest intentions and reasonable efforts and does not end up in greenwashing. Re-branding with green logos, beautifully designed web pages on CSR, and the promise to “really do something now” may pass for marketing gimmicks, but it’s a long-term deterrent to customers focused on these issues. Even worse: some think they are so stupid that they fall for it. Honestly, why not take the competitive advantage for yourself by being more serious than the competition about sustainability at all levels?

Ghost kitchens occupy a unique position here and are reaching their limits in terms of sustainability even faster than traditional restaurants. Ghost kitchens are also known as dark kitchens. Obviously, in terms of sustainability, that’s precisely what they are: much of what happens in ghost kitchens remain hidden in the dark. It becomes almost impossible for customers to understand or even verify the anonymous ghost kitchen in terms of sustainability unless you believe the green paint job on the website.

How is work done in the kitchen, what working conditions do the employees face? Are different concepts and companies that join together to form such a kitchen or rent parts appropriately demarcated? Are sustainability concepts communicated to customers followed through, or are they nothing more than just this coat of green paint for the gray area? It is to be expected that the topic of greenwashing will increase enormously, especially in this area.

No matter how sustainable a disposable package is, for Ghost Kitchens, it remains a package and costs resources for everyone else. No matter if kitchen space is shared and used efficiently if the equipment does not meet the requirements of modern food production. No matter if jobs are created and employees are hired, if ghost kitchen does not offer a real perspective and people are run into the ground in the low-wage sector.

Ghost Kitchen would do well to take up the cause of sustainability and claim the benefits for themselves. This will only succeed if ambitious but realistic strategies are developed and functions such as a sustainability officer are implemented.

From Ghost Kitchen to Ghost Ship?

One thing is sure: not all Ghost Kitchen will survive. It is currently believed that the 80/20 rule will take effect here as well, and about 80% will close as early as 2021 unless an established brand as part of the Ghost Kitchen follows through. For those struggling to compete in the market, sustainability strategies will play only a minor role; understandable when you are up to your neck in it.

Quick success and cooperation with others can be both a curse and a blessing for Ghost kitchen, because in addition to flexibility and a high degree of customizability of their order, many customers today expect concepts with a soul and authenticity, a point that 90% of Millenials cite as particularly important.

There’s no question that there’s a lot of potential in Ghost Kitchen, especially when it comes to sharing resources efficiently, minimizing risks, and, above all, cutting costs through innovative concepts. However, as with any hype, there is also a risk that the quick success of these concepts can blind you to unresolved issues or push them aside for later resolution – Ghost Kitchen, in particular, need an answer to problems such as staff turnover, rising raw material prices and sustainability.

Across the foodservice sector, some challenges have gone unresolved for years. Many problems have been with the industry as dead weight for too long. Ghost Kitchen operators and users, despite new approaches and strategies, take a lot of this ballast with them and must also position themselves to solve these tasks in the future. Moreover, it is not an easy task, but this is precisely where the opportunity lies in setting an example with Ghost Kitchen and doing the right thing. Ultimately, the customer decides how big a share ghost kitchens will have in the foodservice industry and what the future holds for mom & pop restaurants.

 

In personal designations, the masculine designation has been chosen for better readability, which includes the feminine on an equal footing.

© Sascha Barby, 2021. All rights reserved. Title photo by David Clarke on Unsplash

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Sascha Barby

Sascha Barby

Sascha's passion for food and the foodservice industry has driven him since he first worked in the kitchen. Projects abroad and the diversity of the industry have only increased his enthusiasm. Started as a Chef in various restaurants in Germany and Canada, completing his skills with an MBA, he now works at Rational AG in marketing.  Sascha lives with his wife and children in Bavaria near Munich.

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