Since the COVID-19 pandemic, a new trend in the restaurant industry has gained popularity: ghost kitchens. These restaurants, which exclusively deliver food, typically use online ordering and a cashless transaction system that allows for little physical interaction between customer and host.
In addition to restaurateurs opening or switching to the shadow kitchen strategy, grocers are also exploring this new concept. Euromonitor estimates that ghost kitchens could top $1 trillion in revenue by 2030. In an increasingly competitive market, operators can implement helpful technologies to ensure their success.
Ghost kitchens are heating up the restaurant industry
Consumers now expect delivery of products and services at the touch of an app. Restaurant chains and family restaurants have been forced to transform their traditional operations to meet demand.
Fortunately, the virtual kitchen model is enabling restaurants to cut costs and turn a profit during a global pandemic and beyond. In a recent study, at least 52% of restaurants say they plan to explore the shadow kitchen-only delivery model to support demand and maintain their brand.
Some shadow kitchens are even set up to house multiple delivery-only concepts from different operators who share equipment such as refrigerators, dishwashers, and more. Others are run by a single restaurant offering a wide range of foods and several mini-brands. For example, a restaurant can now become a pizzeria, pasta restaurant, or sandwich shop in the digital realm, while operating from the same shadow kitchen. The model allows several concepts to be tested with consumers without the initial cost typical of building traditional brick-and-mortar establishments. According to Inspire Brands, a leading operator of several popular chains, ghost kitchens can reduce labor requirements by 54%, equipment costs by 45% and energy consumption by 50%. compared to five stand-alone restaurants.
At least 24% of restaurants have started using the third-party ghost cooking method, and nearly half said they would use the method even beyond the pandemic. Meanwhile, 61% of operators are being encouraged to shift their production to offsite supplies.
As the demand for convenience and security, as well as the digital experience, continue to permanently impact restaurant business models, consumers are showing their appreciation for convenient dining options. A recent Deloitte survey found that 79% of consumers say they are likely to order from ghost kitchens. But they also expect orders from ghost kitchens to still come with the restaurant-quality experience they had before the pandemic. Either way, 64% of consumers said they don’t plan to return to their pre-pandemic eating habits in the coming months.
The right technology to support your operation
Whether in a ghost or traditional kitchen, new technologies are essential to adapt to the latest trends. According to a 2021 survey of restaurant owners, 87% of respondents somewhat or strongly agreed that implementing new technology has been critical to their business’ survival during the pandemic.
With the emergence of the Internet of Things (IoT), there has been a major shift in the economy regarding the way we live and work. The IoT is composed of physical objects containing embedded technologies that detect or interact with an internal state or an external environment. This means that the restaurant’s utilities become smart technologies that contribute to profitability, efficiency and scalability.
Some of the smart kitchen technologies that operators can implement include:
- Connected washing dispensers
Connected warewashing dispensers are leveraging the IoT to support cleanliness, food safety compliance, sustainability, and the bottom line. These dispensers, designed for all types of commercial dishwashers, offer better control of wash temperatures, chemical use and water consumption. In addition to providing transparency on chemical consumption, they provide insight into productivity and costs and allow managers to make changes without being onsite.
Maintenance alarms can also remind staff that it’s time to descale the dishwasher, change the water in the tank, or change a squeeze tube. When selecting a smart dispenser, be sure to choose a pre-wired unit that is compatible with solid and liquid detergents, rinse aids and sanitizers. It should also offer a secure platform to review current metrics and historical reports.
For restaurants, food safety is a major concern, as a single incident of freezer failure can cost an establishment over $18,000. Additionally, a loss of temperature control can result in spoiled food or dishes, causing illness, violations of regulatory standards, and damage to reputation.
On average, Food and Drug Administration (FDA) quality system regulations state that restaurant employees spend more than an hour and a half a day monitoring temperatures in the freezer, refrigerator, deep fryer, dishwasher, hot buffet and storage area. If an hourly labor rate is standardized at $14.50 per hour, multiplied by 365 days per year, that means $8,500 is spent monitoring these areas each year.
With smart ovens, refrigerators and freezers, the IoT solves this problem by facilitating better control of equipment, even when managers are not on site. IoT-enabled machines can alert managers to problems early on so they don’t become a financial or safety risk. The IoT can even have a direct impact on your bottom line.
- Better manage food waste
Restaurants use perishable foods, including vegetables, dairy products, fruits, meat, etc. The United States leaves between 125 and 160 billion pounds of uneaten food per year, or about 40% of our food supply. Restaurants are responsible for £22-33 billion a year and need to use ingredients efficiently to minimize waste and lost profits.
With the help of easy-to-install IoT sensors, you can reduce the amount of food destroyed in your inventory and make better use of what’s available, including keeping track of product expiration dates. By using IoT, you can reduce food waste by around 1% to 4%. The use of IoT in kitchens and grocery stores is expected to help reduce global food waste by 20% over four years and by at least 50% over the next ten years.
Additionally, product out of stock alarms allow restaurant managers to remotely control which items to order as needed. In this sense, less food is wasted and the information provided helps to better understand how to manage stocks.
The future of catering?
Although the pandemic was initially detrimental to the restaurant industry, it has also brought about an era of change and innovation. There is and continues to be a strong demand for restaurant-quality food and cleanliness in the kitchen, regardless of which consumers dine in or out. The industry has also seen major technological shifts that have kept it afloat during this time as the IoT has succeeded in improving outdated management methods. Overall, convenience and safety remain at the forefront of the industry as it continues to move forward in the wake of adversity and innovation.