Billions of dollars have been poured into delivery companies such as Deliveroo in Europe, Swiggy in India and DoorDash in the US, but now the focus is switching to kitchens that only service food-delivery customers, dubbed “cloud”, “ghost” or “dark” kitchens.
These combine preparing food in advance with under-used premises and what the Financial Times calls “algorithm-driven optimisation” to lower costs and boost productivity.
Start-ups competing to find the perfect recipe for success are, however, focusing on diverse areas.
For some, the focus is on real estate – establishing and then hiring out kitchens in urban areas where demand is highest. An alternative is to make use of out-of-business restaurant premises; this is the approach being taken by a start-up from Travis Kalanick, co-founder of Uber, whose City Storage Systems trades as CloudKitchens in the US, and London-based Karma Kitchen.
Such operations, in turn, create opportunities for others to focus on actually making the food, such as KitOpi, which is based in Dubai and operates in London and the Middle East.
Meanwhile, Kitchen United, a Google-backed start-up, is planning to launch a string of delivery kitchens in the US. It charges a fee to users that includes the premises, back-of-house services like dishwashing, and also use of its digital system for taking online orders from diverse delivery apps.
The big names in the food delivery business are looking at the same or similar concepts: Deliveroo has trialled “Editions”, sometimes preparing food in converted shipping containers in car parks to lessen the time from order to delivery; and Uber Eats has opened its first kitchen in Paris.
4Meanwhile, other businesses are looking at utilizing other assets. In the US, ParkJockey, a Miami-based start-up that makes tech for car parks, now has some 4,500 locations and has been experimenting with kitchens in car parks since 2016 when it opened a site in London.
“I do see parking garages as the warehouses of the new economy,” Ari Ojalvo, ParkJockey’s chief executive told the FT.
“The idea of putting a kitchen inside a container and then dropping that into a garage came very naturally to me.” The premises are well ventilated, quiet and close to customers,” he added.
Sourced from Financial Times; additional content by WARC staff