STARTING A VIRTUAL RESTAURANT
The rise of virtual kitchens, also known as virtual restaurants, has taken the food and hospitality industry by storm in recent years and has grown even more influential in the past six months. In today’s landscape, the prospect of opening a new restaurant is daunting, and for a good reason. But if it’s a goal you’ve been striving for years, or it may be a lifelong dream you wanted to achieve, virtual restaurants could be your saving grace.
The food delivery services market was worth 8.5 billion in 2019, and 7.5 billion food deliveries were made in the same year. The number of food deliveries in the US has increased by 39% over the past three years, and with this trajectory continuing to establish itself, there is no more appropriate time to start your restaurant, but not a traditional one as we know it creates a virtual restaurant.
Since 2014, online orders have grown 300% faster than restaurant traffic. To keep up, restaurants have done everything from designating shelves to reducing food courts to make room for the traffic.
This explosive growth also allows restaurants to think creatively about how they can capture even more outside activity. Enter the virtual restaurant: an in-house solution to dynamically and economically increase your offsite order volume through new positioning concepts and opportunities. There are many benefits to operating a virtual restaurant beyond your current location.
CHALLENGES OF STARTING VIRTUAL RESTAURANT.
Most virtual restaurants exist on GrubHub/Seamless because they are still the most frequented sites for food delivery. To be listed on these platforms, restaurants have to pay a commission of up to 30% of their total revenue, which can be a considerable burden. There are still other challenges such as quality packaging, efficient handling, and delivery.
Additionally, it is more challenging to resolve customer complaints when customers are dining at home. In an interview with Eater, a delivery-only managing partner, Tim Powell, explained when he might bring alcohol to a guest or deal with an issue onsite for more waiting time, or if an employee material is exhausted, in virtual restaurants, “This is the hardest part, the inability to fix something quickly.”
To solve these problems to some extent, there are apps like Tookan App or delivery services like Favor, which allow customers to track their orders in real-time and notify customers via SMS and push messages on their cell phones.
BENEFITS OF VIRTUAL RESTAURANTS.
Virtual restaurants are controversial to some extent. Consumers order online, thinking the food is from their favorite noodle shop, but the restaurant may only exist online. Or the idea that your Sushi is made in the same kitchen as a greasy burger can detract from the customer experience and perception of food quality. But these concerns, versus the benefits, may not be accurate for the restaurant business.
Here are five reasons to start a virtual restaurants are changing the delivery game for the better.
1. Food delivery is the future
Even before COVID-19, the restaurants in some areas were dwindling, thanks to the convenience of food delivery apps. But now, food delivery from your favorite restaurants has become a daily necessity. This new world is expected to change soon, so the popularity of virtual restaurants will only increase, making it easier than ever to find a niche in this booming market.
The kitchen space should offer fast delivery to customers, whether you are a virtual band or a traditional restaurant that has evolved with the times. If you need more faith, the truth is in the numbers. Since 2014, food delivery has grown 300% faster than in-person meals. Millennials account for 59% of all restaurant takeout or delivery orders. 60% of people in the United States choose to deliver at least once a week. Food delivery revenue could grow from $365 billion in sales (20% increase) globally by 2035.
2. Less expensive
Starting a restaurant can cost thousands of dollars, from designing the concept, renting space, buying equipment, and paying for the front and back of the house. Restaurants can also fail in the first place, making your investment a risk. Anyone in the industry knows it’s like walking a rope.
However, keep costs down in every category of your business, allowing new restaurants to cut startup costs in half. Virtual restaurants only need to deal with online customers and support a single kitchen staff. Renting a kitchen in a virtual restaurant is cheaper than a brickyard. You can cook, create an online presence, and start selling right away.
3. Amazing Profits
Virtual kitchens eliminate many startup costs, but the concept also removes many of the day-to-day costs of running a restaurant. The most important thing is work. Labor costs can be up to 20-30% of total income. You don’t need a host, dishwasher, or waiter to take your order in a virtual restaurant.
Your entire business happens in a smaller space, with no direct customer contact to deal with in the first place. Food costs take away another chunk of your income, but virtual restaurants often focus on a niche or limited menus. By offering only certain dishes, you have the opportunity to improve recipe costs and reduce waste.
The sole purpose of delivering a bespoke experience for food delivery – from tools and processes to bespoke spaces and technology – cloud kitchens make order fulfillment easy. Additionally, restaurants can operate multiple brands from a single kitchen, making it easy to prepare various ingredients for different types of menus and dishes.
Plus, as stated earlier, there are countless vendors out there whose whole range of activities help your restaurant run a successful ghost kitchen – from helping with fine-tuning your concept and testing to proprietary technologies that take charge of the supply chain, logistics, and execution and management facilities.
5. PROPERTY AND LOCATION
One of the most significant advantages of a cloud kitchen is its flexibility regarding property costs and location. For an authentic restaurant, the rent represents a high percentage of the overall budget. However, cloud kitchens can work in many areas that a traditional location could never do – like basements, catering kitchens, warehouses, or parking lots.
This flexibility can be a big plus when you’re short on cash but have a loyal customer base ordering delivery. When looking for the right location, make sure that the place where you open a cloud kitchen is always in high demand. For example, if most of your customers live in the suburbs, but you open a kitchen in the city center, you may not be able to deliver the quick and delicious meals your customers expect.
ADVANTAGES OF VIRTUAL RESTAURANT
The benefits of virtual restaurant branding for restaurant owners are apparent. It offers the opportunity to innovate, develop concepts and reach a wider audience with much less risk than the retail sector.
No storefronts, no seating worries, just pure culinary creation.
The other thing that virtual brands can do is record their customer data much more quickly. They can track complaints, see precisely what people like and don’t like, and get real-time feedback on the foods they make.
If they use a third party like Deliveroo or eat, they can also be helped to identify regional demand for specific items and track their success.
In the United States, it is believed that if your restaurant doesn’t deliver, you don’t exist. This is proof that the growing demand for food online and digital, as noted at the start of this article, is only growing.