Ghost Kitchens: Food

Delivery Amid Lockdown

Michael Schaefer, Global Lead, Food and Beverage
July 2020
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ABOUT EUROMONITOR INTERNATIONAL 3

Euromonitor International
network and coverage

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ABOUT THE SPEAKER 4

About the speaker

Michael Schaefer
Global Lead, Food and Beverage
Euromonitor International

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Overview
Defining Ghost Kitchens and Virtual Restaurants

How These Formats Are Changing The Industry

Case Studies

Takeaways and Future Scenarios

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Ghost kitchens
Cooking facilities producing food only for
delivery, with no eat-in or customer-facing
areas.

Virtual restaurants
Prepared food brands that exist only online,
with no physical locations.

© Euromonitor International Image sourced from Rebel Foods

GHOST KITCHENS: FOOD DELIVERY AMID LOCKDOWN 7

Creating a new model for existing restaurants

Opportunities Challenges

Operations designed for delivery New competition

More space for experimentation Commoditisation

New prepared food occasions in play Who controls the data?

Real estate as a service New uses for physical restaurants

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Global foodservice delivery sales more

than doubled from 2014 to 2019

52% of global consumers are

comfortable ordering from a delivery-
only restaurant (no physical outlet)

Dine-in traffic accounted for 80% of

restaurant sales in China and Brazil,
70% in India and 50% in the US in 2019

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A new food and drink ecosystem,

supported by third-party delivery

Ghost Grocery Convenience Next-gen Automated

Restaurants
kitchens stores stores vending warehouses

Third-party delivery

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What’s in a $3.00 cup of coffee from Starbucks?

Ghost kitchens change

the cost structure of
prepared food. Coffee
Milk
Packaging
Profit
Tax
Rent and staff costs Staff
account for 60% of the Rent
price of a Starbucks
latte.

© Euromonitor International Source: Financial Times

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Cheaper, faster, more reliable delivery can capture…

50% of 50% of 35% of 30% of 25% of 15% of

drive-thru takeaway ready meals packaged eat-in packaged
foodservice foodservice cooking foodservice snacks
ingredients

$75 bn $250 bn $40 bn $100 bn $450 bn $125 bn

Ghost kitchens could create a $1 trillion global

opportunity by 2030.
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GHOST KITCHENS: FOOD DELIVERY AMID LOCKDOWN 12

When a daily activity becomes an occasional hobby

Bottom right image sourced from HelloFresh

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Ghost kitchens are one step in

an ongoing evolution

1998-2010: 2010-2015: 2015-2020: 2020 onward:

Aggregation Expansion Adaptation Innovation

Grubhub UberEats Ghost kitchens Virtual

Just Eat Meituan restaurants
Dianping and beyond

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7,500+ 3,500+
China India

How many ghost

kitchens exist
today?

1,500 750
US UK

Includes third-party ghost kitchens and virtual restaurants

© Euromonitor International Source: Company reports, Euromonitor International estimates
GHOST KITCHENS: FOOD DELIVERY AMID LOCKDOWN 15

What are the current business models?

Third-party ghost kitchens Virtual restaurant operators Delivery aggregators

Images sourced from companies’ websites

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New players, new

Outlet formats diversify
models

More prepared food

Delivery from day one
everywhere

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GHOST KITCHENS: FOOD DELIVERY AMID LOCKDOWN 17

How are major chains responding?

Starbucks: Partnership and Customisation Panera Bread: Segmentation and Control

Partnered with UberEats, Alibaba Panera employees fulfil deliveries

“Star Kitchens” in HeMa supermarkets Special delivery and pickup areas within stores

Pickup only locations in New York Separate kitchens within stores

Office catering services drive long-term

Central kitchens for food items relationships

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GHOST KITCHENS: FOOD DELIVERY AMID LOCKDOWN 18

India’s Rebel Foods builds a delivery-only empire

▪ Indian wraps chain with 75 brick-and-mortar

outlets reimagined into a virtual restaurant
chain with 11 separate online-only brands (no
physical restaurants)
▪ Operates more than 200 ghost kitchens across
18 cities
▪ 2019 revenues of $40 million
▪ Central kitchens for multiple brands and
menus
▪ Purchasing built around cross pollination

Image sourced from company’s website

© Euromonitor International

David Chang’s Fuku
brand partners with
Reef Kitchens
Fried chicken chain uses food carts and
parking lots to support delivery service.
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Celebrity chefs, quick-service restaurants,
packaged food companies and grocery
stores, among others, turn to ghost
kitchens to fuel multi-city expansion.
Current pandemic will lead to more real
estate repurposed for delivery and
takeaway traffic.

Rappi partners with
cooking network and
meal producer
Ghost kitchens allow for new business
models and product offerings.
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Tastemade: Online cooking
videos, recipe sharing
Simpleat: Frozen ready
meals based on Tastemade
recipes, prepared offsite
Rappi: Ready meals,
ingredients ordered on
Rappi, delivered via Rappi
Images sourced from companies’ websites
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Three future scenarios

Ghost kitchens Distributed Livestreaming

as beverage production food culture
hubs

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Optimising for Retail, foodservice New players,

delivery barriers fall new real estate
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Thank you
Michael.Schaefer@Euromonitor.com
Michael Schaefer @mschaefer84
Global Lead, Food and Beverage Linkedin.com/in/mschaefer84
Blog.Euromonitor.com