Ghosted

DoorDash's "ghost kitchen" could help restaurants solve one of their biggest challenges

Friday, July 30, 2021 by Robinhood Snacks |
_DoorDash senses a presence [Ralf Nau/The Image Bank via GettyImages]_

DoorDash senses a presence [Ralf Nau/The Image Bank via GettyImages]

Your ghost burrito has arrived... DoorDash's core biz model is straightforward: the gig app connects you to drivers, who pick up your order from restaurants. Now, America's top food deliverer is putting on its apron: DoorDash opened its second "ghost kitchen" — aka: a delivery-only restaurant. Unlike DoorDash's first ghost kitchen, where it only rents space to restaurants:

  • DoorDash is getting its hands dirty with this one. It's doing most of the work for restaurants, from cooking to logistics and hiring (see: DoorDash line cook).
  • The new kitchen in San Jose houses six restaurants who have licensed their brands to DoorDash, including Milk Bar and LA's classic Canter's Deli. DD is teaching its "culinary team" how to replicate their signature treats.

Flipping burgers... and business models. Instead of taking a cut of restaurant sales, DoorDash is giving restaurants a cut of its kitchen sales. Like Uber Eats, DoorDash has never made a profit. But this kitchen model could help it keep a larger slice of restaurant sales, and potentially boost its profit margins. If its cooking experiment is successful, DoorDash could keep its kitchen past November.

  • Spooky stat: Pre-pandemic, ghost kitchens were expected to make up 10% to 15% of the US restaurant industry by 2025. Now, they're expected to make up 21%.
THE TAKEAWAY

Restaurants could become more scalable... thanks to "kitchen-as-a-service" options. Opening new restaurants is expensive, time-consuming, and risky. Restaurant owners never know if their second location could be a hit in L.A. — or if it’ll have a "For Lease" sign in two months. Ghost kitchens remove the brick-and-mortar and hiring costs, giving restaurant owners more flexibility to test new markets.