Emerging foodservice models are ushering in a new future. Everything’s going virtual, ghost kitchens are becoming the norm, and temporary establishments are getting attention.
Pivots have been survival tactics during a tumultuous period, but it looks like several are here to stay. For many operators, the question is, which one is right for them?
Pop-Ups are Poppin’
In the past couple years, pop-ups have served as pleasant surprises and nice departures from many, many unpleasant surprises. As temporary establishments, they generate buzz among locals who eagerly try to reserve their seats while they can.
Pop-ups can pop up pretty much everywhere—rooftops, existing restaurants, underground, bus stops. And even if the location isn’t creative, the menu often is. Foodies flock to pop-ups for something they can’t get at most restaurants or new takes on their favorites.
Pros: When marketing is done right, pop-ups create FOMO among consumers, leading to high traffic. It’s also a relatively low-cost way for a long-time restaurant to try out new items or for budding chefs to draw investors.
Cons: It’s not easy to determine food and labor costs. Hiring can also be a challenge, since the position is temporary. Pop-ups can get a lot of traffic, but only if their marketing tactics quickly capture attention.
Nightlife Goes Daytime
The pandemic exacerbated a lot of trends, including the decline of lesbian bars. Sadly, less than 20 now remain in the country. How are they looking to survive? One historic bar, Henrietta Hudson, is looking to expand its business model by operating as a bistro and coffee house during the day.
This is just an example of an increasingly common strategy. By expanding on their original concepts, businesses can attract new customers and have something to fall back on if one revenue stream dies down. With casual dining vastly outperforming fine dining, it could benefit upscale restaurants to turn to comfort food. Similarly, breakfast spots could’ve boosted their revenue by putting more emphasis on later dayparts that fared better during lockdown.
Pros: Expanding concepts, menus, and dayparts can serve as a safety net in the event that one revenue stream halts. It’s also an opportunity to expand revenue and clientele.
Cons: This can be a risky venture. Such a big change, particularly in a tough labor market, can spread resources too thin and turn into a money pit. Test it out before making a long-term commitment.
I Ain’t Afraid of No Ghost Kitchen
The terms “virtual brand” and “ghost kitchen” are often used interchangeably, but they are two separate things. A virtual brand serves food and beverages for delivery only. Offerings are sold exclusively online or over delivery apps. Ghost kitchens are where many of these virtual brands are prepared.
Virtual brands exploded during lockdown as brick-and-mortar restaurants transformed their dining rooms into assembly areas for delivery orders and used their kitchens to prepare these offerings. Other virtual brands operate out of virtual food halls or ghost kitchen commissaries. Delivery-only concepts aren’t going away—by 2025, ghost kitchens are expected to account for 21 percent of the U.S. restaurant industry.
Pros: Virtual brands and ghost kitchens allow operators to meet growing demand for delivery orders. Restaurants can expand their footprint and experiment with new concepts without investing in brick-and-mortar spots.
Cons: Sourcing has been a challenge as many operators try to launch delivery-only concepts fast. They need to procure very small quantities and rapidly scale their orders if they spread their virtual brand across the country.
Your Sourcing Solution
Our food landscape underwent a lot of changes since March 2020—and not all of them were bad. The future of the pandemic is still up in the air, but it seems clear that delivery-only concepts, pop-ups, and experimentation with concepts and service models will continue.
Our industry’s future is just one of the many topics we’ll take on at Innovations. Our trade show gives Dot national account operators a chance to interact one-on-one with suppliers and their chefs. They also enjoy a curated line-up of speakers and activities at Operator Insights. This year, we’re excited to welcome David Chang for an exclusive conversation.