Another legacy brand looking to capitalize on the expanding chicken market, Bloomin Brands created Tender Shack in 2020. They're not just relying on their brick-and-mortar presence," Green said. Basically, previously the testbed for restaurants is food trucks, now it is delivery through ghost kitchens. Cosmic Wings now provides its Cheetos-flavored wings and fried cheese bites in Applebees kitchens nationwide.

I expect that this will gain traction in the near future. Such facilities are often used by multiple chefs or restaurant operators in coworking spaces. Virtual brands could support respondents' desire for customizable direct ordering channels, as 97% of independents such channels are important. Virtual restaurants and ghost kitchens share the goal of establishing virtual brands and capturing new customers and orders through food delivery. Web page addresses and e-mail addresses turn into links automatically. The model is quite similar and involves online ordering systems (website, payment processing), third-party apps and delivery services. "The digital footprint for brands becomes more and more important.". Increase your revenue potential with your own virtual restaurant or with our licensed concepts. Do you see many virtual restaurants eventually establishing physical locations? In February, on the verge of its national launch, 80 percent of the companys customers for Tender Shack had never ordered from any of its legacy brands, including Outback, Carrabbas, Flemings, and Bonefish Grill. Available on major third-party delivery platforms, consumers can order fresh chicken tossed or dipped in honey Sriracha, Carolina gold, BBQ, smoky chipotle, fire, buffalo, Thai, and Thai buffalo. Using third-party order data, our concepts are built to be price competitive. Its a leveraging of existing assets.". Another way to take advantage of restaurant analytics is by creating multiple menus, which lets you cater to different types of customers. Creating Culinary Communities, or C3, has been forging virtual brands left and right.

However, the ability to reach customers and deliver one-of-a-kind experiences has never been easier. A virtual brand can help you generate incremental orders when in-restaurant dining is down. And there are a few main reasons for this: The virtual dining concept eliminates dine-in space areas from the business model, one of the core elements of traditional restaurants.

Restaurant chains as disparate as Hooters and Wingstop have joined the list of restaurants adopting the virtual brand model. Access powerful marketing and advertising proven to reach new customers and build fans. Get access to exclusive media, marketing and PR support from Grubhub and MasterChef, including exposure on national TV. One common type of virtual brand is where a brick-and-mortar restaurant uses its existing space and equipment to spin up one or more virtual brands. Whether youre looking to start one virtual restaurant or many, we can help you pick the right path to success with delivery-only concepts. They can do consumer testing before going through the expense of creating these new brands. JAILBIRD delivers classic wings and tenders while Big Belly Burgers is known for its humanely raised beef. We take care of the menu, branding, packaging, marketing and more for you. Whether its shopper pickup or third-party delivery firms completing the last mile, youll see this trend continue to grow and evolve over the next couple of years. You can select a concept that offers a cuisine not currently available in your area or one that focuses on different hours from your brick-and-mortar location. Absolute Brands operates all of its virtual brands in Dog Haus restaurants, including others like Bad Mutha Clucka, Bad-Ass Breakfast Burritos, and Plant B. This data is the key ensuring your brand continues to deliver exactly what your customers want. Ensuring quality, taste and a good delivery or pickup experience will be pivotal for the success of virtual restaurant brands, since there is no service element to immediately offset any potential issues a customer may have (say for example a missing dipping sauce). There will be some pushback about virtual brands not being authentic among restaurant enthusiasts, but I think it is the wave of the future for customers who are hooked on delivery anyway.

DONT MISS OUT! The concept of ghost and dark kitchens has been around a couple of years, but the pandemic clearly accelerated its popularity and business model. Virtual brands offer multiple, very real benefits that are likely to see their continued growth long after the world is allowed back into restaurants: Greencat - Corporate Social Responsibility. They provide expertly crafted recipes curated for a delivery-styled menu, as well as menus and visual branding that allow you to get started much more quickly than you could if you had to develop it all yourself. Sounds like a smart and efficient way to test-market new menu ideas to new customers.

Is that good business? Labor and maintenance costs are also remarkably reduced when no guests are coming to the facility. A breakfast burrito concept to increase sales in the A.M. You decide the ingredients that work best, and we do the rest, The sense of ease that comes with a bite of a gooey grilled cheese, A hearty bowl of Mac & Cheese, fit for even the hungriest of monsters, Amazin Fried Chicken Sandwiches and Tenders, Empowering eats that break convention to always excite, Mild, Medium and Fire wings to satisfy, and tons shareable sides, 10 different flavors of wings and chicken tenders, When only the tastiest burgers will satisfy. Hooters has three virtual brands all under the name Hooties demonstrating that a restaurant with an established main brand audience might be able to do business with a different demographic through virtual means. However, humans are social and dining with friends and family isn't about to change any time soon.

- compared to a restaurant, or even a take-away outlet, a virtual brand has a minimal set up cost. I see it expanding with the logical operational separation of delivery (ghost kitchens) and in-store (restaurants). Absolute Brands offers craveable food items for those not looking to eat within a restaurant. Some traditional brands are also getting into the ghost kitchen game, like Artic Circle and Legal Sea Foods.

Real innovation seems stifled across all industries; part of me thinks this is an excuse to just throw things out there and see what sticks. The Meltdown follows Applebees prior success with virtual brand The Burger Den. Not only does it extend their brand reach, but it also offers a new personal connection with customers. Who cares more, the employee of the restaurant making a Big Mac or the employee of the ghost kitchen making a Big Mac? GrubHub and DoorDash are also popular. More and more people are ordering takeout than ever before. What is the most valuable benefit of a virtual brand? Nonetheless, virtual brands existed before the virus threatened the world and are projected to continue growing. Applebees parent company Dine Brands tested a different digital wing brand Neighborhood Wings before launching the Cheetos-inspired line.

They are extremely low risk and potentially high reward. Our team identifies top food trends in each market, from Paleo and Keto, to Comfort Foods. Each Nextbite virtual restaurant brand is backed by data and carefully crafted to dish out what customers crave. With no need for a walk-in facility, there's no need for forefront personnel. DISCUSSION QUESTIONS: Do virtual brands represent a good way for restaurants to appeal to customer bases they wouldnt normally do business with? - because virtual brands can be run not only from an existing kitchen, but also from a dark kitchen, you dont have to be an established restaurant business to launch a virtual brand. While virtual restaurants typically operate from existing brick-and-mortar restaurants, ghost kitchens dont have a customer-facing physical storefront and are instead kitchen space focused solely on preparing to-go meals.

You simply handle cooking the food and fulfilling the orders with your existing kitchen and staff. Simplify your operations with robust point-of-sale (POS) and tech integrations. Each Nextbite Fulfillment Partner is given a protected territory based on tireless analysis of geographical locations. The Wing Experience boasts 50 different wing flavors. Walmart recently announced a partnership with Ghost Kitchens and has introduced the restaurant in one location in Rochester, NY, with plans to expand to at least four more U.S. states in the coming year, if not sooner.

Please read our, 9 Virtual Restaurant Brands With Staying Power, earned more than $170 million in fiscal 2021. The concept of using a ghost kitchen is not new, but they currently allow for aspiring chefs to share their food with a wider audience at a fraction of the cost.

Initially seen as a threat to conventional models, ghost kitchens have become essential during the pandemic. Get creative testing new menus, cross-utilize existing ingredients or supplement lower-demand times as you explore building your own brand. Virtual restaurant brands aren't brand new. Although the pandemic may have fast tracked the digital ordering revolution in the foodservice industry, many concepts were working to create successful virtual brands long before anyone winced at the word COVID. Consumer preference bent toward tech beginning in the early 2010s, and the pandemic accelerated far more trends than it invented, as customers looked out for their own safety and convenience. Subscribe to Restaurant Dive for top news, trends & analysis, The free newsletter covering the top industry headlines, Stefan Zaklin / Stringer / via Getty Images via Getty Images, Industry Dive to be acquired by Informa PLC, Five Guys Franchisee Partners With DailyPay to Support QSR Employees Wellbeing, Cybersource Survey: Biggest payment challenges for grocery and restaurant leaders are providin, By signing up to receive our newsletter, you agree to our, RRF refill bill fails to pass Senate in major blow to restaurant industry, 'A huge slap in the face': Milwaukee chef on losing his RRF grant, Chipotle permanently closes unionizing Maine store, ChowNow CEO: More restaurant tech industry layoffs are coming, DoorDash adds 2-step ID verification for alcohol delivery, Reef opens virtual food hall at Raleigh-Durham airport, Undermanaged Spend Categories: How GPOs Help Mitigate Your Risks, The top workforce challenges in the restaurant industry, How Sustainability Can Lower Costs For Fast Food Restaurants, 'Shrinkflation' in restaurant portions causing spike in diner complaints, Meati nets $150M investment for expansion as products hit store shelves, A Science-Based Solution to Delivering Sustainable Protein to the Plate, Kitchen United Mix opens in Dallas Kroger. The two brands are using ghost kitchens to expand reach to new cities, either through Kitchen United or other partner kitchens. And what makes it such a fascinating business model? First, lets start with their similarities. The traditional restaurant model isn't easy to pivot and there's little room to experiment. But you dont need an existing restaurant to capitalize on the advantages of starting a virtual brand. Serve gourmet items that are quick to prepare using your standard kitchen equipment. Colicchio co-founded the high-end sandwich concept in New York in 2003. Although restaurants can replace their revenue by having only delivery service, it helps alleviate some costs. Have questions about virtual restaurants? "Virtual brands are a great way to test new concepts without worrying consumers that the original chain is changing. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. If a virtual restaurant does well and reveals a key indication that a different offering or consumer is a profitable white space, that concept should eventually establish a physical location. For virtual restaurant Cayenne, Grubhub is essential to our business.. Click through the gallery to learn more about each of these virtual brands or ghost kitchen operations. Ninety-one percent of independent restaurants cited access to customer data as important, along with commission-free ordering (88%) and branded experiences (92%). Control of restaurant websites and customer data has become a legal issue. Direct online ordering channels can also help operators capture valuable consumer data, which survey respondents indicated is important to long-term planning and can help determine "changes to their business or operations or or menu they may want to make tomorrow and in the future," Green said.