- Inspire Brands launched a Ghost Kitchen in Atlanta on Tuesday, which features five of its fast-food brands.
- Alliance Kitchens will allow customers to order from both third-party aggregator platforms and brands’ apps. It’s already working after a quiet rollout in July.
- As consumers seek speed and seamless ordering on digital platforms, more restaurants are opening physical ghost kitchens or launching virtual brands to drive sales.
- Venture capital investors continue to pile up in the space, with $3 billion to be invested in more than 50 deals in 2020.
As labor challenges continue in the fast-food space and customers seek seamless interactions with digital ordering, major restaurant players are leaning into the ghost and virtual kitchen space to optimize efficiency and speed up service.
Inspire Brands on Tuesday announced the launch of a multibrand Ghost Kitchen in Atlanta that will serve customers from a portfolio of fast-food companies including Arby’s, Buffalo Wild Wings, Jimmy Johns, Sonic Drive-In and Rusty Tacos.
The concept, named Alliance Kitchen, will allow customers to order from both third-party aggregator platforms and brands’ apps. Stephanie Sentel, senior vice president of restaurant operations and innovation at Inspire, said in an interview that Inspire’s digital sales have more than doubled to more than $3 billion since its launch in 2019.
Privately held Inspire did not disclose the size of its investment.
Alliance Kitchens is already in the works, opening its doors in July in a quiet rollout. The company said this is its first restaurant owned and developed by Ghost Kitchen, and it allows Inspire to test ideas from its innovation center — such as its Flippy robot, which can be used to cook wings. Is – in a real restaurant environment. Sentel said the concept could eventually allow the Inspire to introduce the brand to new geographies.
It’s already helping the Inspire find new ways to work more efficiently.
“We have a lot of experience and resources within Inspire and took a look at how we can operate this facility by driving more labor efficiencies – unlocking a lot of innovation in that process,” Sentel said. “We’ve established a model where the entire kitchen is involved—we essentially have a shared workflow work process, driving a lot of that labor efficiency.”
Alliance Kitchens uses segmented workstations that allow it to fill orders for multiple brands. Inspire said this results in both labor efficiency and the ability for workers to train in the kitchen. According to the Inspire, the design reduces labor needs by 54%, reduces square footage needs by 19%, reduces equipment costs by 45%, and reduces energy consumption by more than 50%, according to the Inspire. According.
“Through that testing and learning environment, we are already seeing very positive progress in that area enabling us to deploy some of that technology and innovation in our Sonic restaurant drive-thru, as well as Jimmy John’s. Inspiring to be.” Van Nelson, Inspire’s vice president of restaurant operations, innovation and profitability.
The innovation is also being tested outside the enterprise’s kitchen. The facility has a lounge on third-party apps for drivers where they can pick up food from the locker, use free Wi-Fi, charge their phones, and get complimentary Dunkin’ Coffee.
Venture capital firms are piling on the virtual or ghost kitchen space. According to data from Pitchbook, around $3 billion was invested in this category globally last year. Pitchbook said the investment dollars were spread across more than 50 deals, with top bets on Travis Kalanick’s CloudKitchen, All Day Kitchen and Kitchen United.
Restaurant companies are also placing bets in this space as digital orders continue to grow.
Take Wendy. The chain saw its digital sales increase by more than 10% in the last quarter. In August, it announced an agreement with start-up Reef Technology to open 700 ghost kitchens by 2025 in the US, UK and Canada. Still in the pilot phase, the companies expect to open about 50 kitchens this year.
“We’ve come up with Wendy’s, which has the potential to really penetrate urban areas and city centers,” said Philippe Saint-Just, Reef co-founder. “Traditionally, companies like Wendy’s have been constrained by the high cost of real estate, and we provide a physical platform that drives down costs and barriers to being able to do so. This is Wendy’s complements existing networks and allows them to grow in new geographies and new markets.”
Saint-Just said that following an initial launch with Wendy’s in Toronto earlier this year, it became clear within the first two weeks that the kitchens were selling more products and had lower operating costs than traditional restaurants. .
Pre-pandemic, SoftBank-backed Reef had 50 kitchens, and today it has more than 300 locations, Saint-Just said. That equates to a total of 1,000 franchise locations, he added.
And while restaurant companies like Inspire and Wendy’s are opening up physical kitchens, others have launched virtual brands that operate from their existing kitchens, including Denny’s Burger Den and Chillies It’s Just Wings. Concepts boost sales while leaning in places that have already been built and paid for.