By 2019 Statista estimated that the foodservice delivery market in the UK was worth £8.5billion, with 7.5 billion food deliveries made during the year. Brits were spending an average of £5.40 per week on takeaway meals and the growth of online ordering was continuing to rise, with a forecast that there would be 11million online food delivery users in 2020.
Acceleration of service in 2020
In March 2020, a pandemic forced all non-essential outlets to close and hospitality operators were left with food and drink going to waste and no immediate prospect of income. Those who already offered click and collect or delivery continued to do so but many other businesses quickly adapted their trading model to add this income stream as an option as the landscape changed beyond recognition. As the country moved out of, and back into, lockdown takeaway and delivery became more established in the fabric of society and is likely to remain a bigger part of the dining repertoire on an ongoing basis, with Deloitte predicting that the delivery market will grow 10% a year and be worth £19bn by 2023.
Balancing kitchen space for dining in and delivery
Many restaurants are comfortable devoting up to 10% of their turnover to delivery and fulfil these in their own kitchen alongside dining in orders. But trading forecasts based on previous trading patterns are no longer relevant and business owners must balance the time and resource spent on each strand of their business. A reassessment is needed to give each income stream the attention it needs without compromising on quality and reputation, alongside reviewing if there are geographical markets to target beyond the existing reach of the restaurant.
This shift in focus has accelerated another growing trend in hospitality – the rise of the dark kitchen, established exclusively to supply meals for delivery. They provide extra kitchen capacity for hospitality operators to expand or diversify, into delivery without many of the fixed costs of a restaurant, leaving their own commercial kitchen to concentrate on core dining in business. Dark kitchens can also be known as virtual, cloud or ghost kitchens or delivery-only restaurants, with orders placed online, food prepared at a customised venue and delivered directly without the need for any additional front of house service.
Dark kitchen business models
The two main options are to operate from a warehouse accommodating multiple food preparation businesses or sourcing facilities in existing catering spaces that are under-utilised but the variations on dark kitchen models include:
The original
- one specialist brand taking a premise specifically to service deliveries ordered through an app
Takeaway
- an extension of the original dark kitchen but which also allows customers to come to site to collect their food
Multi-brand
- one business provides the kitchen for multiple brands to share, enabling them to attract customers from a wider catchment area whilst keeping costs down
Aggregator-owned
Deliveroo pioneered the development of aggregator dark kitchens and runs a series of properties through its ‘editions’ division, removing the parent brand even further from the delivery operation.
The aggregator dark kitchen provides facilities for any number of unrelated businesses to rent, instantly connect with its own app and delivery personnel
Partial
Food operators can source preparatory services from a central provider on which to build their own signature touches and flair to make the dishes their own
Considerations of setting up a dark kitchen
At its most basic, the decision of whether to set up, or operate from, a dark kitchen might come down to cost and continuity of business but there are numerous other considerations, for and against, that must be taken into account.
Cost
From a cost perspective, dark kitchens will usually minimise rental and set up expenses and will avoid the costs of waiting staff associated with a fully operational restaurant kitchen. If sharing a venue, a dark kitchen can also offer savings on common costs, like utilities and security. Operators can also avoid complex planning permissions as dark kitchens created specifically for delivery are not usually registered as a business or takeaway premise.
Standards of food preparation
Provided that standards can be maintained, a food business can generate an additional revenue stream through dark kitchen delivery without impacting on the efficiency and quality of service in the parent restaurant. However, Food Standard Agency regulations still apply, regardless of location, requiring standards of food preparation and hygiene to be adhered to and operators must be sure that they can maintain quality and brand consistency in a remote environment.
Testing interest
When a restaurant is looking to expand beyond its existing catchment area, a dark kitchen will test interest in the brand without the need for major investment but it may also be possible, and more cost effective, to work with a site that has underused or unused food preparation areas on a rolling tenancy agreement. Such an agreement could be mutually beneficial to both parties and expand delivery options from an existing commercial kitchen space rather than starting from scratch.
Using technology
Hospitality technology remains an important consideration and should give access to real-time information and user data to help determine demand, provide flexibility, and maintain speed of service. It should also be central to the purchasing of kitchen equipment, ordering ingredients and workforce management, so remains an integral part of the restaurant infrastructure. At the core of the business, operators must factor in the association with the chosen delivery app on which the menu is hosted and whether it is more beneficial to develop their own offer within an original dark kitchen or subscribe to an aggregator owned model.
Staff wellbeing
And most importantly, the health and wellbeing of staff remains a top priority and must not be compromised because they are out of sight of the primary operation and possibly even working in a different geographical area. Communication, motivation and support remains an essential tool for employees running dark kitchens.
Dark kitchens are here to stay
With hospitality devastated by the effects of the pandemic and the insecurity of frequently changing regulations, adding delivery or takeaway revenue streams has been a lifeline to many pubs and restaurants. Rules were relaxed to allow businesses to offer a takeaway service without having to go through a planning application process until March 2021. This has now been extended by another year, with consideration being given as to whether these reforms will be made permanent. With the uncertainty that remains and the need to remain agile, it’s not too late to launch a dark kitchen and not unrealistic to expect that they will become a more regular addition to the running of a responsive hospitality industry.