Opened 300 restaurants in one day – without any kitchens

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SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on December 24th, 2020.

An American Youtube star opened 300 new restaurants in one day. Without either staff or premises. The phenomenon “ghost kitchens” is expected to reshape the restaurant world – and already exists in Sweden.

“Ghost kitchens” – or “cloud kitchens” as they are also called – can simply be described as a restaurant kitchen without its own front of house. Instead, the owner relies entirely on food suppliers such as Foodora, Wolt or Uber Eats. Where the food is made does not matter, as long as it tastes good and is delivered as planned. And that is what makes “ghost kitchens” so successful, and its emergence so logical.

The first wave of home delivery, which came five or six years ago, was mainly about getting well-known restaurants and restaurateurs to join the food apps. Then it was all about trying to drive people’s behavior towards starting to use these services.

In the second wave, customers had begun to become loyal users, and could search directly in the apps for the type of food they wanted. In some cases, the search results became more important than the original brands.

This week we saw the beginning of the breakthrough for the third wave when MrBeast – a 22-year-old Youtuber from North Carolina with nearly 50 million subscribers – opened 300 hamburger restaurants across the United States. In a single day. Without either restaurant staff or kitchens.

The food is made by various chefs around the United States, whom MrBeast has probably never even met. He then uses the food delivery services to get the food delivered, but keeps the customer relationships in his own channels. And that’s the main reason for the immediate success, as the new app MrBeast Burger went up as number one on the US App Store. He handles the marketing all by himself via his Youtube channel to his fans for no money at all.

However, MrBeast has not been quite as innovative as it sounds. He himself is just one of many celebrities that Virtual Dining Concepts – the company behind MrBeast Burger – works with. For example, you can also buy chicken from the rapper Tyga or cookies from Mariah Carey.

The difficulty with this model is maintaining quality. Many restaurant chains has as a concept that the food should taste the same no matter where you eat. That is difficult to achieve if the kitchens work with different ingredients and ways of cooking it.

That an individual restaurateur can be attracted by the concept is not surprising. Becoming a franchisee with one of the big chains is often expensive. Building your own chain of physical restaurants around the country is even more expensive. Avoiding these costs, and being able to be a so-called virtual kitchen for several different brands, can therefore be appealing. Because if you still do not have a front of house – why limit yourself to one kitchen, or one brand?

For the consumer, on the other hand, it becomes unclear who actually cooked one’s food and where it comes from. On the other hand, how many people today know where the food at their favorite restaurant comes from?

The phenomenon “ghost kitchens” also exists in Sweden. For example, if you have ordered food from Singapore Spice in Stockholm, you may be surprised to hear that it does not exist as a restaurant. It’s just a brand used for Asian food. The same kitchen on Östermalm also makes Italian food under the Nonna Donna brand. Maybe you have ordered from both without noticing anything. That is the whole point.

It is easy to see in front of you how Swedish influencers pick up on this trend and drive the big breakthrough. Swedish consumers are now used to ordering food and having it delivered to their homes. The question is more about what to eat than from whom. And it is basically the same question (“What should I shop?”) that has created a completely new professional category as an influencer on Instagram and Snap. It is therefore not entirely unbelievable that we will soon see people like Bianca Ingrosso, Kenza Zouiten and Therése Lindgren make their entrance into the Swedish restaurant world.

You click, Foodora delivers, and Bianca Ingrosso is suddenly also a restaurateur for the next generation. It will be difficult for an average restaurant to compete with her 1.2 million followers on Instagram – and with her credibility in the target group.

This analysis was first published in SvD Näringsliv, in Swedish, on December 24th, 2020.

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