Delivery is BOOMING
Michael Schaefer, global lead for food and beverage at market research firm Euromonitor International, says global delivery sales more than doubled from 2014 to 2019, with big investors already plowing money into ghost kitchens before the pandemic.
At the end of 2019, CloudKitchens, a start-up from Uber's former chief executive Travis Kalanick, raised $400 million from Saudi Arabia's Public Investment Fund to buy cheap real estate and build shared kitchens for restaurants to rent in the United States, China, India and the United Kingdom.
Schaefer says there are about 7,500 ghost kitchens in China producing for delivery only, 3,500 in India, 1,500 in the United States and 750 in the U.K. He says ghost kitchens could create a $1 trillion global market by 2030.
Even as bricks-and-mortar restaurants have struggled with limitations on indoor dining during the pandemic, ghost kitchen ventures have thrived.
Ghost Kitchen 'Zuul' chief executive Corey Manicone says the pandemic has accelerated ghost kitchens and the widespread adoption of food delivery by three to five years.
“It’s accelerating what we thought was inevitable: a very delivery-focused industry.”
Manicone says a benefit of ghost kitchens is that they lower the financial barrier to entry for new operators. The flip side is that new or unqualified operators may experience higher rates of failure in an industry that already has extremely steep rates of closure.
Matt Newberg, founder of Hngry.tv, a new media start-up covering the intersection of food and technology, says the rise of off-site digital concepts with limited overhead is an existential threat to casual-dining restaurants and independent mom-and-pop shops. He predicts there will be only two types of dining experiences in the future: those in the special-occasion “experiential” bucket and those in the convenience bucket, a category that will be dominated by delivery.