Dark Kitchens: Not So Dark Anymore

02.09.2020
2 min read

A recent report by UBS, entitled “Is the Kitchen Dead?”, projected that the food delivery industry would be worth $365 billion by 2030 (1). In 2020, the food delivery industry is worth around $136 billion and it seems like the demand for meals being delivered right to your doorstep is growing exponentially by the year (1). Whether it is because traditional brick-and-mortar restaurants are too expensive to build and maintain, or restaurant margins are too slim to allow for rapid growth, or simply because the in-restaurant experience just isn’t fashionable any more, there are a number of reasons as to why more and more people are choosing to have food delivered to them.   

One thing is for sure, however. This new vacuum in food retailing has opened an opportunity for a new preparation alternative: the dark kitchen. Through the combination of cheaper food preparation techniques, lower labour costs, less real estate and AI-driven cooking solutions, dark kitchens could be the new way that the average customer gets their food in the 21st century. Below, we discuss what exactly dark kitchens are and then delve deeper into the various models with which food companies are experimenting.

What are Dark Kitchens?

But before we even discuss the revolutionary nature of dark kitchens, there is an important question that needs to be answered: what are they? 

Simply put, a “dark kitchen” is a setup which just includes a standard kitchen and a few motorbikes to deliver food to hungry customers. No seats, no tables, and no on-site customers.   

Due to higher commercial real estate costs around the world, dark kitchens are becoming an increasingly popular trend for both restaurants and customers – customers want to feel comfortable and eat at home while food businesses want to cut down on both labour and rent costs. And so, as a result of kitchens lowering their production costs, your next delivery could be cheaper and quicker as well as more customisable to your tastes.

Zooming Out

There has been much movement in the food industry, surrounding dark kitchens. Chick-fil-A, Door Dash, Starbucks and other major retailers have even been attracted to the idea of introducing their own dark kitchens. However, each retailer has their own take on what a dark kitchen is and how it could function.  

Model 1 – Cloud Kitchens   

The first dark kitchen model functions like a “WeWork for kitchens” in that companies acquire or lease a real estate space over a long period of time and allow other kitchens to use the space (2). The landlord would provide amenities such as dishwashers and hobs, while the smaller businesses would use the kitchen space exclusively for delivery of food and would then pay the landlord a small subscription fee for using the space. But bear in mind that the rent would be significantly less considering, the business would only be paying for kitchen space.

Example – DoorDash: Having opened their first shared commissary kitchen in Redwood City, California, DoorDash rents out larger kitchen spaces to smaller businesses who focus on delivery of food without the expenses of opening an entire new restaurant. Not only does this save costs, but customers would be able to mix and match the types of foods they order from the kitchens that operate in the same communal space.

Model 2 – Food delivery platforms building their own dark kitchens   

The second model of dark kitchens refers to those companies that are already in the food delivery business (e.g. Deliveroo) and who are actively looking to invest in kitchens that would specifically cook for them.   

Example: Rebel Foods   This Mumbai-based company operates 235 kitchens in 20 cities and deals with around 2 million orders a month (3)! As we described previously, Rebel Foods rents out many kitchens to smaller businesses who are exclusively targeting the food-delivery market, from Italian to Chinese cuisine. Not only this, but Rebel food is now looking to invest in automation of food production! It aims to expand to other countries and experiment with technology that will allow the user to completely customise their order, while including their dietary requirements, from a Rebel Foods location and it will get crafter within minutes by a machine.  

Model 3 – Virtual Restaurants   

Virtual restaurants are an idea that allows kitchens and food brands to experiment with food that is specially designed for delivery.   

Example: Reef Kitchens   Reef Kitchens uses around 5,000 parking facilities in North America to accommodate and ecosystem of experimental culinary teams and their ideas (4). Partnering with the likes of UberEats and GrubHub for delivery and former executives at Jamba Juice and Potbelly, Reef is focusing on repurposing parking lots to introduce a wide variety of their own restaurants using culinary staff and chefs to make wide range of menus that are perfectly suited to delivery.  

So far, the menus lean toward comfort food, with the combinations being a little eccentric. Wings & Things, a branch of Reef Kitchens in one of their parking lots, offers mozzarella sticks, chicken tenders, cronuts, Skittles, Red Bull, and two kinds of Greek-yogurt bowls.

Bottom Line

The future is always unpredictable, and the future of food can be even more so. Although we are certain that tastes are changing, people are less inclined to go out for food, delivery is becoming more popular, and restaurants are seeing rent increase to unreasonable numbers, perhaps change is something that is desperately needed in the food industry. But who knows, could we see a future where restaurants are made up of kitchens and motorbikes? Could we see the only seats available in a restaurant be your living room couch? Could we see food delivery come from empty parking lots? Only time will tell.