Ghost kitchens have been around for several years, but the pandemic helped to spur the explosive growth of ghost kitchens worldwide. Restaurants that were forced to shut down started to transition to delivery models. But rather than do the cooking in their restaurant’s kitchens, they began to prepare food available for delivery in other facilities, which we have come to know as ghost kitchens.

By not operating at full capacity yet continuing to pay rent, restaurant owners were losing money fast. But restaurant owners did not abandon their businesses entirely. While they could not provide an in-house experience at the time, they could certainly still offer their menu through a delivery service. Ghost kitchens allowed business owners to shut down their restaurants indefinitely since most of the space was dedicated to an unusable dining area anyway, or expand their geographic areas with lower costs than opening up a traditional restaurant.

The rise of ghost kitchens

The determination to offer their menus via delivery was not merely a means to survive. The confidence to provide a delivery menu came from the unprecedented demand by the consumers. At the height of the pandemic, people were forced to stay at home to either quarantine or practice social distancing. Citizens were only allowed out for “essential” activities, which included buying food or attending to medical needs.

But rather than buy groceries and ingredients to make homemade meals, people began to demand more food options that could be delivered. With the demand came the rise of food delivery apps and more food operators transitioning to food that was available for pick-up or delivery.

Restaurants that were forced to close began to survive entirely on delivery-based customers. Their ghost kitchens were not only able to meet the demand but also helped increase profits by lowering overhead costs. Some businesses had even reported that they earn more now than when they had a brick-and-mortar location that catered to dine-in guests.

However, ghost kitchens didn’t only surge because existing restaurants closed. Many people across all industries lost their jobs during the pandemic. Some made dramatic transitions in their career paths to enter the food service industry, leveraging ghost kitchens as the dedicated facility where they could safely and efficiently prep and cook food available for delivery.

Because of the success that ghost kitchens have brought to many food operators, it’s not unlikely that business owners will abandon them anytime soon. Experts believe that more ghost kitchens will operate around the world. Even before the pandemic, ghost kitchens already accounted for 10-15% of the $66 billion U.S. restaurant sector. That number was expected to rise to 21% by 2025. According to Researchandmarkets.com, the global ghost kitchen industry is predicted to increase by over 12% and will be worth about $139 billion by 2028.

In conclusion, we predict that ghost kitchens will continue to grow, but we expect to see consolidation. We do believe the success of a ghost kitchen will be determined by the diversity of concepts they can offer as long as the quality of the offerings are in-line with traditional restaurant offerings. For more information on ghost kitchens, or any type of retail spaces please reach out to info@cbicommercial.com.