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A32 FEATURE
Tuesday 22 OcTOber 2019
Online ordering boom gives rise to virtual restaurants

By ALEXANDRA OLSON food to what should go on
Associated Press the menu. Uber Eats has
NEW YORK (AP) — Frato's helped launch 4,000 such
Pizza looks like a typical virtual restaurants world-
family restaurant, with its wide, about half of them
black-and-white check- in the U.S. and Canada,
ered floor and red chairs. according to Kristen Ad-
But in the kitchen, the cooks amowski, head of Uber's
are whipping up dishes for virtual restaurants program.
four other restaurants at One restaurant owner, Rick
the same time. Scott, said Uber saved his
There is, of course, the Brooklyn business.
gourmet pizza that patrons Scott first opened a cafe
have come to expect from serving coffee, pastries
Frato's when they walk and ice cream in Crown
through the door. But there Heights, a lower-income
are also spicy chicken gy- neighborhood. But it was
ros for Halal Kitchen, bar- the only sit-in restaurant
becue chicken tenders for blocks around and "the
for Tenderlicious, salmon neighborhood just wasn't
grilled cheese for Cheesy ready for it," Scott said.
Deliciousness, and Butterfin- Sales were slumping when
ger milkshakes for Heavenly he reached out Uber,
Shakes — all of which can William Burns, left, general manager of the B.Good ghost kitchen inside Kitchen United's Chicago, which told him there was
only be ordered through Ill., location prepares food for delivery on Aug. 29, 2019. latent demand for special-
online sites Grubhub, Door- Associated Press ty burgers in the surround-
Dash and Uber Eats. innings of this industry," ing area. Scott launched
Owner Michael Kudrna Hannon said. "It's highly Gerizim Burger Factory on
launched the four spinoffs speculative at this point to Uber Eats with a Caribbe-
earlier this year in a mat- understand where this will an-inspired menu of jerk
ter of weeks as he races all go but what we know and calypso burgers.
to keep his Chicago-area is that people love to get Almost immediately, he
business ahead of a grow- their favorite restaurants said, sales jumped about
ing trend: restaurants con- delivered." 75%. A year later, he has
ceived only for delivery or There have already been two employees, rebranded
take-out. some notable failures. his physical restaurant and
Thousands of restaurants Maple, the delivery-only launched a second Burger
are experimenting with restaurant backed by ce- Factory in the borough of
these virtual spinoffs tucked lebrity chef David Chang, Queens.
inside their own kitchens. closed in New York in 2017 "It was a 90-degree turn-
Others are opening "ghost after two years. around," Scott said. "It
kitchens," where all food is A conveyor belt takes bags of food from ghost restaurants to a Pilotworks, a venture capi- changed our whole busi-
prepared to-go. room where delivery drivers pick up orders at Kitchen United's tal-backed start-up that of- ness."
Both concepts have Chicago location on Aug. 29, 2019. fered commercial kitchen But Kudrna has found he
emerged to capitalize on Associated Press space and distribution ser- can't always rely on third-
the rising popularity of or- he pays to the third-party fornia, and Chicago. It has vices for small food busi- party suggestions. Heaven-
dering in instead of dining apps, which now drive one- ambitious expansion plans nesses, abruptly closed ly Sweets, a desert concept
out. The trend also speaks to third of his sales. Restau- to open 40 more kitch- its Brooklyn commissary in suggested by Grubhub,
the growing power of third- rants pay commission fees ens in cities across the U.S. 2018, leaving nearly 200 has mostly flopped. The
party delivery companies, as high as 30% per order. through 2020, said CEO Jim vendors in the lurch with no chefs at a training program
which have transformed "The beauty is I can create Collins. warning. he runs then came up with
the way many people find concepts and if they don't DoorDash staked a claim "I had to call all of these Cheesy Deliciousness and
restaurants and raised ex- work, I can move on to try to the trend last week. The businesses and tell them Halal Kitchen, which have
pectations for speed and another one," Kudrna said. delivery company part- I didn't have a kitchen. It so far taken off.
convenience. "I will have lost weeks of nered with four restaurant was awful," said Liz Santiso, Grubhub spokeswoman
The $26.8 billion online or- work, but not large sums of chains — including The Ha- owner of Brooklyn Biscuit Katie Norris said sales rep-
dering market is the fast- money." lal Guys — to open a bright Company, who is starting resentatives suggest virtual
est-growing source of res- Chick-Fil-A, The Halal Guys red shared kitchen in Red- over after losing her whole- spinoff ideas when they
taurant sales in the United and Dog Haus are among wood City, California, of- sale business that had de- see untapped demand for
States, according to David top brands that have fering delivery or pick-up in livered to Whole Foods and a cuisine in a market, but
Portalatin, a food industry opened ghost kitchens 13 suburban Bay Area mar- Dean & Deluca. it's up to the restaurant to
adviser for the NPD group. through Kitchen United, a kets. Grubhub and Uber Eats say decide whether it makes
Digital orders, while still ac- start-up that builds kitchen The idea is for DoorDash their virtual restaurant pro- sense for them.
counting for just 5% of all commissaries for restau- Kitchens to be a one-stop grams help small businesses Virtual restaurants have the
restaurant orders, are grow- rants looking to enter new shop for restaurants look- compete in this landscape. obvious benefit of testing
ing some 20% each year. markets through delivery or ing to grow their business, Both actively reach out new concepts without tak-
Restaurant visits, mean- take-out only. said Fuad Hannon, head to restaurants with sug- ing on expensive leases or
while, remain mostly flat. Kitchen United, backed of new business verticals at gestions for online spinoffs hiring more staff, said Rick
Kudrna says the virtual by $50 million in funding DoorDash, although there based on data gleaned Carmac, dean of restau-
restaurants are a way to from Google Ventures and are no immediate plans to from customer searches — rant management at the
gain enough incremental other investors, has two lo- expand. extending their influence Institute of Culinary Educa-
revenue to offset the fees cations in Pasadena, Cali- "We are really at the early from how people get their tion in New York.q