Ghost kitchens and virtual F&B brands were meant to usher guests away from on-site restaurants, but with major players announcing plans for guest-facing physical locations, could the trend be waning?

Since its emergence through the 2010s, the ghost kitchen has been heralded as a major catalyst for change in terms of on-site, brick-and-mortar dining. Taking the sit-in format and flipping it on its head for a model formed solely around food preparation and delivery, its proliferation was a sign of times characterized by new technologies and third-party platforms whose missions orbit comfortable ease of use and frictionless convenience.  

Driven by increasing demand for delivery and at home options – as well as the ‘dark’ model’s low-overhead, small-footprint nature – the trend’s intersection with COVID-19 all but forced the restaurant industry to adopt this strategy as a means to both remain in operation and recoup substantial losses. According to data from Euromonitor, this section of the market alone is now on track to become an estimated trillion-dollar industry by 2030.   

And so it came as something of a surprise that C3, one of the major players in this largely virtual space, has performed a reversal of sorts with the announcement of its Citizens concept; a series of large-scale, guest-facing and unashamedly experiential food halls that will function more akin to the conventional in-person dining model than the digital attempts the brand has created to disrupt it. 

'With Citizens, we aim to bring fresh energy, variety and employment opportunities to these culinary spaces at a time when diners are beginning to look forward to immersive, in-person dining experiences again,' says C3 founder Sam Nazarian. But is this an organic adaptation as pandemic restrictions fall away, or a more telling sign that the trend has reached its high watermark, and is now set to recede?

Citizens will offer a series of large-scale, guest-facing and unashamedly experiential food halls.

Local vs global

The move to launch a series of physical locations follows a recent partnership between C3 and Graduate Hotels to develop the campus chain’s Graduate Food Hall. But whilst the term ‘food hall’ may invoke the wide variety of choice guests have come to value, behind the curtain lies a different prospect; several virtual C3-owned brands operating out of a single kitchen, with one team preparing multiple cuisines from tacos to fried chicken and sushi. Within this tension lies one of the major obstacles ghost kitchens have faced, namely the question of scaling. 

If a restaurant like Wendy’s or one of the many independent venues who have opted for ghost spaces wish to prepare and deliver its own menu via this format, it is reasonably simple to apply the model to a larger scope. For the international tech companies who increasingly drive this trend however – and who have thus far served largely as delivery platforms and providers of space as opposed to the kitchens and cooks they facilitate – it becomes a different proposition entirely. In this instance, the issue of authenticity comes sharply into focus, and so too the diluting of culture, cuisine and communities.

It is no mistake that the suburban-inclined Local Kitchens – a new digital food hall concept from former DoorDash executives – is named as such, and as opposed to operating its own virtual brands instead brings together local restaurants under one physical roof guests can visit and experience. While this will still see standardized recipes prepared by a single team, these venues and their designs will intend to give some character and familiar presence to the so-called dark space. 'The vision is that there’s one of these you can stop by on the way home from school or work,' says CEO Jon Goldsmith. 'It’s a hyperlocal approach versus putting a warehouse in the middle of nowhere that has a low real estate cost.'

The Citizens in NY’s Manhattan West, near Hudsons Yard, has a food hall, two restaurants and various bars.

Hall of fame 

With pandemic measures easing, it is unlikely that ghost restaurants will come to replace their physical counterparts entirely. These are, after all, completely different experiences and offers, and some of the ground ceded during 18 months of pure delivery will naturally be won back once the choice between the two formats is available. What seems clear, however, is that, if ghost kitchens are to be scalable to the degree tech platforms like Deliveroo, Zulu and Cloud Kitchens envision, the food element of the virtual food-hall model cannot play second fiddle to the tech that empowers it. 

As such, those who invested heavily in this sector will soon be faced with a decision. One option will encompass the development of multiple in-house virtual brands in the hopes that guests will neither care nor notice the lack of authentic choice – perhaps leveraging experiential design and in-person event programming to paper over this absence. The other is to partner with local venues, and to bring these individual partners under the purview of a single coherent branded aesthetic, though some may resist this stripping away of elements that make them unique, and so too the cut the owners of the halls will take. In short, the next step for ghost kitchens will be determined by what proves most popular (and profitable) between the localization of virtual delivery kitchens or the wider distribution of local restaurants. 

In the meantime, the news that US burger chain Wendy’s will make its UK return after 20 years with 400 dark kitchens is a clear commercial signal that the QSR sector is leaning in, even if more experiential and independent parts of the market are hesitant. 'We are creatures of habit and we like convenience and I think that will be at the heart of what people are looking for,' Abigail Pringle, Wendy’s chief development officer, tells the Financial Times. 'Delivery is here to stay and what better way to capture that than through a delivery kitchen.'

Cover image: Located in Orlando, Florida Dollins Food Hall is a virtual food hall with over 20 restaurants.