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Ghost kitchens - statistics & facts

Ghost kitchens are restaurants that sell food through delivery only, and do not have a physical dining space for customers, nor do they offer pick-up services. They are also known as dark kitchens, cloud kitchens, and virtual restaurants, with customers able to place orders through food delivery apps, websites, or over the phone. The global market size of ghost kitchens was valued at over 40 billion U.S. dollars in 2019 and is expected to grow in the future. This market has been enabled by the rise of technology and mobile food delivery apps, especially during the coronavirus (COVID-19) pandemic when most restaurants were forced to stop indoor dining and rely solely on takeaway and delivery sales.

The global rise of ghost kitchens

Since ghost kitchens do not have a physical dining space, many partner with mobile food delivery apps, such as Deliveroo, Grubhub, or Uber Eats, to sell their menu items. The ghost kitchen company with the most funding in Europe as of 2020 was Karma Kitchen, which raised over 300 million euros in a single round of funding. The company’s business model focuses on providing work spaces for those who want to open a ghost kitchen.

In the United Kingdom, Deliveroo, which is owned by parent company Roo Foods Limited, was the third most used online provider of food delivery in 2020. Deliveroo began working with ghost kitchens in 2017 with the launch of their Deliveroo Editions program, allowing virtual restaurants to launch without the risk and start-up cost involved in opening a physical dining space.

Meanwhile, Travis Kalanick, the co-founder of Uber Eats, which claims over 25 percent of the market share of food delivery companies in the U.S., has also joined the ghost kitchen market. Kalanick established a startup called CloudKitchens in 2018, which, as its name suggests, focuses solely on the ghost, or cloud, kitchen market. However, while the U.S. and the UK are both growing markets for ghost kitchens, the country with the highest number of ghost kitchens as of July 2020 was China, with more than 7,500.

Impact of COVID-19 on the ghost kitchen market

At the beginning of the coronavirus pandemic, there was a 100 percent decrease in seated restaurant diners worldwide. Many restaurants turned to online food delivery to stay afloat. Fortunately, prior to COVID-19, the market was already moving increasingly online, and the online food delivery market reached over 100 billion U.S. dollars in 2019. The growth in the ghost kitchen market has been made possible by the increase in customers ordering food via takeout or delivery as opposed to dining in person. This could be seen especially during the COVID-19 pandemic, when social distancing measures left many restaurants unable to serve food to customers directly from their locations. By 2030, ghost kitchens are predicted to hold a 50 percent share of the drive-thru and takeaway foodservice markets, respectively.

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