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The term ‘dark kitchen’ may not be one that many of us are familiar with just yet in the UK. This new phenomenon of the takeaway industry is on the rise, satisfying public demand for fast-food delivery with fewer business overheads. With a couple of quick taps in an app, your list of food choices appears like a digital cornucopia.
You’ve seen the ads for the food delivery apps, with the more popular ones being Just Eat, Uber Eats and Deliveroo. Even before the COVID-19 pandemic of 2020, fast-food delivery made up 8% of the UK’s food service sector.
Statistics report that there are estimated to be 750 dark kitchens in the UK at present and more are being set up every day. But what exactly is a dark kitchen? And why are they becoming so popular?
What is a dark kitchen?
Dark kitchens (also known as cloud, ghost kitchens, virtual kitchens and shadow kitchens) are not just your average cooking space with the lights turned off. Rather, they are places where food is prepared at a premises to be delivered to consumers. The premises are not open to the public, with orders coming in from websites and apps. This is why they are considered ‘dark’ – because they operate out of sight of customers, using technology to connect with their customers.
Dark kitchens come in many different forms and it’s not unusual for more than one restaurant to occupy the same dark kitchen space.
Regardless of who is doing the operating, dark kitchens all follow the same premise:
- Food orders come in from an app or online.
- Food is prepared in the dark kitchen.
- Packaged food is delivered by delivery drivers to customers.
Dark kitchens are often on the outskirts of towns and cities in industrial estates and warehouses. The biggest site for dark kitchens is in the Park Royal industrial estate which has become known as “London’s Kitchen”. This area claims to make one-third of the capital’s delivered meals.
What is the dark kitchen business model?
There are several different types of dark kitchen business models that all follow the same ideal outlined above: someone places a food order, it’s prepared in the dark kitchen, and it is delivered to the customer. However, there are some slight differences between the different dark kitchen business models.
Traditional dark kitchens
This business model is the “standard” dark kitchen model in the industry. However, the model hasn’t really been around long enough to earn that “traditional” title.
In this business model, one brand of food rents a kitchen with no dining space or ordering space for its customers. The brand has sole use of its kitchen space and so it is an ideal choice for a food business that focuses on a single type of cuisine. The traditional dark kitchen business model also optimises its operation for online orders, often relying on third-party apps such as Deliveroo to handle its orders.
The traditional dark kitchen works for food businesses that focus on one cuisine type that knows that their food will be popular amongst its customers. The reason for this is that it does not offer much scope for trying out new ideas.
Shared dark kitchens
In the shared dark kitchen business model, multiple food brands use the same space, often operating under a parent company. Each brand offers its own unique cuisine but shares the equipment, resources and kitchen space with other brands. This business model helps to maximise kitchen efficiency and reduces operational costs.
This business model’s success works only if the meal choices prove popular with consumers and the demand for each cuisine is there. However, a shared dark kitchen can capture a bigger market share and the business also has increased flexibility, being able to adapt quickly to business demands.
If you spot that the locals in the area are looking for fried chicken and can’t find it, the shared kitchen could start up a fried chicken brand for relatively little cost.
Takeaway dark kitchen
This type of dark kitchen isn’t quite as dark as other business models. This dark kitchen accepts online orders from apps and websites, but it also allows customers to collect their food orders from the premises themselves.
For many businesses, this hybrid model allows them to create connections with their customers and this interaction often brings in future orders or greater trust in the brand. However, the downside of this dark kitchen business model is that it requires a larger space and larger investment given that part of the business is customer-facing.
Aggregator-owned dark kitchens
In the past, food delivery aggregators such as Deliveroo and Uber Eats would simply facilitate the delivery of fast food from kitchens to customers. However, more recently, these aggregators are getting on board with dark kitchens, offering cooking space and kitchen equipment for food businesses to rent.
Aggregator-owned dark kitchens benefit the food business because the brands can tap into the aggregator’s online set-up, menu platforms and fleet of delivery drivers without having to set up their own dark kitchen. This means that the brand can maintain focus on what it does best – cooking food! And the kitchen owner deals with everything else.
One example of the aggregator-owned dark kitchen business model is Deliveroo Editions. Deliveroo Editions has 16 “hubs” where it leases units to popular food brands including Shake Shack and Dishoom.
Aggregator-owned dark kitchen plus
Similar to the above, the aggregator-owned dark kitchen plus business model offers a little bit more. It may have a storefront and optimised cooking processes as well as greater infrastructure. For example, the delivery aggregator could take care of every aspect of the food business except for the menu and the cooking.
Outsourced dark kitchens
This is the latest of all the dark kitchen business models. Why do a job when you can get someone else to do it for you? This model allows a food business to outsource nearly all of its processes and it simply puts the finishing touches on itself.
In this model, the food business works with other businesses that specialise in order processing, food prep and delivery. The brand only gets itself involved in the customer-facing parts of the job, simply differentiating the finished product to ensure it is unique to its market.
How does a dark kitchen work?
It’s a Friday night, you’ve had a long week at work and there’s nothing in the fridge. Reaching in your pocket for your mobile, you browse Deliveroo for some food and it’s there within half an hour or so, depending on where you live. But just how does it work when it comes to the dark kitchen preparing and then delivering your food?
It’s relatively simple. When you place an order via a food delivery app, the restaurant you’ve chosen from the platform receives the instructions of what you’ve ordered and your address. The chefs then prepare your food, updating the app as needed, before your food is packaged and handed to a delivery driver or rider. The delivery driver then delivers the food to your door. It’s a simple, slick operation that works well almost everywhere, but perhaps not if you live in a rural farm location in the Highlands of Scotland, however.
There is not really much more to it than that and most dark kitchens operate in a similar way, depending on their business model, as outlined above.
Who is a dark kitchen suitable for?
The COVID-19 pandemic helped thrust even your more traditional restaurants into the dark side. Overnight, family-run restaurants, large chain restaurants and traditional takeaways became dark kitchens. They took orders online or over the phone and began preparing their meals without their usual customers over the other side of the serving hatch.
For this reason, many restaurants realised that dark kitchens are the way forward when it comes to reducing costs and succeeding in business when times are increasingly hard with the surge in energy bills and food prices. This is one of the reasons that dark kitchens are on the increase.
For a business that is struggling to survive, dark kitchens certainly offer the flexibility of keeping going and lowering costs. But, at what other costs?
If a food business works largely on customer interaction, word-of-mouth recommendations and passing trade, then switching to a dark kitchen business model certainly would not be suitable. But, on the other hand, for businesses that are struggling to get the passing trade that they’re used to, switching to a dark kitchen may offer them plentiful rewards.
What are the benefits of a dark kitchen?
Dark kitchens are on the rise. And it’s of no surprise when you consider their benefits. Typically, dark kitchens have much lower start-up costs than traditional restaurants. The operating costs are also lower. This is because dark kitchens take up much less rent space than a restaurant that serves customers would. Furthermore, they can be located in a space where rent costs are much lower.
Dark kitchens do not need to have a central presence in a town or city to gain custom and footfall. They can be located in suburban areas with good transport links for their delivery drivers where rents are typically much lower, and access is often much easier.
What is more, dark kitchens can be increasingly flexible in comparison to traditional restaurants. They can target multiple markets from their premises and follow the data and the food trends. Shakes becoming popular? They can branch out easily! What’s more, they can combine with other restaurants and brands within the same kitchen to meet customer needs simultaneously.
Dark kitchens also need less staff. With no need for front-of-house staff or many waiting staff, dark kitchens can keep it to the bare minimum and cut costs this way too.
What are the negatives of a dark kitchen?
There is a dark side to dark kitchens. Because they’re not customer-facing, many have been branded as “windowless boxes” or “sheds” with the chefs “cooped up like battery hens”.
One industrial unit located in Battersea, south London, resembles its neighbouring warehouses. However, inside there are eight small kitchens, seven of which do not have a window. Each kitchen is about the size of your average garage yet has between five and seven chefs all cooking away, dishing out around a thousand orders a night.
According to The Jellied Eel, Deliveroo has around 74 kitchens based in containers in 12 locations across London, with the platform providing the equipment and the space. The food brands themselves simply source the ingredients and the chefs. This aggregator-owned model isn’t inherently bad, but many report that chefs cooking in dark, windowless boxes is somewhat Dickensian.
The lack of social interaction that chefs often have with colleagues and customers can be a little worrisome too. The same goes for the lone-working delivery drivers, which poses different health, safety and welfare challenges.
Many chefs have suggested that there isn’t actually any harm in cooking like this and that the units are often better equipped than traditional restaurant kitchens. The issue, here, is simply one of transparency. Do restaurant customers know that their food is being prepared here in this way? Just how transparent is it?
Aside from the lack of transparency, another downside is that restaurants may lose some control over their brand and their customer experience in using some dark kitchen business models. Deliveroo and other companies rely on self-employed deliverers. Of course, the majority of deliverers comply and enjoy the flexibility of self-employment. But there will be some who see the lack of obligation to a particular company as a negative, with their casual labour being seen as of minimal importance. Working conditions could be seen as “take it or leave it”.
For those of us concerned with ethics, it isn’t just a case of stopping using dark kitchens. The important aspect is doing your research and using brands that you trust and whose sustainability and ethical practices align with your values. If you believe that ethical business models and sustainability are more important than food choice and convenience, dark kitchens may fall a bit short of your expectations.
The takeaway (pun intended!) from all of this is that, like them or loathe them, dark kitchens are here to stay. Technology continues to develop to support the food industry and restaurants have adapted accordingly.
It remains to be seen how businesses can use the dark kitchen model not only to improve their food delivery systems but also to help feed the planet in a sustainable way.