Ghost kitchens, also known as delivery-only kitchens, are commercial cooking facilities set up specifically to produce food for delivery or take-out, rather than for dining on their premises. They have no storefront and operate exclusively for online delivery orders. Ghost kitchens allow restaurants to expand their delivery areas and menu options without needing to have additional physical restaurant spaces. Ghost kitchens provide affordable commercial kitchen facilities on a rental basis allowing independent operators and restaurants to scale back-end operations. Some key advantages of ghost kitchens include lower overhead and real estate costs compared to traditional restaurants, flexibility to cater to multiple brands from a single location, and ability to quickly expand operations in new markets.
The global Ghost Kitchen Market is estimated to be valued at US$ 70.37 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030 , as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Increased adoption of online food delivery services is a major driver influencing growth of the ghost kitchen market. Changing consumer preferences towards convenience and availability of food delivery at their doorstep has boosted demand for online food ordering platforms. According to statistics, the online food delivery market is expected to reach US$150 Bn by 2025, thus driving increased reliance of restaurants on delivery and take-out models. This has spurred growth of ghost kitchen facilities across major cities globally. Furthermore, ghost kitchens provide affordable commercial infrastructure allowing emerging food brands and restaurants to expand operations with lower capital expenditure. This has encouraged several new market players including independent chefs to leverage ghost kitchens infrastructure for scaling delivery-focused food businesses.
SWOT Analysis
Strength: Ghost kitchens help restaurants scale rapidly and operate more efficiently through reduced costs. They allow restaurants to expand into new markets and reach more customers without incurring the high upfront costs of building traditional brick-and-mortar locations. Ghost kitchens also provide restaurants flexibility to experiment with new concepts and menus.
Weakness: Restaurants relying solely on ghost kitchens may lack the ambiance and experience of dining in a traditional restaurant space which can impact customer loyalty and retention over time. There are also challenges around delivery handling and logistics coordination that comes with the territory of being delivery or take-out only operations.
Opportunity: The growing popularity of food delivery apps and preferences for convenient dining options present a large opportunity for ghost kitchen operators to target time-starved consumers. Expansion of delivery areas into suburban and rural regions also allows tapping new customer segments. Partnerships between ghost kitchens and delivery platforms can help reduce customer acquisition costs.
Threats: Fragmented nature of the ghost kitchen market means intense competition from existing as well as new market entrants. Dependence on third party delivery platforms also leaves ghost kitchen businesses vulnerable to commission fee increases and loss of visibility on those channels. Changes in consumer trends away from delivery could negatively impact the overall demand for ghost kitchen offerings.
Key playersoperating in the ghost kitchen market are CloudKitchens, Kitchen United, REEF Technology, Virtual Kitchen Co., Zuul Kitchens, Deliveroo Editions, Kitopi, DoorDash Kitchens, Grubhub/Seamless, Swiggy Access, Uber Eats Kitchens, Rebel Foods, Ghost Kitchen Brands, JustKitchen, and Keatz. These players have been focusing on expanding their presence through new virtual kitchen launches and partnerships with restaurant brands.
Key Takeaways
The global Ghost Kitchen Market is expected to witness high growth over the forecast period driven by growing preferences for convenient take-out and delivery options. Regional analysis comprises - The Asia Pacific region dominates the global ghost kitchen market currently due to high smartphone and internet penetration facilitating the growth of food delivery apps. Countries like India and China have seen proliferation of local ghost kitchen brands targeting urban young professionals and nuclear families.
