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During the COVID-19 pandemic, ghost kitchens are the ideal foodservice solution at the time. Although they existed before 2020, they thrived due to the opportunities presented by restaurant closures and a takeout renaissance. But four years later, the virtual restaurant industry has struggled to find a permanent footing—from Reef Kitchen’s legal and licensing woes, to the rapid rise and fall (and sale) of Nextbite, to the lawsuits surrounding MrBeast Burger and Virtual Dining Concepts.
In the latest virtual restaurant industry news, SBE and C3 founder/CEO Sam Nazarian announced the acquisition of Kitchen United, just months after the ghost kitchen commissary operator quietly closed its Kroger locations All Kitchen United MIX stores. Coupled with the acquisition of Nextbite last June, Nazarian created an omnichannel “super group” company called “Everybody Eats” and essentially narrowed its competitors to just one: Virtual Dining Concepts, the parent company of MrBeast Burger.
While Nazarian’s acquisition contributed to the shrinking of the ghost kitchen industry, virtual dining has long had its share of changes and challenges. Nazarian said he sees Everybody Eats as a brand platform with multiple levers — in fact, the least profitable of them is delivery:
“We were involved in the ghost kitchen craze in 2020 and 2021, but we are not a ghost kitchen company and never have been,” he told Nation’s Restaurant News. “I think fundamentally if you’re a delivery-only business, it’s not a profitable business… We are a solution, through brand, IP and food, through different platform to connect with new audiences.”
In addition to delivery, these platforms include food courts, digital brand partnerships with established restaurants like TGI Fridays (which added C3’s Crispy Rice Sushi to its in-house menu), and in airports, stadiums, hotels and even cruise ships. Expansion of non-traditional venues.
“If you can get new customers to try new cuisine, that’s a powerful thing,” Nazarian said. “The way to differentiate is to be able to find the best collaborators that customers can connect with and scale. [the brands] In every way… For a brand to be relevant, it must find great partners to expand its reach. “
So, how will Everybody Eats’ three distinct, digital-first restaurant platforms work together? Nazarian said acquisitions are made possible by recognizing the strengths of each platform. C3 (whose original brands include Krispy Rice and Umami Burger) is a culinary-focused engine that’s more of a full-service brand than just a menu with clever delivery packaging. Nextbite’s strength lies in digital technology, with a focus on casual dining partnerships such as IHOP, he said. Kitchen United, meanwhile, is known for its expansion through the grocery and convenience store pipeline.
Of course, this multi-pronged approach to virtual dining is not new, nor is it unique to Everybody Eats. A year and a half ago, NRN reported on the rise of “visible ghost kitchens” like Oomi, which operate virtual canteens and foodservice experiences that actually encourage customers to come in, rather than operating out of “ghost warehouses.” This has been the writing on the wall for virtual restaurant companies for some time: go all-in or bust.
“This is about getting people back into restaurants, not just opening up more delivery pipelines,” Nazarian said.
Nazarian said there are lessons to be learned from failed or troubled ghost kitchen companies, noting that focusing too much on software and digital influence, or basing a brand’s success on celebrity collaborations rather than the quality of the food, can lead to them suffering. Come bad luck. An aspiring forwarding business.
Now, with the merger of three former competitors, the newly formed Everybody Eats is one of two remaining major players in the once crowded virtual brand space. Virtual Dining Concepts recently made its own announcement, acquiring social media-famous Man Vs. fries. Much of VDC’s concept stems from the popularity of social media enthusiasts among Millennials and Generation Z, especially the company’s most popular brand, MrBeast Burger. Robbie Earl, president and co-founder of VDC, emphasized that the company differentiates itself by “staying ahead of the curve and staying relevant,” but also recognizes that omnichannel flexibility is the future of the industry:
“We have reorganized our business model to focus on what we call omnichannel virtual brands,” Earle said. “Some places where brands can survive in omnichannel include on menus, on core brand digital menus, in virtual aisles and on pickup… There will continue to be consolidation in this space and we will continue to look for opportunities to have success stories. If something If it’s good for restaurants, we’ll be interested. We’ll take advantage of that and expand it across the largest virtual restaurant network in the world.”
Contact Joanna: [email protected]rice
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