Virtual kitchens, brands trending as off-premises dining surges
When DoorDash, a meal delivery business, opened its first ghost kitchen in Redwood City, California, in late 2019, it created quite a stir. After almost two years and one pandemic, the restaurant sector is investing more in off-premises concepts, which will put pressure on and provide new opportunities for developers of food and beverage products.
According to research released by the National Restaurant Association (NRA) in 2019, 60% of foodservice events took place off-premises, and almost 80% of restaurant owners stated that creating an off-premises plan was a top concern. After the COVID-19 epidemic struck, what had been considered a strategic priority had become imperative. Many operators are devoting more of their efforts these days to takeaway and delivery services than to sit-down offerings.
Operators of foodservice are paying attention. The Wendy’s Company said on August 11 that it would establish and run 700 delivery kitchens throughout the US, Canada, and the UK over the course of the following five years. It is anticipated that fifty kitchens will open this year, while the remaining kitchens will open by 2025.
Todd Allan Penegor, president and chief executive officer of The Wendy’s Co., stated during a conference call on August 11 to discuss second-quarter results, “This commitment builds on the successful test that we completed in Canada and will allow us to further develop urban markets where we are currently underpenetrated.” “The results we’ve seen are encouraging, but we’re still very early in our nontraditional development journey.”
This past March, Red Robin Gourmet Burgers and Brews, Inc. introduced three virtual brands. There are salads, wraps, and sandwiches on the Fresh Set menu; there are chicken-based sandwiches, tenders, and sides at Chicken Sammy’s; and there are wings and sides at Wing Dept.
Paul J. B. Murphy, president and CEO, stated, “Although it is still early, we are excited about the performance to date,” on a call on August 18 to go over second-quarter results. “As of right now, the data shows that roughly 70% of our virtual brand visitors have never placed an online order with Red Robin, proving that we are using this channel to reach and activate a completely new audience.”
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The development of comprehensive virtual and off-premises initiatives by certain foodservice operators will require food and beverage product makers to adjust as well. Priority will be given to formulas that can endure the rigors of takeout or delivery, for example.
Additionally, speed will be crucial. Operators can more easily modify or alter menus entirely to better suit the needs of regional customers thanks to virtual ideas. Menu designers need to be able to stay up to date with these developments and, in certain situations, develop the ideas that will spur change.
2020 was dubbed “a year unlike any other” by the NRA, and foodservice trends are getting better in 2021. Based on seasonally adjusted statistics, restaurant sales in July totaled $72.2 billion, as reported by the US Census Bureau. The fact that sales in July 2021 were 9.1% higher than pre-pandemic sales in February 2020 is more significant. Product developers need to get ready to accept the changes that lie ahead, even when it seems like the worst is behind the business.