Hospitality Business Magazine

Struggling foodservice brands should embrace dark kitchens

Despite seeing losses in revenue, foodservice outlets have reported that deliveries in several markets are growing. Market leader McDonald’s effectively doubled its deliveries in Australia, for example, to almost 10% of sales. However, without an army of franchisees, smaller, independent operators are unlikely to pull off the same feat, facing a multitude of operational and economic obstacles. For these businesses, there may be hope in dark kitchens, says GlobalData, a leading data and analytics company.

Ryan Whittaker, Consumer Analyst at GlobalData, comments: “Consumers are understandably reticent about trying to get back to normal too quickly, but they are still interested in the occasional indulgent meal. According to a survey by GlobalData, 34%* of global consumers agreed that they expect to order restaurant deliveries more often than pre-COVID-19.”

As infections and responses fluctuate by nation and region, foodservice is expected to continue to experience significant disruption. Dark kitchens, sites that exist solely to serve the delivery needs of foodservice brands, allow brands to extend their reach from relatively cheap real estate – such as industrial estates or car parks – while avoiding direct contact with customers.

Whittaker continues: “Driven by logistics-focused aggregators such as Uber and Deliveroo – alongside more integrated companies such as Keatz or Taster – dark kitchens can allow restaurants to operate out of purpose-built, low-cost structures, often with multiple brands and operators on site. As recently as last year, these operations were shown to be attracting tech investors like SoftBank and Amazon. Ultimately, these solutions can keep costs down and extend the radius of delivery substantially for foodservice brands.

“In the absence of a vaccine and tumultuous infection rates, many brands will have to innovate delivery to stay viable. Dark kitchens present a key strategy to get hot food into the customer’s hands as quickly as possible.”

* COVID-19 week 4 recovery consumer survey, based on ‘strongly agree’ or ‘somewhat agree’ responses