The concept of food delivery began in the late 19th century when European royalty ordered pizza. This was an ingenious solution to the problem of eating at a public restaurant, which entailed certain dangers and wasn't always possible to make a quick stop for lunch. Restaurateurs had to package the meals and deliver them to the palace, which was time consuming and expensive. Today, technology-based transactions are made every day with thousands of orders, hundreds of drivers and dozens of so-called “ghost kitchens” hidden in shopping malls or industrial areas adjacent to the highway.
In Los Angeles, these ghost kitchens have become the national epicenter of this burgeoning business, which has attracted billions in investment in the technology industry and, driven by a pandemic that has paralyzed restaurants, has the potential to radically reshape the way we eat. Before COVID-19 hit, food delivery apps had begun to reshape the restaurant industry. More and more people were ordering food to eat at home, and a significant part of those sales were facilitated through apps. This has led to a redefinition of what constitutes a restaurant, with the only requirement being a kitchen.
These ghost kitchen restaurants market their food directly to users of the home delivery application, leaving some customers largely unaware that their restaurant doesn't physically exist as a standalone physical facility. There is no singular type of ghost kitchen, although there are several configurations that have become increasingly popular. The simplest are those that are based on a real restaurant and use existing kitchens to offer new cuisines or concepts available exclusively in home delivery applications. Investors with little or no experience in the restaurant business have invested millions in building shared kitchen spaces, which offer fully equipped and permitted food preparation areas that businesses can rent and staff in exchange for monthly rent and a percentage of sales.
One of the first and largest of these companies is City Storage Systems, a Los Angeles-based startup co-founded by serial technology entrepreneur Diego Berdakin. CloudKitchens filled their stalls with a dozen kitchens, and many of them licensed several of CloudKitchens in-house brands for an additional fee. This meant that the warehouse could house up to 100 virtual establishments, such as Skinny Bitch Pizza, Pizzaoki with the Steve Aoki brand and Made in Brooklyn NY Pizza. After investing heavily in branding and digital marketing, Ggiata was able to develop a sizeable fan base for its sandwiches, even though many customers didn't know that the “restaurant” was located inside a CloudKitchens grocery store. CloudKitchens has expanded rapidly and opened ghost kitchen curators in Koreatown, Long Beach, Anaheim and the city center.
The company has also opened or acquired dozens of locations in cities across the country: Houston, Atlanta, San Diego, Chicago and Orlando, Florida. Competing facilities have also emerged such as Kitchen United in Pasadena and The Colony in West L. A.The ghost kitchen economy is here to stay. With its potential to radically reshape the way we eat, it is clear that this industry will continue to grow as more people turn to food delivery apps for their meals.
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