It’s a $5 billion dollar business by 2025. Interested? The fastest growing movement within the foodservice business is turning your kitchen’s capabilities into a virtual brand. Let’s cover some basics on the topic of virtual brands and ghost kitchens.
The idea of leveraging your brick and mortar investment, foodservice kitchen and staff for a virtual brand is enticing. With the pandemic crushing dine-in business, most operators have already turned to mobile ordering. Why not utilize that new knowledge in growing delivery orders through a virtual brand with only a marginal increase in costs? You need a logo, an ordering app, a limited menu, and a brand. Right? Much of that is true, but here are some other things to consider.
The Pros & Cons of Third-Party Partners
DoorDash and GrubHub have launched major campaigns to convince operators that they can leverage their mobile platforms and existing customer base as their backbone for virtual brands. Third-party delivery companies thrived as operators scrambled to find a delivery platform, paying 25–30% to them for every order. Now, tack on an extra 15% for buying into one of several existing virtual brands, offering a near turn-key experience.
GrubHub’s branded virtual concepts includes Tyga, a rap artist with 39 million social media followers, Mario Lopez, known by appearances on Access Hollywood and Saved By The Bell, and MTV personality, Pauly D. By leveraging the existing social following of these brand ambassadors, traffic to virtual brand operators in almost any city would experience quick trial and word of mouth buzz. Beyond the branding, these packages include the menu and branded packaging tied to the brand.
Survey Your Market
Does your market need another purveyor of chicken wing when there are no great Indian, Korean, or Thai foods in town? This is your opportunity to cash in on an underserved culinary need within your market without the cost of bricks and mortar. Famed multi-concept operator, Lettuce Entertain You in Chicago, revived former concepts such as Vong’s Thai Kitchen, Ben Pao, Naoki Sushi and Brasserie Jo as virtual brands that have come to life.
Global flavors are hot. According to Technomic’s latest “State of the Menu” report, here are the fastest-growing global flavors as you consider your menu and your virtual brand:
Keep Your Brand Fresh With LTOs
Now that you don’t need staff to bus tables or wash dishes, keep your virtual menu fresh with new, crave-worthy LTOs that you can leverage on social media and your order app to entice customers to come back for more and tell their friends. Remember your appetizers as well as your entrees and desserts. Be sure to include in the mix a bevy of unique beverages, including cocktails to drive your average ticket price upward, even though beverages need to be transportable.
Double Duty For Your Pantry
Look at what is in your pantry. Can some of those ingredients serve double duty for your virtual brand? For example, Red Gold® offers a line of fully prepared tomato sauces. The marinara or pizza sauce that you serve front of house can also be used for your virtual brand’s meatball sub (meatball subs grew +19% in the last year) or loaded pizza fries. Getting more from your pantry can reduce incremental costs for launching your virtual brand. Red Gold offers free samples of its prepared sauces if you wish to review them for your menu.
Look At Your Kitchen Equipment Needs
A sandwich shop might not have a vented hood for deep frying chicken wings. One operator we spoke with purchased a used ventless deep fryer to prototype his expedition with his own virtual branded wings business while he served sandwiches out the front door. His focus was creating Instagrammable concoctions of wing sauces that were sure to entice Gen Z and Millennial customers. Whether you choose to launch your own brand and rely on your existing subscribers for your mobile ordering, or cast your lot with a third-party delivery provider, opt for a menu that reduces your cost in equipment necessary to produce it.
A key element for your virtual brand is assuring that your packaging is memorable. For example, use stickers or other branded elements that promotes the next order, such as listing your virtual brands ordering site or QR codes and coupon specials for their next order from your cravable menu. Red Gold is the leader in restaurant-branded packaging such as portion control packets and cups of ketchup. These too can be effective ways to market your brand. Request your portion control condiments sample kit now.
Summing Up The Opportunity
There may be no better opportunity to try a new branded concept than now. Even with the hopeful reduction in the COVID pandemic and the return of dine-in customers to your restaurant(s), consumers will continue to choose the convenience and variety of virtual brands. With the education in delivery that you’ve suffered through the pandemic, why not leverage that knowledge with your own virtual brand(s)?