Shining a light on dark kitchens

Shining a light on dark kitchens

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What do Sigma and commercial kitchens have in common? Perhaps surprisingly, the answer is rather a lot, especially when it comes to taking the shell of a space and delivering a holistic approach to fit-out to ensure the end result is fit for commercial use.

Post By Craig Bennett -
CEO
As experts in commercial space transformation, Sigma is a trusted partner in undertaking a range of fit-out work, from updating self-contained concessions through to the repurposing of large-scale warehouses and other commercial spaces.

With an ever-increasing level of creativity being applied to the use of non-residential space, Sigma is cooking up a new service offering to support the creation of ‘dark kitchens’.

If you’ve ever ordered take-out from a delivery-only restaurant, the chances are you’ve already eaten from a dark kitchen. This new phenomenon is opening up business opportunities for a whole new generation of chefs and entrepreneurs whilst satisfying the already huge demand from the general public for restaurant-quality food at a fraction of the price and without needing to leave their home.


What is a dark kitchen?


Also known as ghost, virtual, cloud, central, satellite and commissary kitchens, dark kitchen is a relatively new term used to describe a commercial kitchen without a dining area; the food cooked is purely for onward delivery.

The workspaces are usually windowless which, coupled with the fact that consumers often aren’t aware that their food has been made here, has given rise to the name ‘dark kitchens’.

It’s a relatively simple model; a location is owned by a third party with space rented out to store, prepare and cook food that is then taken elsewhere for consumption.  This could be as a feeder kitchen for a more established restaurant, where prep and volume cooking can take place, or more commonly, delivered directly to a hungry customer in their home.  There has been a notable rise in demand for an eclectic and diverse range of cuisines for customer to access without having to leave their home and dark kitchens are ideal for feeding this trend.

It can also have benefits for those looking to expand into new geographical areas or to test new concepts through pop-up restaurants or trials.  It’s the equivalent of a short-term let with minimal investment and up-front costs needed from the perspective of the food entrepreneur, and a reliable investment opportunity for building owners that could accommodate this style of flexible commercial kitchen.


Why think about using a dark kitchen?


In summary, it’s a hugely cost-effective solution.  Whether starting out, testing the market or expanding a more established offering, setting up a new commercial kitchen requires significant investment.  Opting for a common kitchen arrangement immediately drives cost-savings through reduced overheads, the option for shared equipment and significantly lower operating costs.

There’s also the advantage of an improved working environment; dark kitchens are typically housed in more space than takeaway or restaurant kitchens which brings lots of benefits: more space to work in, more equipment to access and more storage.

Mexican restaurant Tortilla, fried-chicken brand Coqfighter, burger joint Boo, sushi business Zumu; there’s a growing list of restaurant brands gaining a loyal following that all operate out of dark kitchens.  For all, the ability to access a restaurant-standard commercial kitchen on a short-term lease basis whilst they test the market and establish their brand is one of the biggest draws.


What are the benefits?


Greater efficiency: as all supplies are stored in one place, it’s easier to manage inventory and correctly estimate product needs whilst allowing orders and deliveries to be optimised to a single location.  Where a shared-kitchen approach is adopted, there may also be efficiencies of scale to be gained through a cooperative style approach to ingredient and product purchases.

Cost savings: there are more options available for the hire and usage of top-spec industrial catering equipment meaning less outlay financially.  Increased storage availability also means bulk-buy savings can be maximised and waste minimised.  Direct staff costs can also be minimised as the -direct to customer approach means there are no front-of-house or customer-facing roles that need fulfilling.

Market expansion possibilities: as recurring monthly costs such as utilities, lighting and rates are potentially shared across multiple tenants, it means it’s easier to trial new ideas without needing huge investment, particularly where home delivery or online retailing is involved.

Consistency and quality: a stable environment is provided where recipes can be easily replicated with the same equipment by the same staff.

Often there are additional ancillary benefits to be had, such as access to compliant hygiene and waste disposal systems, on-site parking and even shared office space.

Deliveroo Editions are a cluster of small professional workspaces that allow established eateries to tap into the home delivery market without over-stretching existing sites. There are now 16 ‘dark kitchen’ sites across England housing about a hundred stainless-steel kitchens. Some have pizza ovens, others fast-flip burgers.

The different restaurant brands have their own staff and cookers, but they share shelves and facilities. Most crucially, it's Deliveroo paying the bills; no rent, no rates, no utilities.

All restaurants chip in is commission on each order, which varies from business to business.  Based on an estimated additional 30% on top of existing restaurant sales, it’s a highly profitable model.

The truth is, the concept of a ‘dark kitchen’ isn’t all that new, which is perhaps why the general public isn’t fazed by not knowing where their food was prepared.  Not only are we used to being faced with the swinging kitchen doors of a take-away that we never see behind, but we’re also so adept at multitasking that even when in a venue with its own kitchen, very little attention is paid to this.

Big brands can’t help but get bigger!


 McDonalds are opening up their first UK virtual kitchens to keep up with demand for their signature fast food, while reducing kitchen costs. This move from one of the biggest high street restaurants and fast-food chains might just signal the start of a goldrush by other similar brands. If this new scheme works out, there is no reason why Burger King, Nando’s and similar chains won’t get on board too.

There’s also an opportunity for smaller businesses to get smaller, but more profitable, by using a single kitchen to feed multiple takeaway businesses.  By removing the traditional take away establishment option of collection and changing to a delivery only model, a single dark kitchen could supply orders to multiple geographical areas under the guise of different brands.

The online delivery market has been a leveller for small food businesses by giving them equal access to customers without a storefront, so it was only a matter of time before large scale food brands started concentrating their investment online – especially with the continued rise of food delivery in the UK.

For food entrepreneurs, catering businesses and even established brands who are looking for the next step in their food and meal creation, dark kitchens offer a unique opportunity.

There’s also an opportunity for smaller businesses to get smaller, but more profitable, by using a single kitchen to feed multiple takeaway businesses.  By removing the traditional take away establishment option of collection and changing to a delivery only model, a single dark kitchen could supply orders to multiple geographical areas under the guise of different brands.

The online delivery market has been a leveller for small food businesses by giving them equal access to customers without a storefront, so it was only a matter of time before large scale food brands started concentrating their investment online – especially with the continued rise of food delivery in the UK.

For food entrepreneurs, catering businesses and even established brands who are looking for the next step in their food and meal creation, dark kitchens offer a unique opportunity.

 
 
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It’s not just the capital that’s seeing high growth in the use of dark kitchens.  In the Yorkshire city of Leeds, the Deliveroo Editions concept is living and breathing with a commercial shared kitchen capable of housing up to six ‘tenants’.  For Indian restaurant brand Zouk, pizza joint Proove and Chinese cuisine brand Noodle Inn, the ability to reach a new and far-reaching customer base without having to invest in their own commercial premises has been key to their success.

More than this, it’s the benefit of everything else that is being provided that makes this a winning formula for so many delivery-only brands.  Deliveroo provides the facilities, delivery drivers and centralised services including cleaning and site management.  On the part of the brand, they must provide chefs, ingredients and recipes for their kitchen space and crucially, must maintain a four or five-star hygiene rating.

With low start-up costs, flexible contracts and 24/7 access, it’s a win all round – the venue owner achieves their rental income, the tenant benefits from the commercial kitchen environment and the general public continue to have their demand for gourmet meals at competitive prices met.
Sigma is uniquely positioned to bring commercial transformation expertise alongside proven experience in developing commercial catering environments to develop the dark kitchen concept for building owners and investors looking to provide cutting-edge facilities to food entrepreneurs and restaurants as part of an attractive proposition.  With extensive knowledge of delivering shared service and multi-tenant offerings in a variety of environments, Sigma is well-placed to apply its expertise to deliver this new concept in commercial kitchens.

Read how Sigma supports retailers in delivering their instore concession kitchens
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Are you interested in the Dark Kitchens concept? Maybe you’re a start up foodie, a building owner, or an investor? We’d love to talk with you to see how we can bring your commercial kitchen to life.

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