Starting a virtual concept can be somewhat daunting. Especially as the restaurant industry reopens, it’s yet another complex thing to worry about along with everything else.
Three savvy virtual restaurant experts offered three key things to think about, as they shared during a Food On Demand virtual event titled Building Success with Ghost Kitchens & Virtual Restaurants. In a panel exploring what to think through when starting up a virtual concept, restauranteur and consultant Alistair Levine, Kitchen United Chief Business Officer Atul Sood and Flipdish North America President John DiLoreto shared their top considerations.
1. Don’t Forget the Basics
Levine said his No. 1 checklist item is just remembering the basics of restaurant development.
“Really, it’s about figuring out—just like a traditional restaurant—a consumer fit and what the opportunity is for a concept in a given geographic area. If there’s a mac-and-cheese concept nearby that’s already doing really well, it could be challenging to pull market share,” said Levine. “Just as if you open up a taco shop next to Chipotle, it’s probably not the best business plan. We all want to make this more complicated than it is, but at the end of the day it’s figuring out what consumers are looking for and how to get it in their hands whether it’s in store or in their homes.”
Levine used that mantra to create a virtual mac-and-cheese brand out of one of his San Francisco restaurants. He saw mac and cheese selling well even deep in the menu (what do you mean by deep in the menu?). He said it was a cost-effective way to launch something new that the trade area already wanted.
“The market is ordering a lot of this, why don’t we see how much more we can get the market to order?” said Levine. “So, we riffed on that and came up with five or six pre-made options and a make-your-own solution. We stood it up for about $2,500, it was a social media account and a DoorDash account. And mac and cheese has pretty solid margins and very little food waste, so this was the perfect thing.”
2. Great Food, and Great Presence
DiLoreto said his top item is also great food, but close to the top would be taking care of the digital basics.
“It doesn’t matter how great your technology is if you don’t have great food, it doesn’t matter,” said DiLoreto.
Of course, he has some technology tips gleaned from hundreds of virtual restaurants on the Flipdish platform.
“There are some real basics that don’t cost any additional money. If you set the table right, you can have a ton of success without pending a single dollar,” said DiLoreto. “The No. 1 piece is owning and protecting your Google My Business. Every business out there has a page and you can claim it, and when you claim it you can edit it. You can actually call and get the third-party links removed and control that customer experience. So, when you get that accurate and get links on your Facebook, Instagram, TripAdvisor page, those are all free and you can control that experience no matter how your clients find you. You can provide them direct commerce link no matter how they find your brand and it doesn’t cost a penny.”
He said it’s just crossing T’s and dotting I’s for any restaurant brand, but especially one that exists only in a digital space.
Flipdish helps restaurants create their own digital ordering infrastructure. That’s a crowded space these days, but he says tools like Flipdish that pull together all the data flowing through digital restaurants are increasingly important as well.
“When you are thinking about diversifying, you really should think about a partner that can do this all together where you can combine all your disparate data streams into a single device. We think it’s really important if you are going to add on more complexity, you’re constantly thinking about how can you consolidate the data in a single place in the restaurant so all your data and all your orders are coming to a single place,” said DiLoreto, adding that the human side of tech is important, too. “We always talk about pick a partner that you can pick up the phone and call and they’ll be there. When you do make a more complex tech stack it’s not helpful if you only have a chatbot to say, ‘My orders aren’t coming in.’ We think as restaurants become more complicated that you need pick a partner that can support you.”
3. Location, Location and Digital Marketing
Sood, who helps folks get started virtually all the time, has fresh insights from the second purpose-built Kitchen United location in Austin.
“I will echo Alistair, in terms of location, location, location. I still think that’s super important and I’ll echo John, as well, in terms of quality of food. To add to that, digital marketing savvy is super important right now, paying close attention to how you market yourselves either on the third-party apps or in social media is important. It’s getting to be a crowded channel in the restaurant space and getting those eyeballs is not easy, so coming in with digital marketing savvy is super important.”
As for the shared kitchen locations, there are some critical bells and whistles he points to. First, the “Mix” platform that allows people to order from multiple restaurants within a Kitchen United facility and the enhanced efficiency possible in a forward thinking shared space. That’s an offshoot of location, the concept has to fit the market but the right space makes operating easier.
“What you’ll see is we’ve paid close attention to technology and to labor costs. All of our facilities will have conveyer belts that run through the back of house that the kitchen opens up into,” said Sood. “They create the food, package it up and drop it on the conveyer belt. Those take it out to the front of house which is a walk-in area for both driers and consumers.”
The technology layer for the facility that empowers Mix also helps ensure that everything is well timed.
When you are ordering from different restaurants at the same time, different restaurants might have different fire times for different items,” said Sood. “You might want to order a rack of ribs which takes 15 minutes to cook. At the same time, we have Wendy’s where you might want a Frosty which takes 30 seconds, so how do you gate the fire times effectively so the Wendy’s is gated by 15 minutes while the rack of ribs is cooking. Through our Mix technology we have built in that multi-virtual storefront multi KDS kitchen line system to one expo center to make sure that’s all measured appropriately.”
These items are just a sliver of the great insight from these panelists. Don’t miss the panel or great ideas from other virtual restaurant gurus. Sign up for the free Building Success with Ghost Kitchens & Virtual Restaurants now and catch up on the recorded sessions!
