Dark kitchens: Where does your food delivery really come from? | CNBC Reports


This is a dark kitchen, also known as a virtual,
or ghost kitchen. It sounds a little intimidating, and for many
in the food industry, it is. These kitchens are creating a whole new ecosystem
of food preparation and delivery designed to cater directly to online customers. The global online food delivery market made
more than $91 billion in 2018 and is projected to generate revenues of nearly $165 billion
by 2024. The industry’s meteoric rise has seen several
large online delivery companies pop up. In the U.K. alone, Deliveroo, Uber Eats and
Just East are battling for a piece of the multi-billion-dollar pie. To offer more food delivery options to areas
with unmet demand, companies such as Deliveroo started to provide remote ‘dark’ kitchens’
to restaurants. These facilities, which consisted of portable
cabins and windowless shipping containers were criticised by some, saying many customers
were unaware that this was where their food was coming from. Despite the negative response,
dark kitchens are becoming increasingly popular, with Uber Eats recently opening
its first kitchen in Paris. And for many companies it’s an industry
that is offering new business opportunities. There are a variety of approaches start-up companies
are taking to offer a delivery-only food service. Some are simply focused on setting up and
hiring out kitchens in the right urban locations. London-based company Karma Kitchen offers
shared kitchen space to catering companies and restaurants that want to set up dark kitchens. Co-founders and sisters Gini and Eccie Newton
started the company after struggling to find affordable kitchen space for their
own catering business. One of our biggest challenges and close to
failures was actually finding kitchen space, and we just couldn’t believe that there
was nothing kind of flexible and affordable in the market that we could just move into. It was 24 hours a day, seven days a week rent,
but we were actually only using the kitchen for a short amount of time and when
we solved that problem for us, we ended up kind of solving it
for a few more people. One of those people is Chloe Stewart who is
founder and CEO of Nibs Etc, a sustainable food company that
makes granola from food waste. So this is our juice pulp granola. So it’s made from fruit and vegetable pulp
that normally gets thrown away, so it reduces waste and it’s super nutritious in the process. I know time is money in this business, so
what do I need to do? Yeah, so basically if you could wrap this? So how long have you been making
your granola in Karma Kitchen? I’ve been here just over a year actually,
and it was the perfect sort of next step after being at home because I’ve never spent a
lot of time in commercial kitchen so learning how people organize and keep
track of ingredients and date things. It’s something I wouldn’t have gotten
sort of being on my own. How’s that? That is a perfect looking granola bag. Look at that, a pro. Buying and then renting out kitchen space
to businesses like Chloe’s is a model that even former Uber CEO Travis Kalanick
has invested in. His company City Storage Systems, which in
the U.S. operates under the brand CloudKitchens, acquired dark kitchen start-up FoodStars back
in 2018 and with it more than a hundred commercial kitchens in several locations across London. Some companies are going even further. Dubai-based kitchen services company Kitopi
has created a cloud kitchen network that not only provides the infrastructure for food
delivery operations, but also cooks and delivers the food themselves. We purchase, supply and store your ingredients. We prepare and cook your food at our facility. This means restaurants will be providing food
to customers that they’ve had no involvement in cooking and preparing, apart from the use
of their name on the packaging. The dark kitchen market is
expected to grow fast. In Europe last year it was worth
more than $250 billion. It’s set to more than double in size by
2026 to be worth around $650 billion. Demand for cloud kitchens is being driven
by the online food delivery industry. According to the CloudKitchens website, its
commercial kitchens are ‘optimized for delivery,’ and Karma Kitchen says between 30 to 40% of
its space is occupied by delivery-only restaurants. Suhail Hasan is the founder and managing
director of Tinseltown Group, a collection of brick-and-mortar
and virtual delivery restaurants. About three years ago,
Uber approached us. We had zero percentage of deliveries and now
we’re between thirty and forty percent and growing every week. The advantage of coming into like a shared kitchen, it allows you to trial a concept. Working with Uber Eats they give us a lot
of data and information of what areas we need to be going into, what products are selling. Very, very low capex compared to what we were
used to in the past. Running costs are significantly less and we’re able to trial a concept and it
gives us a very quick and efficient route to market. Two kitchens down from Tinseltown is another
restaurant that has seen the success of expanding their food delivery operation. He had this idea, and it was actually a great idea
because I think deliveries are the future. Ivo and Filippo are both from the Italian
capital, Rome. They have one brick-and-mortar restaurant
called Al Dente in central London, but following the increased demand for deliveries they decided
to hire a dark kitchen. Panna cotta, this is the panna cotta. It’s a really good option. You’re not locked into a contract. You pay monthly and you don’t have to risk
the amount of capital that we had to risk initially, let’s say, to set up the whole
restaurant. Here you move in, you have everything ready
and it’s just a matter of seeing whether people in the area like what you’re selling. It’s not something that you usually order
to get delivered. That was our mentality, you know. So, even then, we were not that sure how good
the pasta would be in terms of deliveries, but it ended up being quite a successful part
of the business. We cover a certain area now in Fitzrovia. We cover Mayfair, some part of the City, so
we’re constricted let’s say. Most online food delivery companies set a
delivery radius, which varies from city to city. Its aim is to reduce the time food is in transit. So if a restaurant wants to expand its delivery
market size, opening a dark kitchen seems to be the simplest option. Hawaiian and Japanese-inspired restaurant
Maki & Bowl has done just that. They have one brick-and-mortar restaurant
in west London and have now rented kitchen space in east London at Karma Kitchen. We can go to the city and we can like test
the waters without having to invest really big. So having a physical shop, people can come
in, they can see our faces, we can smile at them. Over here they don’t see our faces but hopefully
when they do order and it comes to their desk or wherever they are, they have that first
bite and hopefully they’ll fall in love and say, you know what, this is good. For restaurants wanting to expand, dark kitchens
seem like a great option, but for the customer ordering delivery, is the origin of their
food clear and transparent? Do people know when they order your food from
this site that it’s coming from a dark kitchen? I think they do because… Why? I don’t know actually.
Maybe they don’t, you’re right. You know, maybe they don’t because if you
Google Maki & Bowl, we’ve actually got a physical site, but you won’t find us in
Hackney so they might be thinking, ‘How are they here?’ I got a call in the other restaurant from
people that order from here, from Karma Kitchen, and I had to explain to them that your dish
came from another kitchen actually. I don’t know if the person who’s ordering
that actually knows that it’s come from here, but is that a problem? I don’t think so. The customer wants a consistent product. They want a good product that they like with
a good brand, and they want it to taste nice and it needs to be affordable. Beyond the appeal of dark kitchens, what does
this business model mean for traditional brick-and-mortar restaurants? In 2019, British TV chef Jamie Oliver saw
his restaurant empire collapse with the closure of 22 of its 25 restaurants, resulting in
roughly 1,000 job losses. He blamed online food delivery services as one of the
main reasons his restaurant chain went under. And as online deliveries become the norm,
some property experts believe this will reduce the number of bricks-and-mortar restaurants, subsequently increasing pressure
on Britain’s local high streets. Do you think you’re going to close
bricks-and-mortar stores? Because that’s one of the concerns is that
high streets are going to suffer? And you’re right. You’re not wrong there, high street is suffering. We started off as bricks-and-mortar, and we’re
adapting to how the market changes. The business case of having a big clumpy
restaurant doesn’t exist anymore. A whole segment which is delivery,
it’s here to stay. There are negative connotations
around dark kitchens. I mean the word dark seems quite sinister. Why is that? It’s such a new changing landscape, and
actually there aren’t that many in the U.K. So people panic when it’s unfamiliar. They’re not comfortable with it, and that’s
quite a natural reaction. It’s a bit separated from the original restaurant
perhaps, but it’s the same restaurant, same people, same owners and the same chefs who
are doing all of this work. If people did come to our kitchen, I think
that they would be really happy with where their food was being produced. It’s increasingly likely that the food you
order online will come from a dark kitchen, but whether this is a sustainable model for
the food delivery industry remains to be seen. For the moment though the convenience and
speed that these facilities offer means many are betting on them playing a key role in
the revolution. Hi guys, thanks for watching our video. We hope you enjoyed it. If you did please subscribe to our channel
but before you do that we’d love to know your thoughts on dark kitchens and the online
food delivery industry. Do you know where your food’s coming from? Comment below the video to let us know and
we’ll see you next time.


100 thoughts on “Dark kitchens: Where does your food delivery really come from? | CNBC Reports

  1. Wait what? So you think you're ordering Fire Birds but it's actually coming from a kitchen that cooks like fire birds and not the actual restaurant. Seems weird to me tbh

  2. I live in LA and there is definitely one a few blocks from me. I ordered Thai and it was delivered from my neighborhood.. there are no Thai restaurants in my Hispanic filled area. It was delicious and quick tho!

  3. It’s like an amazon fulfillment center but for food . Nothing wrong with it so long as they are held to the same health standards as the mothership restaurants

  4. Wait so you're complaining it's coming from a kitchen made just to serve you and looks cleaner then a regular restaurant kitchen wow that is the most obnoxious entitled thing I have ever heard come out of someone else's mouth.

  5. This is terrible, it means more people are working longer hours and don't have time to cook or spend time with family or themselves because they are too exhausted working. Is this truely innovation or just a band-aid fix to a new social problem? So this new generation cannot afford rent and most spend more money on fast food which is more expensive? This is awful.

  6. As long as it's cooked at par with brand name's standard and properly regulated, this is actually a terrific idea. I'm still gonna eat the food at the comfort of my own room.

  7. It's called a commissary kitchen and it's nothing new. Historically (and currently), restaurants have rented these spaces to fulfill catering orders or prep for large events.

    What the news loves to do is sensationalize everything. No, it's not a food prep business.. it's a tech company… So it's a cloud kitchen! No wait, it's a dark kitchen bc customers thought the food was prepared in a traditional restaurant – sike!

  8. Me: coming to comment section to see people discussing the concept

    Every comment: "I hate the name dark kitchen pls change it reee"

  9. The big chains and high end chefs have been doing this for years, I don’t see the problem. I used to work in London in the leisure industry, if you think your high end restaurant food is cooked on site in London these days, you’re years behind. Cooked off site, frozen and then delivered to site. You could even argue that this is the fresher approach for consumers!

  10. Very interesting. Agree with the others on the name Dark Kitchens but other than that I wouldn't care if my food came from this kind of place or some fancy place. It should be cheaper as they dont have the same overheads of a high street place, but I doubt it would be

  11. Wait so if a food borne illness comes from a kitchen, would all the places using it notify customers? How would that work?

  12. Dark sounds negative, but actually that's a really good concept for the restaurant and for the customers who can order their favourite dishes in different city areas because of that business concept. there is no fooling, it's just a great option for restaurants to expand their reach for uber eats etc.

  13. The name is terrible and makes it seem like a shady thing, but the concept is actually pretty cool. It creates more jobs for chefs and opens up space for home cooks running a business. It also opens up more delivery options for restaurants while putting less strain on their current staff by hiring someone to work in these remote kitchens instead.

  14. I’m not singling out CNBC, but only a MSM group would call this a “dark kitchen”. Trying to get old people and the uniformed to never try a new & different idea because they will associate it with scary words. No normal person would ever call these kitchens “Dark Kitchens”. These restaurants don’t hide anything scary that a normal restaurant do. E-kitchens. Express Kitchens. Closed-face kitchen… just as a few ideas.

  15. I guess it's a great business, cause people are comfortable. But if I want to test my restaurant concept I wouldn't want to rely on uber eats etc. to guarantee food quality. In my experience, except for cold food, soups and pizza to some extend, food quality and freshness goes down rapidly when delivery is involved.

  16. the kind of tools who order their food in because they're too busy programming the latest fart app instead of just going and getting their own or brown bagging it, don't give a shit where the food's made. Granola made from food waste, yum!

  17. This shit is GENIUS! As someone who orders for delivery often, I don't mind systems like this. As long as the food is good, and the same as the original restaurants, what difference does it actually make? This makes it cheaper for the business, more convenient for the customer (faster delivery and more options)… This is an amazing idea all around!

  18. Dark kitchen sounds like a gross post apocalyptic dystopian kitchen. (Like how the dark web was portrayed in wreck it Ralf 2. Lol) Like where the chef is a greasy obese half human half cyborg caricature grunting in a dim lighted soup kitchen while carelessly prepping orders and his kitchen sits buried in between slums and fallen apart computer businesses. Oh like the lower level city in the movie fifth element. Lmao 🤣

  19. UBER EATS,DOOR DASH, POSTMATES, GRUBHUB, CAVIAR That I know of don't do this. Other delivery companies with catalogs to order from are kinda questionable as I am not in knowledge what's going on.

  20. GHOST kitchen. Brilliant!!! I absolutely love this concept & think its great. I actually think this is cleaner & more controlled than a busy restaurant kitchen. Less room for error!

  21. Its just a damn commissary kitchen, they’ve been around since forever, mostly to provide consistent product to multiple franchise restaurants, only difference now is that they are direct to consumers now

  22. I don't understand the issue, these kitchens follow the same food safety guidelines of a normal kitchen because that's exactly what they are. This is great for catering businesses, or like said in the video any businesses that don't need 24/7 access to the kitchen space.

  23. Some of my food come from organic farmers market. I need to make sure that the food Is organic.cause you make it out of genetically modified food. That is how cancer is propogated
    In the body. What's the sentce to live just to die cause round up was used to poison the weeds of the plants you choose to consume of poison to kill weeds and fools that also eat the poison in thier foods they buy.

  24. stopped watching this, as it is sensationalist. Here in Australia, a food safety license is something like $2300, and that is to certify just one space. A cooking startup can't really afford that in most cases. So community groups got together and created spaces like this to help migrants and disadvantaged people start up food businesses. Labeling them as " dark kitchens" is a disservice and they are also no different from a regular kitchen! I'll bet CNBC did not go in saying they were doing a story about "dark kitchens".

  25. 7:57 I believe delivery will help local restaurants. I've ordered delivery from restaurants I would've NEVER bought food from otherwise. Say I want Chinese food, I'll likely order from a neighbourhood Chinese food place that hard to get to using public transport and/or in a hard to find location and/or and/or that I hadn't heard of beforehand. Every time I've eaten a meal at a local restaurant during the last year, there's been at least one time during the evening where I've seen a delivery guy come in to pick up a meal someone ordered online. I remember one time when I went to dinner last year with my mom at a Thai place. Five times during the evening a deliverymen came in to pick up orders. This was at an out of the way place.

  26. I absolutely don’t see the problem in here. Even if the customer doesn’t know it’s coming from a “dark” kitchen, it wouldn’t care as long it’s getting the right product that is rightly associated with the brand that they were wishing for.

    Pretty much like fast food chains. As long as I’m getting the same big mac, I wouldn’t care which McDonalds it comes from.

    The brick and mortar restaurants have been going on for so long doesn’t mean it needs to keep going. If people prefer delivery over physically going to the restaurant, then it’s best to adapt to the requirements. Pretty much how Netflix has replaced Blockbuster.

  27. Of course it's good for companies, they can hire and fire more easily that way if things don't work out. The risk is shifted away from owners to the actual workers in the company.

  28. This is what happens when mother stop teaching their kid how to cook. School stop cooking class. We become consumer slaves. The next generation will pay for everything.

  29. It's just the steady march of e-commerce, now into food. No one expects their purchases from H&M to come from the high street store. They know it comes from a warehouse. This is the same and people will get to grips with it over the next few years.

  30. I don’t care about it being a “dark kitchen” (purposely ominous sounding label?), I care about it being clean. By the looks of it, they are. No big deal.

  31. Who cares where the food is coming from as long as it tastes good and is fresh. Dark kitchen, dark hole, dark matter, I could care less what it's called.

  32. it just needs a rebranding. not only is this economical for caters, but also it provides cheaper delivery to customers over time. As long as its clean and delicious theres no issue. We just need to stop calling it "dark" which creates an unnecessary negative connotation. Most people just want good food.

  33. Interesting, first I thought a "dark kitchen" is something dirty underground, where you don't know how the food is produced and where the ingredients come from. It's nothing else then sharing offices, and here sharing kitchen. Am not a fan of food delivery, it produces to much rubbish and is not sustainable at all. Let the people go in the old school way to restaurants.

  34. Karma kitchen is two minutes away from me and i had very little idea that’s what’s been happening there so it’s interesting to see

  35. ?? Wait how is this any different from getting food from, an actual establishment?

    If they have chefs, proper equipment/ training, and a proper workplace, there’s nothing wrong with that.

  36. This is exactly like WeWork. Its essentially passing down the risk associated with restaurants to the landowner/faciltiy owner. Restaurants are already in a pretty volatile pro-cyclical market and when the economy goes belly up, all of these facility owners will end up left with the bag.

  37. Nothing wrong here. As long as they are bound by the same health regulations like restaurants and inspections.
    It's economically efficient for a world where people cater, order and pickup food instead of sitting in a café

  38. People worrying about how something is labeled instead of the quality of the food is as ridiculous as SJW's crying about the proper pronoun to call someone.

  39. Honestly, I think they should be upfront about it and let the consumer decide where they want their food to come from–dark kitchen or restaurant. If they don't want dark kitchen delivery, they may not have the benefit of the food being delivered in their area. Give people a choice. Supply and demand will take care of the rest.

  40. 2:04 So she SHOOK reporter's hand, and then proceeded to handle food packaging without having washed her hands first….Great Example of where basic kitchen hygiene standards are ignored! That is a NO for me for @Nibs Etc

  41. I mean if a restaurateur operates in these "pop up kitchen" 7 days a week, 365 days a year….. isn't that kind of now the restaurant company fixated operating location? Minus the front of house, customer waiting area, dine in service.

    It's definitely a flaw. Companies will only recruit their own chefs and staff, so as far as Customers are concerned, the restaurant brand is serving them.

  42. yeah, lets call it dark kitchen or ghost kitchen to scare people lmao, they probably have better food hygiene compared to regular restaurants

  43. this is so weird i always thought wings and things was a food truck or something i always wondered why it had a weird address and i found out wings and things is a ghost kitchen

  44. My biggest issue is the waste created with packaging. Restaurants can just wash the plates and utensils. Now the planet will be inundated with even more plastic

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