VIRTUAL BRANDS


T


he omnichannel disruption that has already transformed the retail and apparel industries is now making waves in the foodservice sector. New, innovative, digitally enabled sales


approaches give consumers more freedom and flexibility than ever before, offering an inviting, seamless experience from dine-in to order-in. Digital brands are a powerful, growth-boosting strategy primed to capitalize on order-in potential.


The surreal-sounding ghost kitchen, cloud kitchen or virtual kitchen is the name for restaurant infrastructure that offers no dine-in option. A digital brand can operate out of a ghost kitchen or an existing restaurant ‘host kitchen’, giving consumers the option to order food and have it delivered, usually over a third-party app. How does the digital brand differ from traditional takeout? Designed for delivery, the digital brand is a different offering from the base brand, enabling existing restaurants to fill their gaps and new restaurateurs to lower their risk, unlocking unique growth opportunities in the sector.


Reach for more


Digital brands are being developed far and wide across the foodservice industry. In the US, Chili’s has recently launched It’s Just Wings, with a pared-down menu for pickup or delivery; Denny’s has rolled out its Burger Den and The Meltdown virtual kitchens;


and IHOP has announced Super Mega Dilla, (over-the-top quesadillas) and Thrilled Cheese (melts) for order-in options. “Big national chains are using digital


brands,” says Meredith Sandland, interim CEO at Stealth Mode and co-author of Delivering the Digital Restaurant: Your Roadmap to the Future of Food. “That might seem a little confusing, since they already have a national brand presence and physical presence. But the way to grow a restaurant is to expand your reach among consumers or expand your frequency – by getting your consumers coming in more often.” And virtual brands are giving national chains the power to do just that, by targeting a different segment of the population or a different daypart from the base brand. IHOP, for example, is traditionally a breakfast establishment. “If they can figure out ways to utilize that kitchen during other dayparts through a digital brand, they’re going to grow their frequency and expand their reach,” explains Sandland. This way, restaurants with existing


infrastructure unlock possible growth by optimizing the use of their kitchen infrastructure, says Sandland: “Service Physics estimate that most American kitchens are running at about 50% capacity utilization. Virtual kitchens are figuring out how to fill that capacity with other things.” The potential here is enormous, and many restaurants need only recognize the value of


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“Building a restaurant is hard, so if there were a way to come up with a brand, put it out there and test it, that would be great”


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