How a ‘ghost kitchen’ is adapting to meet the demands of over 100 restaurants during the pandemic

In urban areas, when hunger strikes, it's likely you can easily browse through a variety of your favorite eateries on your phone, and soon, a delivery driver will bring fresh food to your doorstep.

However, the meal you're receiving might not have been prepared where you expect. An increasing number of home-delivery orders are cooked in ‘ghost kitchens,’ not the restaurants customers order from.

Ghost kitchens, also known as cloud kitchens or dark kitchens, are specialized facilities dedicated to preparing food exclusively for delivery. These kitchens often operate in lower-rent spaces like warehouses or even parking lots, as they don’t need to attract foot traffic like traditional restaurants.

Some ghost kitchens are shared spaces, where multiple restaurants lease the area, while others are run by companies hired to cook for various restaurant or takeaway services.

Kitopi, based in Dubai, is a leader in the managed cloud kitchen industry in the Middle East, and it is expanding its reach into the US and UK markets.

‘It’s similar to franchising’

Kitopi allows restaurants to quickly scale by establishing a delivery presence within just 14 days, according to co-founder Saman Darkan.

“When a brand partners with us, they share their recipes, train us on their cooking methods, and we handle everything from start to finish,” he says. “It’s similar to franchising.” He adds that working with Kitopi helps restaurants avoid the costs associated with building their own infrastructure.

Restaurants pay an initial onboarding fee to join the platform, after which Kitopi takes a percentage of their revenue and compensates them with a royalty fee in return.

Darkan explains that in each city where Kitopi operates, there is a central hub kitchen where most of the meal preparation takes place. Smaller satellite kitchens, located near residential areas, then handle the finishing touches. For example, cakes are baked and salads prepared at the hubs, and then transferred to nearby kitchens for final steps before delivery.

Adjusting to the pandemic

When the pandemic began, Kitopi experienced a decline in orders. It temporarily laid off staff and halted its nascent operations in the US and UK due to the uncertainty of market recovery and in order to ensure the health and safety of its team members.

In May, Kitopi adapted to the pandemic by launching Shop Kitopi, an online grocery service that utilizes its existing supply chain to deliver food items throughout Dubai.

However, Darkan believes that the coronavirus crisis could ultimately benefit ghost kitchens.

“Delivery services were already on the rise before Covid-19, then the pandemic caused a brief drop, but soon after, we saw an increase,” says Darkan. He notes that his company is attracting new customers who prefer home deliveries to minimize the risks of dining out.

Michael Schaefer, who leads Euromonitor International's research on the global restaurant industry, states that global food service delivery sales more than doubled between 2014 and 2019.

He notes that while dine-in traffic was the dominant form of restaurant sales before the pandemic, it’s uncertain how much of that will return. “We’ll see more innovation with models like ghost kitchens that cater to growing delivery demand,” he said. “I believe third-party delivery services are here to stay.”

The rise of ghost kitchens could lead to intense competition for companies like Kitopi, particularly if delivery platforms like Uber Eats or Just Eat decide to also handle food preparation.

“It’s still unclear whether major delivery platforms will build their own ghost kitchens,” says Schaefer. “However, we’re likely to see more third-party companies entering the ghost kitchen space.”