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Ghost kitchens, also known as virtual or dark kitchens, allow restaurants to operate food businesses without the costs associated with dining spaces, waitstaff and other aspects of a traditional bricks-and-mortar location. They are commercial kitchen spaces that are rented out to prepare food strictly for delivery and takeout orders. Restaurant owners can focus solely on improving their delivery operations through ghost kitchens. The growing preference of customers towards delivery and take-out food options has boosted the demand for ghost kitchens globally. Ghost kitchens offer restaurants a more cost effective way to increase their delivery zones and cater to more customers. They minimize overhead costs and improve profit margins for restaurants.
The global Ghost Kitchen Market is estimated to be valued at US$ 70.37 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the ghost kitchen market is the rising popularity of cloud or shared kitchen models. In the cloud kitchen model, several restaurant brands lease commercial kitchen spaces together from professional operators. This allows small restaurants to enter new markets and expand their delivery zones without investing in expensive real estate and infrastructure. Brands partnering with cloud kitchen operators gain access to turnkey solutions for delivery logistics and operational support. Companies like CloudKitchens, Kitchen United and REEF Technology are leading players in the cloud kitchen space. Their large-scale, centrally-located facilities enable restaurant partners to test new concepts and scale up operations efficiently. The cloud kitchen model is expected to dominate the ghost kitchen industry over the forecast period due to benefits like low costs and flexibility for restaurant owners.
Key players: Key players operating in the ghost kitchen market are CloudKitchens, Kitchen United, REEF Technology, Virtual Kitchen Co., Zuul Kitchens, Deliveroo Editions, Kitopi, DoorDash Kitchens, Swiggy Access, Uber Eats Kitchens, Rebel Foods, Ghost Kitchen Brands, JustKitchen, and Keatz. These players are focusing on partnerships, raising funds for infrastructure development and enhancing their virtual brand offerings.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the ghost kitchen market requires high initial investments and infrastructure development. However, low operational costs and access to third party delivery platforms provide opportunities for new entrants.
Bargaining power of buyers: The bargaining power of buyers is high due to availability of multiple regional and national chains offering similar services. Also, buyers can easily switch between providers based on price, quality and menu variety.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as key resources include commercial kitchen spaces, food ingredients and logistic support which have low switching costs. However, equipment vendors hold some pricing power.
Threat of new substitutes: The threat of substitutes is low as ghost kitchens provide a unique value proposition of low operating costs without dine-in spaces. However, quick-service restaurants pose competition.
Competitive rivalry: The competitive rivalry is high due to growing number of players and partnerships in the industry. Ghost kitchen chains focus on expanding their geographic footprint and diverse menus to gain market share.
Key Takeaways
The global Ghost Kitchen Market is expected to witness high growth. The global Ghost Kitchen Market is estimated to be valued at US$ 70.37 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030.
North America currently dominates the market owing to strong adoption of online food delivery services and concentration of major players in the region. Asia Pacific is estimated to be the fastest growing market for ghost kitchens during the forecast period propelled by growing young population, urbanization, and rising incomes in countries like India and China. Ghost kitchen brands are expanding their footprints in tier-2 and tier-3 cities through partnerships with cloud kitchens and delivery platforms.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
