The Emergence of Dark Kitchens
As delivery and takeout services rapidly grew in popularity over the last decade, a new type of commercial kitchen emerged without a traditional dine-in setting. Known as "dark kitchens," these facilities are purpose-built kitchens designed exclusively for the preparation of delivery and takeout orders. Without the overhead costs of a physical restaurant front, dark kitchens are able to focus solely on off-premises food preparation and delivery logistics.
One of the early pioneers of the US Dark Kitchens, Ghost Kitchens, and Cloud Kitchens Marketconcept was Hive, a facility launched in 2015 in San Francisco which housed multiple virtual restaurant brands under one roof. Each brand had its own dedicated kitchen space and menu but shared back-of-house functions like receiving, storage, and waste management. This centralized model allowed multiple virtual restaurants to operate efficiently out of a single location. Other early operators like CloudKitchens and Kitopi soon launched their own variations of the shared commercial kitchen space model.
The Rise of US Dark Kitchens, Ghost Kitchens, and Cloud Kitchens Market Brands
As dark kitchen facilities proliferated, so too did the number of entirely virtual restaurant brands—often referred to as "ghost kitchens" or "cloud kitchens"—that operate out of them. Unlike traditional restaurants, these brands have no physical storefront and exist solely for delivery and takeout. Well-known names like Chick-fil-A and Chipotle launched ghost kitchen brands of their own, doubling down on the growing off-premises market. Celebrity chefs also got in on the act, debuting digitally-native cuisine businesses leveraging existing fan bases without incurring startup costs for a brick-and-mortar location.
The pandemic accelerated this growth trajectory dramatically as on-premises dining was curtailed or prohibited altogether. With demand for delivery and takeout skyrocketing virtually overnight, virtual brands flourished during this period. According to market research firm Technomic, the number of ghost kitchens tripled in the US between 2019-2021. Some operators launched dozens of new virtual brands in a single facility to capitalize on this surge in delivery orders. Just Eat alone reported a ten-fold increase in their ghost kitchen portfolio in Europe and the UK during 2020 alone.
The Power of Aggregation
Central to fueling the explosive growth of ghost kitchens was the rise of third-party delivery platforms facilitating online orders. Services like DoorDash, UberEats and GrubHub allowed these virtual brands to gain near-instant access to a massive customer base without incurring their own marketing costs. While many virtual brands still utilize their own websites and apps, most rely heavily on aggregators to win new customers.
Aggregators have also increasingly moved into the dark kitchen space themselves. DoorDash acquired virtual kitchen operator CloudKitchens in 2020, gaining valuable real estate and infrastructure for their partner brands. Uber followed suit with an acquisition of virtual kitchen company Chowbotics in 2021. By owning the kitchen facilities, these companies are able to provide turnkey solutions for new brands coming onboard—from permitting and equipment to delivery driver partnerships—removing many barriers to entry. With access to their vast customer bases and operational know-how, aggregated platforms have become major enablers of the ghost kitchen boom.
The Future is Bright for US Dark Kitchens, Ghost Kitchens, and Cloud Kitchens Market
While concerns linger around oversaturation as more and more virtual brands crowd online marketplaces, industry analysts remain bullish on the long-term potential of the concept. Technomic forecasts the US ghost kitchen market reaching $1 trillion in annual sales by 2030. Customers have demonstrated a willingness to order from these digital-only brands, with some analysts suggesting off-premises sales may permanently remain elevated even as dine-in rebounds from pandemic lows.
Successful virtual brands are also proving nimble in iterations like expanding into brick-and-mortar locations. The model's low costs create opportunities to experiment with new concepts faster than traditional openings. Multi-brand operators continue growing their portfolios within shared kitchen hubs as well. And aggregators are still diversifying with new innovations like delivery-only grocery and convenience brands.
While debate continues around predatory pricing strategies and labor concerns in some shared facilities, the overall flexibility, low costs, and access to vast customer pools offered by the ghost kitchen model suggest it is still very much in the early innings of disruption. Newer entrants are innovating too with concepts like sustainable virtual brands and delivery-native fine dining experiences. All signs point to virtual restaurants remaining a dominant force shaping the future of the food industry for years to come.
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