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How 'ghost kitchens' are changing Denver's restaurant scene

Posted at 10:24 PM, Nov 11, 2019
and last updated 2019-11-13 11:59:46-05

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DENVER -- These days, it's all about convenience.

No time for the grocery store or eating out — you can have both delivered, in a matter of hours, with the touch of a smartphone and third-party delivery app.

"Fewer people are dining out and they are delivering in more," said Next Bite Chief Operating Officer Jenn Hire.

Younger generations are proving they're willing to pay more for that convenience, and local restaurants, as well as start-ups, are trying to tap into the trend by creating "ghost kitchens" or "virtual restaurants."

As third-party food delivery apps are reshaping the industry and the way we eat, ghost kitchens are an evolution of the restaurant model.

Think of it like digital culinary, where there's no need for a dining room or wait staff, all they need is a kitchen, or even part of one. The food is made for delivery only.

"A ghost kitchen is basically a restaurant without a store front," explained Hire. "We exist on the delivery apps so Uber Eats, Postmates, Door Dash."

Virtual restaurants are a way for restaurants to manage the demand for deliver with lower rent and labor costs, but what that model looks like is also evolving.

Denver restaurant creates sub-brand for delivery only

Sean Huggard owns Blue Island Oyster Bar in Cherry Creek.

An upscale seafood restaurant came first, with a sub-brand that followed solely to appease the millennial delivery crowd.

"We created the Denver Lobster Shop," explained Huggard. "Just take a few of the items on the menu – like the lobster roll, the clam chowder and the fish and chips."

When it comes to the new world of take-home food, high-end restaurants are struggling to decide if delivery is worth it.

"If the delivery driver takes over an hour to get to you and it's overcooked and your fries are soggy, they're looking at your restaurant going, 'Oh that restaurant's not very good,'" he said.

Huggard said by creating the Denver Lobster Shop, he can still cash in on the delivery trend, but better control which foods are on the menu: Items that he knows will travel well and live up to his brand.

"We got this excess kitchen space, we've already got employees in the restaurant. Let's create some concepts almost off food trucks," he said.

So far, Huggard calls his take a success, but across tow,n Denver-based startup Next Bite is trying to turn ghost kitchens into a business.

Denver start-up has its own take on ghost kitchens

"Next Bite creates fully branded restaurant concepts for delivery only," explained Hire, the company's Chief Operating Officer.

Hire said Next Bite works with traditional restaurants to set up delivery-only kitchens, using its chef-driven concepts.

"We provide them a turn-key solution to just turn on a restaurant really easy," she said.

Next Bite currently runs three different menu concepts out of one restaurant kitchen in Southeast Denver -- but for delivery only.

"We are a restaurant, we are the creators of each of these concepts: Mother Clucker, Monster Mac, Grilled Cheese Society," explained Hire.

The company sees their model as a way for struggling restaurants to make extra money. Think of it like a side hustle, where on top of serving their in-house guests, Next Bite helps owners use their existing kitchen space and employees to start making its own delivery-only concepts.

"They can turn on any of our restaurant concepts and instantly generate additional revenue," Hire said.

She views ghost kitchens as the future of take-home food.

"Let's be a solution for restaurants where they can open them up for us," Hire explained.

Colorado Restaurant Association says adapting is the name of the game

"Restaurants are doing whatever they can to stay viable," said CEO and President of the Colorado Restaurant Association, Sonia Riggs.

They view ghost kitchens as a way for restaurants to have more control over delivery.

"If you're a chef, I mean, it's your reputation on the line," she said.

Especially in a world where Riggs said third-party food delivery apps have been known to put a restaurant's menu up on their app, without their permission.

"Some restaurants don't even know a third-party delivery company is delivering their food," she said.

Riggs said take-home food does come with a host of challenges for restaurant owners, but with the growing demand for deliver, restaurants are having to evolve to stay in businesses.

"It's the convenience factor, people are paying for that convenience," she said.