The global digital food delivery market size is expected to reach $369.97 billion by 2030. Yes, you read that right. $369.97 billion.
The good news is that there are ways to jump on the food-delivery bandwagon — even if you already have a dine-in restaurant.
The answer? Launching a virtual brand.
Virtual brands are an easy way to tap into the food delivery market (worth a whopping £10.4 billion in 2021). Simply put, it’s a low-risk, low-cost way to increase restaurant revenue, orders and profits for your kitchen.
In this article, we’ll explain the meaning of a virtual kitchen, how a virtual brand works, and 7 reasons you should consider launching your own virtual food brand.
What are virtual kitchens?
A virtual kitchen (also known as a virtual brand) is a restaurant that’s only available on delivery platforms such as Just Eat, Uber Eats and Deliveroo. No bricks-and-mortar restaurant, all you need is a commercial kitchen to produce the food and you can start delivering to customers.
Virtual kitchens aren’t just limited to restaurants, pubs, and hotels. In fact, at Peckwater Brands, we work with a variety of businesses throughout the hospitality sector to bring their virtual kitchen brands to life. From cafes and bakeries to takeaways and pubs — anyone with a commercial kitchen can transform their business and launch a virtual brand.
7 reasons why you need a virtual brand
If you’re asking yourself, ‘what is the point of a virtual brand?’, we’ve got the answer. Actually, we’ve got 7 answers.
Keep reading to find out how your business can benefit from launching a virtual brand, and why working with a delivery franchise partner like Peckwater Brands is a good idea.
1. To diversify your income
Virtual brands give you additional streams of revenue. You receive extra orders through online delivery, and therefore extra income on top of your existing restaurant business. It’s a great way to diversify your income and improve your cash flow.
Extra income also means more money to reinvest in your business. You can provide staff benefits, increase wages, source new ingredients — all of which improves staff morale and enhances the quality of your food. It’s a win-win.
It provides your customers with a better experience, too. They get to interact with happy servers and they get better food.
2. To make the most of your existing tools and talent
The average commercial kitchen in the UK operates at 70% capacity. So what’s happening with the other 30%?
More often than not, it’s not being used.
But with a virtual food brand, you can maximise your capacity while your overheads, space, staff and equipment costs stay the same. You don’t need any additional space, equipment, or people to make it happen. It’s essentially an add-on to your existing operations.
And if you work with a delivery franchise partner (like us — hi 👋), you don’t have to worry about creating a menu, training your staff, or launching your service online. We take care of everything for you.
3. To grow your restaurant business without huge costs
Virtual restaurant brands operate from your existing kitchen. You don’t need to purchase new equipment, add new fittings to your restaurant, or hire new staff. As a result, startup costs are pretty low.
When you think about the return you can get from a virtual brand, the minimal start-up costs are undoubtedly worth it. For example, our partners earn between £12,103 and £39,823 per month and increase their gross margin by an average of +9% from running a virtual kitchen.
4. To expand your customer base
Food delivery helps you reach a wider customer base. On top of customers that are already coming into your restaurant, you’ll also reach more eaters in your local area that want to eat at home.
In other words, a virtual kitchen helps you reach customers that you wouldn’t reach otherwise.
We should add that increasing your customer base with online delivery shouldn’t impact your amount of dine-in customers. In fact, there’s no direct competition between customers ordering online and customers eating on-site.
If someone’s thinking about getting a takeaway, chances are they’re weighing it up alongside whether to cook at home — not whether to eat out.
Companies that work with Peckwater see an average increase in delivery orders by +823%. However, this doesn’t impact the number of customers coming into their premises to order food. It’s on top of their dine-in customers, not instead of.
There’s really nothing to lose by running a virtual food brand, but there’s a lot to gain (like revenue, profits, and orders)!
5. To reduce food waste
The UNEP Food Waste Index Report found that around 931 million tonnes of food was wasted in 2019. 26% of this waste came from the food service industry.
Another study from the Waste and Resources Action Programme (WRAP) estimates that 9.5 million tonnes of food was wasted in the UK in 2019. Of that, the hospitality sector generated around 2 million tonnes.
So it’s safe to say that food waste is a problem for the hospitality industry. It’s bad for the environment, and it’s bad for business (it means you’re wasting money on ingredients you don’t use). Fortunately, virtual brands can help you reduce food waste.
Instead of throwing away unused food, you can use these ingredients to create meals for your virtual kitchen. That way, you don’t have to throw away as much food and you can use it to increase your revenue.
Food waste is also something we consider when designing menus for our partners. We make sure to utilise ingredients you already have in your kitchen. We also use under 50 SKUs (including packaging) to minimise waste.
6. To get better customer insights
Successfully launching a virtual kitchen requires some understanding of what online customers want to eat. Simply put, you need to know what they’re looking for so you can make food they want to order.
This is where we can help.
We analyse local data and insight to develop easy-to-make menus based on what customers are ordering in your area.
But as we all know, customer needs can change at short notice and without warning. With a virtual kitchen, this problem is easier to manage. You can track your orders in real-time to see what’s working and what’s not. Based on this data, you can understand more about your costumes and deliver exactly what they want.
7. To access dedicated support
When launching a virtual kitchen, using a delivery franchise partner like Peckwater makes the process easier to manage. You’ll have an expert on hand to manage the entire process and guide you in the right direction.
We'll design the menus, provide virtual branding solutions, and train your staff on how to cook the food and be up and running in just 14 days. After launch, you’ll also have a dedicated Account Manager in your area to answer questions and make sure your virtual brands are performing well and bringing in additional profits.
Work with Peckwater Brands to bring your virtual kitchen to life
Virtual brands are still a pretty new concept. They’ve spiked a lot of interest over the last couple of years, but they’re more than just a hospitality trend.
Virtual are here to stay. They're a great way to diversify your revenue streams, maximise your capacity, and reach new customers.
To boost your income and launch your virtual kitchen franchise, book a quick 15-minute call with the team at Peckwater Brands. Our virtual branding agency sets you up to run a delivery franchise from your existing kitchen in as little as 14 days.