Virtual brands are one of the most talked-about trends in hospitality. In the last few years, online-only restaurants and ghost kitchens (or dark kitchens) have become a regular feature on food-delivery platforms around the world.
In fact, Statista predicts that up to 22.3 million consumers will use restaurant-to-delivery by 2023, as well as 12.7 million in terms of platform-to-consumer delivery.
But what exactly is a virtual brand, and how do they work?
In this article, we’ll explore the rising popularity of the virtual brand in more detail. By the end, you’ll have a good idea of how a virtual kitchen works, the benefits of launching a virtual brand in your own kitchen, and why working with a franchise partner like Peckwater (that’s us - hi!) can be helpful.
What is a virtual brand?
A virtual brand is a restaurant that operates exclusively online, typically through third-party delivery platforms like Deliveroo and Grubhub. It allows kitchen operators to maximise their capacity, reduce food waste, and increase their income.
Here’s how it works: you offer a menu, complete with a restaurant brand and identity, but without the overhead cost of running an in-house dining space. Using an online-delivery platform, your menu reaches thousands of local customers without having to spend a penny on more equipment or staff.
It sounds great, right? That’s because it is. And that’s why kitchen operators around the world are joining the trend.
What’s the point of virtual restaurant brands?
Integrating virtual food brands into your business’s operations can do a lot more than just increase order volumes. Here are some of the ways that virtual brands can add value to businesses beyond increasing restaurant revenue.
- To increase income with little risk. Virtual food brands can deliver a lot of value to hospitality businesses with very little risk. There's no need to find a bigger premises, buy new equipment, or hire new staff. Instead, a virtual brand blends into your existing operations to help you fully-utilise your kitchen capacity.
- To keep costs low. A virtual brand also gives kitchen operators the chance to test the water with minimal upfront costs - something which is particularly helpful for small or independent kitchens.
- To reach a wider audience. An online-online brand helps businesses reach a wider pool of customers in their local area. As a result, they’re more likely to get more orders and increase their income.
Are virtual restaurants profitable?
Whether starting up a new online-only food brand or integrating an existing one into a kitchen’s operations, virtual brands have proven to be highly profitable. Our partners report additional revenues of between £12,103 - £57,687 after adopting one or more of our virtual brands.
Take a look at our case studies to see how much you could make from launching a virtual brand!
But why are virtual brands so profitable?
The answer is simple: they require low upfront costs and minimal changes to your existing operations.
Think about it. Instead of launching an entirely new enterprise, a virtual brand slips into your existing operations. It helps you maximise your capacity without having to expand.
What are the other benefits of virtual brands?
Let’s take a look at some of the other ways a virtual restaurant brand can transform a dine-in business.
- Improve efficiency. A virtual food brand forces you to streamline your kitchen operations. Why? Because you have to work efficiently to deliver orders online and in-house! It leads to a leaner, streamlined business that makes better use of its own capacity.
- Maximise resources. Running multiple brands from the same facility makes better use of the available resources. You can use the same equipment to prepare in-house food as well as meals for delivery - it’s a win-win! And by aligning your in-house operations with a virtual brand, supply costs are shared meaning that combined overheads are reduced.
- Gather customer data. In the hustle and bustle of a busy dining room, it takes a lot of effort to gather and quantify the data that a food-delivery app can collect and analyse easily. With this information, you can get a better understanding of customer behaviour, including patterns of ordering and customer profiles - all of which is valuable for planning menus, advertising, and launching new dishes.
- Provide a wider variety of food choices. The menu of virtual food brands provides consumers with more great-tasting, high-quality food options at competitive prices. Take a look at some of our virtual brands to see for yourself!
Host kitchens, cloud kitchens, and ghost kitchens: What does it all mean
If you’re working in the hospitality industry you might be familiar with host kitchens, cloud kitchens, and ghost kitchens. What you might not know is the differences between them (and how they’re different from virtual brands).
Let’s find out.
- Ghost kitchen. Unlike a virtual kitchen, a ghost kitchen isn't part of a regular kitchen operation. They create an online menu, but instead of operating from a brick-and-mortar location, they make their dishes in a kitchen that isn’t open to the public. It’s the original ‘delivery-only’ concept.
- Cloud kitchen. Cloud kitchens are delivery-only restaurant concepts that franchise their brand and menu to other kitchens. In other words, they use the concept of a ghost kitchen for franchising.
- Host kitchen. A host kitchen is a commercial kitchen that makes its own food for dine-in customers, but also acts as a ghost kitchen for another brand. A host kitchen will use its existing staff and equipment to produce food for a completely separate brand but this food will be delivery-only. The second brand will only be available on delivery platforms such as UberEats, Deliveroo, JustEat.
Similarly to a host kitchen, a virtual brand operates out of an existing kitchen operation.
However, a virtual brand also involves creating branding and menus based on local customer insights.
What are some examples of virtual restaurants?
Take a look at some real-life examples of our virtual brands in action.
Online-only restaurant brands on Deliveroo, JustEat and UberEats
First, we’ll take a look at our virtual brands on UK food-delivery platforms such as Deliveroo, JustEat and UberEats.
The Seoul Chikin virtual food brand combines classic Korean-fried chicken with sticky, spicy sauces and authentic Korean flavours.
Some of our favourite items from the Seoul Chikin menu include the Korean BBQ Crispy Burger, the crispy Korean Chicken Tenders (served with a dipping sauce of the customer's choice), and the loaded K-Buffalo Fries.
Fiesta Mexico brings the joy of Mexican party food to customers in your local area! The menu features a selection of vibrant, classic Mexican dishes alongside healthier (but still delicious) burrito bowls.
Papi Taco adds a modern twist on classic Mexican dishes, including burritos, rice bowls, and tacos. The menu also includes a super cheesy queso dip that your customers will want to put on everything!
Online-only restaurant brands on DoorDash and GrubHub
Now, let’s take a look at one of our most popular virtual food brands in the US.
Flight Risk brings the classic flavours of American-fried chicken to customers across the US. Featuring triple-breaded chicken fillets, burgers, and wings, this virtual brand hits the spot when it comes to delivering comfort food.
Our repertoire of virtual brands is still growing. We recently acquired the Honest Food Company to add new brands to our offering and increase our presence across Europe!
Taking ingredients and meals from the kitchen to consumers is our passion. By acquiring more brands, we’re able to offer more options for the businesses we work with.
How do I start a virtual kitchen?
To launch a virtual brand, all you need is a kitchen and some folk to do the cooking. There’s no need to hire additional staff, to rent a second facility, or to increase your dining space.
You also need to decide which type of food to create. Are you thinking classic American burgers or delicious stone-baked pizzas? Whatever it is, choose your food style carefully. It should align with your current list of ingredients so you can fully utilise what you already have!
With a food style in mind, you can now create an online menu. These menus should appeal to your local customers and work alongside your existing restaurant operations.
This is where Peckwater Brands can help.
Our team provides everything you need to launch your virtual kitchen. We’ll produce the menu, create the branding, design the packaging, and can train your staff remotely or in-person to prepare the food.
Next on the list is choosing your third-party delivery platforms. These platforms allow brands to sell and deliver food online without having to set everything up from scratch.
They’ll handle the payments and connect you to a delivery driver that will zip the food over to your hungry customers. In the UK, common third-party food delivery companies include JustEat, UberEats, and Deliveroo.
Finally, you need to think about developing your brand’s voice and digital reputation. There’s fierce competition on delivery platforms, so you need to think about how you can stand out from the crowd and grab the attention of your local customers.
Fortunately, a franchising partner like Peckwater (hi there 👋) can take care of high-quality branding. We use data-driven insights to identify the right type of branding for your target audience.
What does the future look like for virtual brands?
Virtual food brands aren’t going anywhere. They’re helping kitchen operators to reduce food waste, maximise their capacity, and increase their revenue.
If you’re operating a kitchen of any kind and want to launch a virtual brand, get in touch with the team at Peckwater. We can talk you through the process and help you find a virtual brand that’s ideally suited to your existing operations!