"C-H-A-N-G-E" | spooky kitchens #38

Happy weekend y’all,

First thing’s first: 🎃. That’s all.

As a quick reminder, all green text is linked.* (*not always to anything important)

So what happened this week? (TL;DR)

• REEF abandoned, AI robots aren’t cooking your dinner, and Meituan signaled (potential) global ambitions.

all sides no entrees

👋 Bigger dominos start to fall for REEF (“Burger King, Popeyes, and Jack in the Box cut ties with ghost kitchen Reef as the SoftBank-backed startup continues to face operational issues” Nancy Luna, Insider). Really wish Dominos was in this group of restaurants so my little headline had a punchline, but alas, Dominos has always been too good for REEF (or any other ghost kitchen). Guess the punchline is just REEF itself, then. As per usual.

In this industry, national brands occupy a paradoxical position of being simultaneous trendsetters and old hats. When names like Burger King, Popeye’s, and Jack in the Box test some new innovation, it’s officially “a thing,” and other restaurants summon the confidence to innovate themselves. And when those same big restaurants leave a partner, the community notices that, too – and second guesses their own partnership.

Burger King, Popeye’s, and Jack in the Box cutting ties with REEF does not necessarily spell the end for the company — but it may finally be the G or E in C-H-A-N-G-E, of the kind that the company desperately needs. Its playbook, copied straight from Uber, DoorDash, Cloud, and every other scale-at-all-costs tech upstart, has driven it into a deep hole, not only in the public eye, but the industry eye as well. Possibly even financially, though we wouldn’t know that until after the collapse. And again, with this much money at stake, that outcome is unlikely.

So with restaurants growing hesitant (to put it nicely), where does that leave REEF’s customer base? Mainly in virtual brands, I think. The likes of MrBeast Burger, Just Wings, Another Wing, Mariah’s Cookies, etc. The entire Virtual Kitchen Company portfolio, that by their own admission hardly strives for quality or long-term success (but just might in the future). With such flaky partners, such consistently poor press, no recent victories, and more than its share of internal issues, REEF has a terrifically long climb ahead to surface from the hole it’s dug itself and regain the trust of the restaurants it needs to succeed.

🙄 AI robots are (extremely probably not) cooking your dinner (“A.I.-driven robots are cooking your dinner” Stephanie Cain, Fortune). This piece, in addition to a title that is the purest of clickbait, gives too much credit to the Nala Robotics CEO for kickstarting the modern BOH automation sector.

There’s not one mention of Flippy, Creator, or Spyce (RIP), important and publicly noted predecessors in BOH robotics — particularly the latter two, which like Nala’s “Pizzaiola” were also all-in-one systems. They may have lacked the “five senses” that Pizzaiola emulates (sure it does), but they composed entire meals from start to finish; and they were in operation at a time when Nala was just getting off the ground.

Are AI-powered robots secretly cooking a dinner you thought you were ordering from local human beings? Well, there are certainly more restaurants using robots today than there were a few years ago. Many more. But unless you’re ordering from White Castle (Flippy), Slice Factory (Pizzaiola), or Creator’s one and only location, your food is still being made by regular, old, creased, flawed, brain-powered human hands.

• Related: “RoboBurger secures $10M investment to support growth” (Julie Littman, Restaurant Dive). Speaking of Creator, and speaking (last issue) of “let’s try this again,” it’s autonomous burger-making concept 2.0!

• Related: God, if only delivery drivers stopped demanding tips, amirite?? (“Forget DoorDash. Robots could be the future of food delivery. And they don’t ask for tips.” Stefano Esposito, Chicago Sun-Times). As I’ve discussed before, the reasons that automation and robotics will make their way further into the restaurant industry can, and should, be articulated beyond the tired, careless, and thoughtless “they’re cheaper than people, haha” argument. Call me when you have a story that’s not about robots trundling around yet another college campus.

🧐 A kitchen to watch in South America (“Foodology’s cloud kitchen concept gains foothold across Latin America” Christine Hall, TechCrunch). Like other second-wave ghost kitchens Oomi and Hungry House (and OG kitchens like India’s Rebel Foods), Foodology develops its own brands and menus, purportedly based on data and surveys from the service areas around their locations (I say “purportedly” because this claim can often be hyperbolic). The company, with 20 locations to date across multiple countries in Latin America, just completed another fundraise to expand further. With this serious new $50M raise, they’re one worth keeping an eye on.

🤔 First Hong Kong, then the world for Meituan? (“Meituan plans take on Foodpanda and Deliveroo in Hong Kong amid slower mainland market growth: source” Ben Jiang, South China Morning Post). While the announcement explicitly concerns Meituan’s expansion to Hong Kong (due to souring economic conditions in mainland China stemming in part from the country’s ongoing, zero-tolerance Covid lockdowns), the article reads the move as a foothold from which to expand even further. That would be the biggest splash in the delivery pool in a long time, considering Meituan is one of the largest delivery companies in the world (if not the largest delivery company), so far entirely contained to mainland China. But its duopoly status (with Alibaba’s Ele.me, China’s other food deliverer) is as much a hindrance as a brag; Meituan hasn’t faced any serious competition in years, especially those scrappy games for share and attention when entering a new market.

It’s just Hong Kong, for now. But when Meituan does move outward, we’ll know it – you don’t run 50+ million orders per day with 690 million annual transacting users just to daintily dip your toe into new markets.

📈 Deliveroo adds another ME country to its roster (“Deliveroo has arrived in Qatar” Doha News Team, Doha News). That makes three countries in the flourishing food tech region for Deliveroo, alongside Kuwait and the UAE. No news on an Editions location, though Deliveroo seems (rightfully) picky with those in locations outside the UK. Though it’s been out of the excitement for a while, Deliveroo remains one of the larger international delivery and ghost kitchen operations, serving (in addition to those mentioned) Australia, Belgium, France, Hong Kong, Italy, Ireland, Netherlands, and Singapore.

🥵️ This. (“Off-Premise Sales Have Settled. That Should Impact Your Plans” Rich Shank, Restaurant Business). At a bare minimum, operators and techies alike should follow the broad advice of the title of the article. Off-premise sales are not headed to the moon; they’ve found their own orbit. For the last couple years, they’ve followed a shockingly predictable trajectory, flying high during the pandemic as necessity demanded, then dropping like a stone as the world reopened, and finally coasting into their current rhythm. There is still more off-premise business today than there was in yesteryears (as seen in the delightful chart in the article that no one will cite because the line is headed down), and it will remain a critical and indelible part of the market. It’s just on the same, irregular, unpredictable track as the rest of the restaurant business, and adjustments should be made accordingly.

Though to be honest, if you haven’t adjusted to these conditions already, you’re in deep sh**.

🤭 BurgerFi seen holding hands in public with GoPuff (“BurgerFi Opens 15th Gopuff Ghost Kitchen Location” Release, QSR Magazine). This relationship is official. In the release, BurgerFi states that it is still working to hit its goal of “30 Gopuff fulfillment centers across the country this year” — though with just 10 openings in the last 10 months, two and a half months left in the year, and 15 locations yet to go, that seems…ambitious. To say the absolute least. As per usual, the restaurant says their current stores “have seen success” with no specific metrics. So while this partnership is indeed growing, I think of it more as the scheduled fulfillment of a contract rather than any indication of unexpectedly great & growing success.

That’s spooky kitchens.

Boo ✌️,

Mitch

P.S. If you’re just jumping into ghost kitchens and want to learn more, check out my ghostly glossary and spooky kitchens ghost kitchen cheat sheet. They’re there to help make sense of this weird and wild west.

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