"a pat on the back and a bajillion dollars" | spooky kitchens #42

Happy weekend y’all,

First thing’s first: Happy postponement season everyone! Here’s to all the deals, meetings, and works of importance getting pushed past the new year 🍻

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

So what happened this week? (TL;DR)

• Kitopi cut staff, the internet opened another uber-mediocre restaurant, and the delivery wars visibly cooled.

a heart full of sides

☹️ The dependable Kitopi cuts a chunk of corporate staff (“Dubai unicorn Kitopi sacks 93 head office staff as tech industry slumps” Matthew Amlot & Sharon Benjamin, Arabian Business). It’s no secret at this point that tech companies are, as a unit, slimming down, though it remains an unfortunate reality that the first play in everyone’s book for hunkering down is cutting staff. I understand that there’s a responsibility to shareholders during tumultuous times; as well as an expectation to utilize whatever means necessary to keep revenue (and ideally, profits) buoyant that, if defied, yields at best a verbal tirade from The Board and at worst the replacement of the highest-ups in an organization.

But there’s a loud part of me that wishes investors would grow a thicker skin (anything thicker than the thinnest, at least) – especially in circumstances like we’re seeing now, where real consumer behaviors have yet to visibly shift and layoffs are triggered by the mere sentimental prediction of a future downturn. Cutting significant percentages of staff has become a reflex in tech; a knee-jerk reaction to practically any headwind. It’s quick, it’s relatively simple, it’s an effective blunt instrument, that’s true. It also dampens morale, creates company-wide tension, hamstrings the remaining team and drives burnout in more extreme situations. Fewer hands with the same amount of work in a more volatile time is clearly an equation for success.

Anyway, among ghost kitchens Kitopi has often seemed like a fairly solid company; not the most resounding compliment, but in a field that includes CloudKitchens and REEF, I might as well be presenting them with a statue of a golden man wielding a chef’s knife and a delivery bag. All to say that Kitopi’s layoffs look to me like a clearer indicator that this tech slump is global, comprehensive, and probably unavoidable.

💸 A History of DoorDash, Part I (“How DoorDash became the dominant US food delivery company” Julie Littman, Restaurant Dive). If you’re newer to this corner of the food tech industry, or just never quite knew the journey of DoorDash’s rise to the top of our once-five, once-four, now-three step delivery ladder (RIP independent Postmates & Caviar), this article’s a good starting point. But it’s not really what I want to talk about.

No, instead I want to talk about Oren’s Hummus, which the article introduces as the quintessential Silicon Valley restaurant; that is, one owned by the partner of a known VC angel investor that is half-restaurant, half slaughterhouse for anyone in Palo Alto with a “next big idea.” They were the first to discover DoorDash yada yada yada blah blah blah, give ‘em a pat on the back and a bajillion dollars for their good eye. But could you imagine what a nightmare that place would be to work at? Just, dorks acting like bros in alternating Patagonia vests, Stanford sweaters, and the occasional track suit constantly marching up to the counter demanding a chance to talk to the owner to make their pitch; and if they do order anything (which I would not take for granted) you know that crowd’s not tipping heavy. You know. Ick.

I do kind of want to go now, though? 🤷

🤔 Let's break down this city-vs-city delivery study (“The Most Expensive Cities for Food Delivery in the U.S.” Report, Self.io). This study compares the end cost of an identical McDonald’s order, for delivery, to locations at similar distances (about 2.5 miles from the restaurant), in the metro centers (downtown-ish areas) of 100 US cities. What it finds in city-to-city comparison is nominally interesting and confirming, if not totally surprising — Seattle is very expensive for delivery (duh) and Lubbock, TX is very cheap (double duh) — but its findings comparing the delivery services are more illuminating.

Basically, our three intrepid, enduring delivery service providers are…pretty equal, all things considered. Which sounds like a triple duh, but is actually in itself, interesting.

While it’s shown that Uber is clearly the most expensive delivery provider, it isn’t all that much more expensive. Mostly, looking at the included charts, it’s clear that we’ve reached some standards between the Big 3 after years of price competition and changing fee strategies. Both “service” and “delivery” fees are now ubiquitous (they weren’t always). Ticket totals between the three options differ by less than a dollar. And obviously, all three offer McDonald’s on their platforms; which speaks also to the long-settled, inevitable yet ultimately pointless battles for chain brand exclusivity. The delivery wars appear to have become regular, boring old economic competition.

Some pricing tweaks are still developing – DoorDash has added an “Extended Range Fee” for orders over 3 miles driving distance, for example. But the overall chilling of the once-hot delivery competition may point to a lesser sense of desperation from the 3PDs, maybe leaning on the apparent inelasticity of delivery demand. Or perhaps, they’re realizing that they’re going to have to look beyond pricing and the core restaurant delivery offering (e.g. alcohol, pharmacy, grocery, c-store) to achieve that ever-elusive profitability.

👏 Hey look it's ezCater (“29 foodtech power players of 2022 revolutionizing how restaurants operate and deliver amid a looming recession” Nancy Luna, Business Insider). This is a nice list for catching up on influential voices in restaurant tech; but mainly I’m just happy to see Stephania Mallet included, and ezCater back on its feet after being so severely impacted by the pandemic (even in comparison to the restaurant industry as a whole). They’re a solid company helping restaurants capitalize on what is still the most-underappreciated revenue channel: catering. Glad they found a way through the last few years.

🤢 The internet needs to stop opening restaurants (“Internet culture seeps into restaurants” Kristen Hawley, Expedite). From the new Doughbrik’s Pizza to MrBeast Burger to the Bored Ape Yacht Club burger joint, web-celebs (cewebs?) just can’t stop opening restaurants. Mostly mediocre-to-bad restaurants, much like their celeb brethren (celebthren?) from other media (Pizzaoki, Another Wing, Mariah’s Cookies, etc). I mean, it doesn’t necessarily hurt anyone, and I think people generally know that the food is not the priority at these joints, it’s just like…UGH. Why? Do you really need a food connection to your insipid followers, Mr. “FameMasterClass.com?” Did you really need another outlet to prove to the world that having millions of dollars automatically breeds yet more millions of dollars, MrBeast? Did we really need a Bored Ape burger…well actually, that one I like. Because its reviews are abysmal, and NFTs are dead, and now I get to watch its death throes from the sidelines, eagerly awaiting the day my Google Alerts pick up the headline that “Bored & Hungry” has inescapably closed. But until that day…UGH.

Also, I’ve said it before and I’ll say it again: read Expedite. It’s a better, soberer, and broader view of restaurant tech than what you get in this here weird little corner.

🤖 Remy Robotics forecasts more automation, and autonomy, in the BOH (“Flipping Burgers Isn’t Enough: Where This Restaurant Robotics Executive Sees The Industry Moving” Grace Dickinson, Back Of House). We got a tease of Remy Robotics in The Spoon back in May, and here they are again. Comprehensive kitchen automation has gotten some play in the news recently, with Sweetgreen’s announcement of a new automated site powered by (the company formerly known as) Spyce’s bowl-centric tech. Remy’s offering is similar, though it promises more flexibility and speed in its deployment, and variety in the cuisines it offers. Like Spyce, Remy also runs its own dark kitchen brands (currently in Spain). Unlike Spyce, their kitchens are still open.

On the spectrum of food-making robotics, these full-scale concepts are a bit more intriguing to me than the Flippys of the world. They indicate another, perhaps inevitable addition to the restaurant industry – like ghost kitchens, a complementary new operational model rather than a replacement for existing models. Apparently, they’re about ready to make their debut.

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.

Thanks for reading spooky kitchens! Subscribe for free to receive new posts and support my work.