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Dark kitchens are taking over the food delivery industry.  

Now that we’re living in the new normal due to the Covid-19 pandemic, Dark Kitchens are receiving a lot of praise. While this may be viewed as a foreign concept, Dark Kitchens are growing in popularity within the restaurant industry. Frequent users of online food delivery apps may be more familiar with the concept of Dark Kitchens, which are essentially restaurants that operate exclusively in the online space without a brick-and-mortar-sit-down establishment.

How do Dark Kitchens operate and what role do they play in the hospitality sector and takeaway services?

Dark Kitchens are quality kitchen areas that only deliver food online. Unlike normal eateries, they can accommodate multiple organisations in the same space. This allows for massive savings on start-up costs and sharing the daily operating costs which decreases overall expenses.  It’s easier to start your own kitchen compared to traditional eateries, where the investment is projected to be in the region of R100 000 to get one off the ground. You get to avoid costs such as seats and tabling or even interior marketing. The only necessities are an operational cooking space and food that tastes great.

The City’s more well-known dark kitchens include Darth Kitchen and EATER.co.za. In 2019 Darth Kitchen was formed by the co-owner of OrderIn, Mr. Heini Booysen. Now he runs a dark kitchen on Orphan Street in the CBD that hosts seven restaurants including Buddy’s Burgers, Anvil Burger Co, Ringo Pizzeria, and Fluent.

Eater.co.za was founded in 2019, they also boast several eateries such as Burger Boss, Poke Panda, and Firebirds.

KEEPING IT SIMPLE

Like more traditional eating establishments, success hangs on two things: where you’re situated and the food you sell. The kitchen’s location is crucial for transporting food, the more populated the area the more people you can deliver to. You could miss the opportunity to reach new customers if you are not situated in the correct place. Many of the City’s dark kitchens have set up locations in the CBD, which allows them to reach consumers nearby and up the Atlantic Seaboard reaching places like Salt River and Upper Woodstock.

Your food offering must stand out as the fast-food delivery industry mimics the popular trends. The market tends to get flooded with similar products within a short timeframe, like the fried chicken burger trend that has everyone’s attention.  Now you must make your food as good as possible and ensure that it’s delivered on time and wrapped in good packaging to impress consumers.

THE CHALLENGE

The opportunity to own a dark kitchen is ideal for businesspeople as the customer does not walk into the store, you get to share daily costs which boost profits, and your product offerings can be minimised. The downside, however, is that the service is entirely dependent on delivery apps such as UberEats and Mr. D to survive where a service usage fee can cut into profits.  As such the takeaway industry currently has low profits, where up to 30% of service usage fees can turn a successful purchase into a negative cost. Apps like UberEats and Mr. D need dark kitchens to have more consumers on their sites, but they still determine their fee knowing that they take fewer risks by doing deliveries only.

WHAT THE FUTURE HOLDS

The growth in dark kitchens shows a rising subsector of the hospitality industry with there being growing interest from app investors and other financiers.

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