Are you hungry for virtual restaurants? They’re hungry for your business.
You can’t sit down to eat at these places. There’s no dining room. Instead, the food gets delivered to you, hot and within minutes. It’s an online and app-based model of food service, which means food is just a click or finger swipe away, using your smartphone or computer.
Virtual restaurants, also known as ghost restaurants, have been popping up in cities around the country for the past couple of years. Now, the trend has hit Atlanta.
Jason Sheetz and William Sigley, partners with Succulent Hospitality, recently announced that they are opening a virtual restaurant in Sandy Springs. Sheetz and Sigley operate tapas restaurant Under the Cork Tree and seafood spot Hammocks Trading Co., both in Sandy Springs. When their new virtual restaurant project launches in March, three concepts will be housed together at a kitchen facility located at 7277 Roswell Road, adjacent to Hammock's. There will be Fatbacks, with a meat-and-three menu; burger and hot dog brand Top Bun; and Salad Hippie, supplying lettuce- and grain-based bowls for the health-minded.
Sheetz was attracted to the idea of virtual restaurants after witnessing challenges that restaurants face with delivery orders. “Third-party deliveries take 30 percent of the ticket,” he said, referring to food delivery service companies like UberEats, DoorDash, Grubhub and Postmates. Even though Fatbacks, Top Bun and Salad Hippie will rely on third-party delivery, Sheetz anticipates revenue increases because he won’t have the overhead costs, including waitstaff, that come with a sit-down, brick-and-mortar restaurant.
How will it work? Customers can go to the website of each of the brands (fatbacksonline.com is the only site that currently is functional), or to the umbrella site, succulenthospitality.com, which will have the menus of all three restaurant brands. "This allows the family to order from a virtual food court, if you will. I get a meat-and-three, my wife gets a salad or grain bowl, and my kids get burgers," Sheetz said.
Succulent Hospitality plans to operate daily from 11 a.m. until 10 p.m., and later on weekends. The delivery radius will be 5 to 6 miles from the kitchen facility in Sandy Springs, serving that community as well as clients in Dunwoody and Roswell.
If all goes well, Sheetz hopes to open other virtual restaurant hubs around the metro area. His eyes are set on eaters near Emory University, Georgia Tech and Kennesaw State. “They are ordering in all the time,” he said of this demographic.
Sheetz isn’t the only one with eyes geared toward hungry, time-pressed, tech-savvy college kids. Joining Succulent Hospitality in Atlanta’s burgeoning virtual restaurant world is Kitchen United. In late spring, the company will open a 15,000-square-foot space at 1236 Menlo Drive in west Midtown.
Founded in 2017, Kitchen United operates a facility in Pasadena, California, where the company is based, as well as one in Chicago. This spring, it will open kitchens in Atlanta and Columbus, Ohio.
Whereas Succulent Hospitality will own and operate brands under the restaurant group’s umbrella, Kitchen United adheres to a different food hub model: It brings together national, regional and local restaurant brands under one space, yet each one operates independently.
“Kitchen United builds the kitchen centers, and restaurants rent the space from us,” explained Kitchen United CEO Jim Collins.
Kitchen United researches the demographic surrounding its kitchen facilities and pays for the build-out, which makes it less capital-intensive for tenants. It also provides its restaurant partners with services that decrease operational costs, such as handling early-morning receiving and sterilizing the kitchen facility nightly.
When Kitchen United debuts in mid-May, Collins expects to house 10 restaurant partners under the same roof. Combined, these dining brands will offer a cross-section of cuisines, with lunch menu items averaging $8-15, and $10-20 for dinner.
Customers will be able to order online via the Kitchen United website, as well as through the website of each particular restaurant, or through their preferred delivery service app. “The point: let the customer order how they want to order,” Collins said.
Delivery service will be within 3 to 5 miles of the Midtown kitchen facility. Patrons also will be able to pick up takeout orders at the Midtown location.
The company plans to open 15 more locations around the country this year, and an additional 30 to 50 in 2020, including more hubs in Atlanta.
Chris Baggott has been on the virtual restaurant bandwagon since he co-founded ClusterTruck in 2016. He planned to bring the delivery-only kitchen to Atlanta last year, but efforts to pull 11 virtual food truck brands together stalled. Meanwhile, the company opened kitchens in other cities. Besides a flagship kitchen in Indianapolis that handles 800 orders a day, it currently operates spots in Columbus, Ohio; Kansas City; and Denver. Kitchens in Minneapolis and Cleveland will heat up in late spring. The company still is looking for locations in Atlanta, Baggott said.
Baggott’s background is in software. He co-founded the cloud marketing platform ExactTarget, which was bought by Salesforce.com for $2.5 billion. The entrepreneur then started cloud-based content marketing provider Compendium, later acquired by Oracle.
For Baggott, the key to ClusterTruck’s success is efficiency through software.
He explained that food arrives to the customer within 6 minutes of leaving the kitchen door, and that the company does not partner with third-party delivery partners, but instead contracts its own team of drivers.
“We want to control everything — from the consumer experience, to the driver experience to the kitchen experience. Everything is based on timing. How can we manage deliveries, so drivers can get multiple deliveries an hour? To do this, we make it more efficient using software,” he said, adding: “We think of ourselves as a software company first.”
“The system really works for the customer,” Baggott said. “We’re faster. People are getting restaurant-quality food. You have this huge variety. Everyone can get the kind of food they want. You don’t have to commit to a restaurant.”
More consumers than ever are using online food delivery. In a 2018 report, investment bank UBS estimated that global food delivery sales could rise an annual average of more than 20 percent, a jump from $35 billion to $365 billion by 2030.
Are tech-driven ghost restaurants destined to turn their brick-and-mortar counterparts into ghosts of the past? No, Sheetz said, but “the reality is, you’ll be able to get chef-inspired food where you want it.”
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