The Boom of Dark Kitchens
Dark kitchens have been getting a lot of publicity in the post-pandemic world. These elusive spaces seem hidden away but are actually something we’ve come to interact with more and more on a daily basis. If you’ve ordered takeaway via an app lately, you may already know what we’re referring to. It’s possible that you’ve been overwhelmed with choice, and have perhaps wondered, ‘is my location right?’ or ‘I’ve never seen these restaurants in my area.’’ You’re not wrong, you haven’t seen those places in your neighbourhood. They are indeed in your area though, they’re just hidden, servicing you via third party delivery apps.
Crush takes a deep dive into the world of dark kitchens and how they’ve become a major contributor to a growing, billion dollar food delivery industry.
What is a Dark Kitchen?
Dark kitchens are centralised production spaces that host restaurants, usually more than one, that purely rely on online orders and delivery. Unlike traditional restaurants, dark kitchens offer the opportunity to host multiple brands in one kitchen, which significantly lowers capital expenditure costs and allows brands to share overheads, such as rent and electricity, thereby significantly decreasing their operating expenditure.
The barrier to entry for dark kitchens is much lower than that of a brick and mortar restaurant, with the estimated cost to get one up and running being around R100 000. You don’t have to worry about seating and furniture or branding your store facade. All you need is a functioning kitchen, a good product and packaging and you’re good to go.
Some of Cape Town’s most popular dark kitchens include Darth Kitchen and EATER.co.za. Darth Kitchens was established in 2019 by the co-founder of OrderIn, Heini Booysen. Currently, they manage seven brands from one central kitchen on Orphan Street in Cape Town’s CBD. Brands like Buddy’s Burgers, Anvil Burger Co, Ringo’s Pizzeria and Fluent all operate under Darth Kitchen’s umbrella. EATER.co.za, established in 2018, also has seven partner brands, including Burger Boss, Poke Panda and Firebirds, to name a few.
Many of you probably weren’t aware that most of the new delivery options you’re seeing on your chosen delivery app are operated by one of a few holding companies.
Tricks of the Trade
Similarly to restaurants, the success of dark kitchens depends on two factors – location and product. Location is everything, as third party delivery apps only deliver within a certain radius of the pick-up point. If you’re not positioned in an area that can service as many residential blocks as possible, you’ll lose out on potential customers. Most dark kitchens in Cape Town are situated in the CBD, as they can service suburbs in town, as well as the Atlantic Seaboard and some even get to Salt River and Upper Woodstock.
Secondly, the product has to be outstanding. Food trends take shape quickly in the delivery sphere and the market can get saturated in the space of a few months. For example, fried chicken burgers are all the rage at the moment. There are countless fried chicken joints popping up on delivery apps and there seems to be a new one every week! To make sure you stand out from the crowd, your product has to be tasty and it has to deliver well. Good, sturdy packaging is key and makes an impression on customers.
Dark kitchens seem like a business owner’s dream — they aren’t customer facing, you’re sharing the overheads, which increases your margins and you can get by with a small menu. What’s the catch? Sadly, dark kitchens have only become so popular, because third party food delivery apps, like UberEats and Mr D keep them going and these apps can charge up to 30% commission.
The food and beverage industry already has incredibly small margins, so a 30% commission is the difference between a profit and a loss. Third party delivery apps rely on dark kitchens as they provide more traffic to their platforms, but unfortunately the apps are able to dictate commissions as they know that outsourcing delivery is much easier and less risky.
Some dark kitchens are working on providing their own delivery services; this will allow them to be in control of the entire process from production to delivery and they are also able to save a lot by cutting out commission costs.
The Future of Takeout
Dark kitchens are growing from strength to strength. The model is still relatively new and it’s already caught the attention of Silicon Valley and other major investors. COVID-19 has made food delivery commonplace and has even forced non-traditional delivery restaurants, like fine-dining establishments, to pivot towards making their menu delivery-friendly. As much as people miss a traditional dining experience, it’s in restaurants’ best interest to move towards a more hybrid model in order to safeguard their futures.
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