Should Your Clients Utilize Ghost Kitchens?

Posted on: June 23, 2021 by RMS Hospitality

The term “ghost kitchen” might have conjured up images of a haunted eatery in days past. In today’s increasingly digitized age, however, it means something entirely different. Ghost kitchens are facilities established to provide dishes for off-premises dining. They might be set up within an existing restaurant kitchen, an individual kitchen, or a specialized facility that is the base for multiple enterprises. If this is something your customers already do or intend to set up, a comprehensive restaurant insurance program should include provisions for ghost kitchens.

The Virtual Reality of Ghost Kitchens

Since the purpose of a ghost kitchen is to provide a location for food preparation and a base for delivery pickups, it is a brick-and-mortar location. However, it is linked to the concept of virtual restaurants. These are entirely digital creations that do not exist in a specific brick-and-mortar facility. The profits ghost kitchens bring in, however, are quite real.

Increasingly, people are choosing to order food for delivery rather than going out to dine-in restaurants. In this supply-demand economic model, therefore, the growth of these novel kitchens has expanded along with the growing affinity for virtual restaurants. As the landscape for restaurants changes rapidly, look to expand portfolio offerings and your restaurant insurance program to encompass ghost kitchens.

Getting Ghost Kitchens Noticed

Digital markets can become saturated quickly. Virtual restaurants and ghost kitchens can be simple to start and set up, given the right conditions and circumstances. Their owners, however, must find ways to navigate this crowded sector successfully. Many have found that one of two ways works well:

  • They create multiple brands across a variety of food categories that require the same ingredients; or
  • They set up numerous brands within the same category in an attempt to become dominant.

The idea is to keep costs low by using the same types of ingredients across multiple brands or categories to gain the widest possible share of the market. The hope is that people will notice the brand and food offerings with repeated exposure. By providing coverage for ghost kitchens in your restaurant insurance program, you are supplying forward-thinking clients with a valuable service.

Ghost Kitchens and the Future

Virtual restaurants and ghost kitchens are novel concepts that are currently successful. Nobody can predict what direction consumer preferences will take and how these conceptualized eateries may have to adapt in response. However, there is no denying that opportunities are here today. Enterprising restauranteurs are taking advantage of this trend that offers many possibilities at low overhead and operational costs. The right insurance package can give your clients the confidence to make sound attempts to crack this market and succeed, which is a delicious business for everyone.

About RMS Hospitality Group

At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom tailored solutions to meet any venue’s specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.

Posted in: Restaurant Insurance

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