As the Pandemic Recedes, Ghost Kitchens Are Here to Stay

Due to restrictions associated with the COVID-19 pandemic, many businesses had to re-evaluate their business models, and restaurant owners were no exception. While it may seem like a Halloween season gimmick, ghost kitchens existed as businesses prior to the pandemic but recently became a necessity for those restaurants that hoped to continue operating once in-person dining was curtailed.

Ghost kitchens, also referred to as cloud or virtual kitchens, generally refer to spaces that are equipped to prepare meals for one or more delivery-only restaurants. This blog describes this concept, taking a deeper dive into one action planners can take during the extended pandemic, which was the subject of the MRSC blog Six Suggested Actions for Planners during the Extended COVID-19 Pandemic earlier this year.

What Is a Ghost Kitchen? 

In many ways, ghost kitchens mirror standard commercial kitchens, as they include the same types of equipment used for food preparation. However, they are different than most commercial kitchens in that they typically don’t offer dine-in services and only fulfill online orders, sometimes helping traditional, dine-in establishments meet rising demand, particularly during the pandemic. 

Many restaurants and startups have pursued this model to increase efficiency and reduce rent and labor costs. Some ghost kitchens prepare one or more types of food for one business, while others include leases for one or more established or new restaurants. Similar to how Seattle residents will soon be able to access this fried chicken sandwich, customers use third-party delivery apps such as Uber Eats, DoorDash, and Grubhub to access and order food prepared at ghost kitchens.

Considerations for Local Governments 

Many jurisdictions may, unknowingly, already include ghost kitchens, and others can expect to see them popping up in area neighborhoods in the coming months and years. As with any emerging issue, local governments have a role to play in assessing new concepts that may have an impact on their communities. 

Definitions of kitchens that prepare food for service elsewhere can vary in both kitchen type and requirements by state and jurisdiction. A city or county zoning code may define similar uses, such as commercial kitchens and shared-use kitchens, but these uses may not encompass ghost kitchens, which combine aspects of traditional commercial kitchens and delivery-only businesses. Another similar concept is commissary kitchens, which are often associated with mobile food vendors (i.e., food trucks). For example, the City of Yakima defines a commissary as an established commercial kitchen where mobile food vendors prepare and store food. This September 25, 2020 MRSC blog discusses small scale manufacturing, like commissary kitchens, and includes a reference to the Seattle Commissary Kitchen, a Seattle-based company with four locations that host over 40 local food producers. 

If a jurisdiction’s code does not address ghost kitchens or a similar concept, it could create a specific definition that would include a dependence on on-demand food couriers (e.g., Uber Eats) and off-site consumption of prepared meals.

Due to their late operating hours and greater number of pick-up or delivery vehicles than a traditional restaurant, ghost kitchens may be most appropriate for commercial or light industrial areas along transportation corridors. Some are located in shopping centers, as these sites often include suitable, underutilized space. As part of a pilot program, Miami, Florida does not allow “app-based meal production” in its central business district.

The most appropriate locations for ghost kitchens in a given community, however, will depend on consumer demand, whether the restaurant industry supports this concept, and other factors related to the local context. 

Food Safety Regulations 

Food establishments such as ghost kitchens are subject to state and local food safety regulations. The latest Washington State Retail Food Code: Chapter 246-215 includes new sections on mobile food unit commissary usage and exemption.

In King County, all food establishments must operate out of an approved facility located in the county and a commissary/shared kitchen agreement is required from the county health department if vendors are not the owner of the commissary or if they will be sharing kitchen facilities with other vendors. The agreement notes facility requirements such as supply storage, equipment cleaning, food preparation, and other servicing activities. 

Potential Issues

It’s important to note that some established restaurants may see ghost kitchens as unwelcomed competition, including those restaurants that have continued to operate in their existing spaces throughout the pandemic.

Conversions of standard dine-in restaurants to ghost kitchens with delivery-only options may also impact the street-level vibrancy of a walkable, mixed-use district, like historic downtowns. Prior to developing any regulations related to this use, communities should engage in conversations with the public, including restaurateurs.

A separate but related topic includes issues associated with third-party delivery services. The California Fair Food Delivery Act prohibits delivery companies from advertising local restaurants on their platforms without the restaurant’s permission, and Seattle and Bellingham recently passed ordinances with similar provisions. These ordinances often stem from restaurant complaints about this practice, which may result in increased kitchen traffic or unanticipated vendor fees. Some cities, like New York City, have also adopted legislation related to minimum pay and working conditions for employees of food delivery services. 

Conclusion

To the degree that consumers’ food delivery habits will continue after the COVID-19 pandemic subsides, ghost kitchens are a technology-driven initiative that could potentially encounter a boost as restaurants search for alternative delivery models to meet rising consumer demand.