Welcome back to the deep dive. I want to, uh,
I want to start today by setting a scene. Okay.
It's a scene that I guarantee almost everyone
listening has, you know, has lived through. It
might have even happened to you last Friday night.
The universal Friday night dilemma. I know it
well. Exactly. Picture this. It's the end of
a long week. Your brain is just fried. The absolute
last thing you want to do is, like, chop an onion,
preheat an oven. Or wash a single dish. Oh, yeah.
You're done. You are so done. So you flop onto
the couch. You pull out your phone. You open
the app. DoorDash. Uber Eats. Grubhub. You know,
pick your poison. The modern foraging expedition.
Scrolling through the digital forest. Right.
And you're scrolling. And you're bored. So bored.
You're tired of the usual Thai place you order
from every single Tuesday. You had burgers on
Wednesday. You want something new. You want a
discovery. I want a discovery. And then suddenly
the algorithm blesses you. You see a logo you've
never seen before. The moment of hope. You see
a place called Pasquale's Pizza and Wings. Pasquale's.
Okay. It sounds quaint, doesn't it? Pasquale's.
It just sounds like a guy. I picture a guy with
a thick mustache, maybe a little flower on his
apron, you know, tossing dough in the air. Like
a classic local pizza joint. Totally. It sounds
like a family recipe passed down through generations.
The logo looks a little artisanal. Maybe it has
that, you know, wood -fired oven vibe. So you
think, hey. I want to support a local business.
Let's give Pasquale a shot. So you hit order.
Of course. I hit order. 30 minutes later, the
driver drops the bag at the door. I open the
box. The pizza is fine. It's just fine. It's
warm. It's cheesy. But there is something nagging
at me. It tastes vaguely familiar. Like a sense
of culinary deja vu. A taste you have experienced
in a past life, perhaps. Or a past birthday party.
Because, being the curious person I am, and frankly
a little suspicious because the crust tasted
exactly like cardboard, I decided to do a little
detective work. You went down the rabbit hole.
I did. I pull up Google Maps. I typed in the
address listed for this charming Pasquale's pizza.
I zoomed in on Street View, expecting to see
a cute little bistro with a checkered tablecloth
and maybe a Vespa parked out front. And what
did you see? I saw a giant beige box of a building
with a huge purple sign. I saw... A Chuck E.
Cheese. Welcome to the Masquerade. I remember
when I first found this out, I felt bamboozled.
Pasquale isn't a local chef. No, he is not. Pasquale
is the name of the animatronic drummer in the
Chuck E. Cheese robot band. That is absolutely
correct. Yeah. And that pizza wasn't made in
a wood -sired oven by a guy named Pasquale. It
was made in the exact same industrial conveyor
belt oven that is, at that very moment, churning
out pies for a six -year -old's birthday party.
right next to the ball pit this is what we are
diving in today this isn't just about chuck e
cheese trying to sell pizza to adults who would
be embarrassed to you know walk into their store
no this is the tip of a massive almost invisible
iceberg It really is. We are looking at the world
of virtual restaurants. And frankly, it is probably
the biggest shift in the economics of food since
the invention of the drive through. I would agree
with that. We have a stack of articles, market
research and exposés here that describe a world
where the restaurants you see on your phone.
they simply don't exist well not in the way you
think they do exactly not in the traditional
sense and it's a story about economics for sure
but as we dig into these sources it becomes a
story about psychology about technology and a
little bit of deception a lot of deception if
you ask me so today our mission is to pull back
the curtain on this entire ecosystem we're going
to look at the why Why are these big chains hiding
who they are? We're going to look at that. How
how does a kitchen in a basement pretending to
be five different restaurants actually, you know,
work? And then we're going to ask the big question.
Does it even matter if the burger tastes good?
Do you care if it came from a ghost? That is
the million dollar question. Exactly. So let's
start with the basics, because when I was reading
through the source material on this, I got hit
with a ton of buzzwords. Oh, yeah. There's a
lot of jargon. Virtual restaurants. Ghost kitchens,
cloud kitchens, dark kitchens. Are these all
just fancy marketing terms for delivery? Or is
there a real difference? They're often used interchangeably,
you know, in the media, but there are some. Important
nuances. Yeah. And understanding the names actually
helps you understand the entire business model.
Okay. So let's break them down. Let's start with
virtual restaurant. Okay. So a virtual restaurant
is the brand. It's the listing you see on the
app. So Pascuales. Pascuales is a perfect example
of a virtual restaurant. It exists virtually
on your screen, but it doesn't have a storefront
you can walk into. It's purely a digital storefront.
Okay. So Pascuales is the software. It's the
interface I'm interacting with. Precisely. Now,
ghost kitchen or cloud kitchen usually refers
to the hardware. It's the physical infrastructure
where that food is actually being cooked. The
actual kitchen. The kitchen itself, yeah. Cloud
kitchen is the one that really stuck out to me.
It sounds very Silicon Valley, like I'm going
to eat a sandwich that's made of data or something.
And that association is completely intentional.
The term is a direct nod. to cloud computing.
Oh, interesting. Think about it. How did the
internet used to work? If you wanted to launch
a website in, say, 1999, what did you have to
do? Oh, man. You had to buy a physical server,
a big... loud box. You had to have a room with
like special air conditioning to keep it from
overheating. Right. You had to hire an IT guy
to make sure the server didn't, you know, catch
fire. It was a whole production. Exactly. It
was incredibly expensive. It was CapEx heavy.
That's capital expenditure. Right. You had to
spend a massive amount of money before you could
make a single dime. Then a company like Amazon
Web Services, AWS comes along. Right. And they
said, look. we'll build the giant air -conditioned
server farms. You just rent a slice of our hard
drive from us. And now I can launch a website
for $10 a month. I don't need my own server room.
Exactly. Now, apply that exact same logic directly
to food. Historically, if you wanted to sell
a burger, what did you have to do? I had to lease
a building. Probably a five -year lease. I had
to buy tables, chairs, plates, silverware. All
of it. I had to hire waiters, a host, a busboy,
a bartender. I had to pay for a big expensive
sign out front so people would see me from the
street. That is your server room. All of that
is the heavy capex. A cloud kitchen is the AWS
of food. Ah, okay. I get it now. You don't need
the dining room. You don't need the waiters.
You don't need the sign. You just rent a spot
on the grill. So it's literally infrastructure
as a service, but the service is pad thai. That
is the perfect way to put it. You are renting
the capability to cook without all the baggage
and expense of a traditional restaurant. Okay.
But then we have this other term that I saw in
the sources, and it sounds a lot more sinister.
Dark kitchen. Yes. Dark kitchen. It sounds like
something out of a dystopian sci -fi novel. You
know, citizens report to the dark kitchen for
your daily nutrient paste. It does sound ominous.
I'll give you that. But the term dark in this
context, at least originally, just meant dark
to the street. What does that mean? It means
there are no lights on for the public because
the public isn't allowed in. If you walked past
one, you probably wouldn't even know it was a
restaurant. The windows might be frosted over.
There's no menu in the window, no happy hour
sign. It's invisible from the outside. Exactly.
But the sources we looked at, they hint that
dark has taken on a bit of a double meaning lately.
It has. And we will definitely get to the controversy
later on, the working conditions, the lack of
transparency. But initially, it just meant invisible.
It meant that the lights of the dining room were
off, but the kitchen inside was firing on all
cylinders. OK, so we know what they are. We have
the terminology down. But I really want to understand
the why, because I'm looking at these profit
margins in our notes here, and they are. They're
significant. Why is this exploding right now?
To understand why this is just blowing up. You
really have to understand the brutal economics
of a traditional restaurant. I've always heard
that restaurants are a terrible business. Just
a super high failure rate, razor -thin margins.
My parents always told me, don't open a restaurant
unless you really hate money. They're not wrong.
The margins are typically somewhere between 3
% to 5%, if you're lucky. That's nothing. It's
nothing. I mean, if you are running a very tight
ship and... The single biggest killer. The number
one cost. Let me guess. Rent? Real estate. Absolutely.
Because you have to be where the people are.
Right. If you want to sell expensive burgers
and have people sit down and eat them, you need
to be on Main Street. You need that corner location
with the big windows. You need foot traffic.
And the landlords, they know that. Oh, they know
that. And they charge a massive premium for that
visibility. You're paying for the eyeballs. You're
paying for the sidewalk. You are. Now imagine
you're a virtual restaurant. Do you need to be
on Main Street? No, because nobody is walking
in. There's no door to walk into. Exactly. The
only person who needs to find the door is the
delivery driver. And they have GPS. So where
do you put your kitchen? I guess anywhere. Literally
anywhere with a gas hookup and a roof. You put
it in the industrial park on the edge of town.
You put it in a basement. You put it in a converted
parking lot behind a gas station. You go wherever
the rent is dirt cheap. So your rent, your biggest
single cost, drops from, say, $10 ,000 a month
on Main Street to maybe $1 ,000 a month in the
dark location. At least. And then you strip away
the labor. No host, no waiters, no busboys, no
bartenders standing there polishing glasses.
You just need cooks. That's it. You just need
the people actually making the food. But here's
the kicker, and this is the part that really
stood out to me in the reading. The price of
the food doesn't drop. No, not at all. If I order
a burger from the fancy bistro on Main Street,
it's $15. If I order a burger from the ghost
kitchen in the basement next to the tire factory,
it's also $15. Because on the app, they look
exactly the same. The photos are just as glossy.
The description is just as delicious. You, the
consumer, you're paying for the idea of the restaurant,
not the physical reality of it. So the operator
is keeping that difference, that massive difference
in cost. That is pure profit arbitrage. It's
a brilliant efficiency play. The source material
we have mentions a facility in Cologne, Germany,
and it describes the entrance as having, you
know, barely any signage, just a small buzzer
for drivers to press. But inside. But inside,
it's a hive of activity. And this brings up the
WeWork comparison. I saw this in our notes. It's
a very, very apt analogy. In a WeWork, right,
you have a freelancer, a small startup, and maybe
a corporate team, all sharing the same coffee
machine and the same printer. Right, shared infrastructure.
In a ghost kitchen, you have what they call the
single kitchen format. Meaning one kitchen, multiple
restaurants? One physical room. Yeah. One line
of cooks. But on the app, that one room is listed
as a sushi place, a burger joint, and a Thai
spot. All at the same time. Wait, wait, hold
on. Is it the same cook as the guy who's flipping
the burger also rolling the maki? In some of
the models, yes. Absolutely. They call it cross
-utilization of labor. It's a cross -utilization.
If you have a good line cook, they can follow
a recipe for a quesadilla just as easily as they
can follow a recipe for a grilled cheese sandwich.
The ingredients are prepped. The station is set
up. It's just a different set of instructions
on an iPad. That is wild. So I'm picturing, you
know, three different chefs in three different
authentic kitchens sweating over their specific
craft. And it's actually just one guy named Steve
in a windowless room looking at three different
iPads. That is the reality in many of these places.
And it creates incredible, almost unbelievable
flexibility. It feels like this just exploded
overnight. I really feel like I didn't even hear
about this five years ago. And now it's just.
It's everywhere. Was this just a COVID thing?
Did the pandemic create this? COVID was the gasoline,
but the fire was already burning. It was an accelerant,
not the cause. So who started it? Who was the
first person to say, hey, we don't need tables,
we don't need chairs? The pioneers in this space
are generally considered to be a company called
Rebel Foods. Rebel Foods sounds like a faction
from Star Wars. They're based in India, actually.
And they launched their first cloud kitchen way
back in 2015. 2015, that's really early. It is.
But the really interesting move to burn the ship's
moment for them was in 2016. They looked at their
books, at all the data, and they realized something
pretty profound. What was that? Their dining
rooms were losing them money. The actual restaurant
part of the restaurant was a liability. The part
that makes a restaurant a restaurant was the
problem. That's amazing. It was an anchor holding
them back. So they made a really radical decision.
They closed all the dining rooms. They went 100
percent cloud. In 2016. That's years before the
pandemic forced everyone else to do it. Years.
It was truly visionary. They saw two. Big societal
shifts happening. One was urbanization. Right.
Cities are getting denser. Traffic is getting
worse. People don't want to drive to a restaurant
after a long day at work, try to find parking,
wait for a table. The friction was getting too
high. And the second thing. Increasingly busy
lifestyles. Or, you know, if you want to be a
little more cynical about it, you could call
it the laziness economy. I prefer the efficiency
economy. Thank you very much. But no, I get it.
We got used to streaming movies at home instead
of going to the theater. It makes perfect sense
that we'd want to stream our dinner instead of
going out to the restaurant. Exactly. And in
the United States, that shift from on -premise
dining to off -premise dining was already climbing
steadily year after year. The line on the graph
was going up and to the right. And then, and
then? March 20. And then the world just stocks.
Dining rooms become illegal. You literally cannot
open your doors to the public. If you were a
traditional restaurant owner in March of 2020,
you were staring into the abyss. You have rent
to pay. You have staff to pay and you have zero
revenue coming in. It was an extinction level
event for many. So the ghost kitchen model went
from being a cool experiment for a few companies.
To being the only life raft in the middle of
the ocean. Precisely. It became a survival mechanism.
If you're a big chain like Applebee's and nobody
can come sit in your booths, you have a giant
kitchen sitting there, totally idle. You have
cooks on the payroll. You have a freezer full
of food. So you start spitting up ghosts. You
start inventing brands to put on the delivery
apps. This is where the creativity and, you could
argue, the deception really ramped up. This is
what the sources call the masking phenomenon.
This is my absolute favorite. part of the deep
dive the names the branding it's like playing
a game of guess who with your dinner it's fascinating
marketing it's almost psychological warfare against
the consumer but before we list them let's talk
about the why again specifically for these big
chains why does a company like applebee's need
to hide Everyone knows Applebee's. It's a massive
brand. It's in every suburban neighborhood. Why
not just sell Applebee's wings on Uber Eats?
The simple answer is brand baggage. Baggage.
Think about it. If you're a 22 -year -old scrolling
through DoorDash at 11 p .m. on a Saturday night
and you see the name Applebee's, what do you
think? What's your immediate association? I think
suburban family dinner. I think my aunt's birthday
party where all the servers come out and sing.
Right. Do you think... Cool, spicy, trendy, late
night snack. Definitely not. No. That is the
baggage. Applebee's has spent 40 years and billions
of dollars building a very specific brand image.
That image works great for families in the suburbs
at 6 p .m. It works terribly for Gen Z in the
city who want something cool at midnight. So
they create a mask, a whole new identity. They
create a new brand from scratch that is specifically
designed to appeal to that late night scroller
without the uncool vibe of the parent company
attached to it. It's a clean slate. You get to
be the new cool kid on the block without actually
changing a single thing in the kitchen. Precisely.
It's brand arbitrage. Okay. I want to play a
game. I've got the list from our sources here
in front of me. I'm going to name the ghost brand,
the virtual brand. And I want you to tell me
who's really behind it. And this is the important
part, why they chose that specific mask. What's
the strategy behind that name? I am ready. Let's
do it. Okay. We already covered Pasquale's and
Chuck E. Cheese. The strategy there is pretty
clear. Hiding the mouse. Correct. Selling adult
-ish pizza to adults who don't want to admit
they're eating food from a children's entertainment
center. All right. Next one. A big one. Cosmic
wings. Ah, yes. Cosmic wings. This is a great
example. The name sounds trippy. Psychedelic,
even. It does. And the menu reflects that. It
features wings covered in Cheetos dust. Both
the crunchy and the flaming hot kind. Cheetos
dust. Okay, so who is making these psychedelic
Cheetos wings? That would be Applebee's. Applebee's.
Okay, break down the strategy here. Why Cosmic?
Why Cheetos? Look at the target demographic.
Who is ordering delivery late at night? who love
snack foods like Cheetos, who might be attracted
to a name like Cosmic. Are you suggesting they
are specifically targeting people who might be
under the influence of certain recreational substances?
I am saying they are very clearly targeting the
munchies demographic. The stoner strategy, that's
what it is. Effectively, yes. It's a textbook
case of market segmentation. Applebee's is for
your parents' dinner. Cosmic Wings is for you
and your friends at 1 a .m. after a night out.
And it's the exact same chicken. It's the exact
same fryers and the exact same chicken, but they
are selling it into two completely different
worlds. It's brilliant. I should also mention
they also run a safer one called Neighborhood
Wings, but Cosmic was the real breakout hit.
Okay, that's incredibly smart. Next one, The
Burger Den. That one belongs to Denny's. Denny's,
okay. The Burger Den. It's a little on the nose,
isn't it? A little obvious. It is. But think
about Denny's brand perception. What is Denny's
famous for? Grand slams, pancakes, breakfast,
specifically a drunken breakfast at 3 a .m. Exactly.
Breakfast. Now, if it's 7 p .m. on a Wednesday
and you want a high quality burger for dinner
for your family, is Denny's the first name that
pops into your head? No, not at all. I feel like
Denny's at dinnertime is a little sad. No offense
to Denny's. Precisely. They have the ingredients.
They have the flat top grill. They know how to
make a burger. Yeah. but the brand prevents people
from ordering dinner from them. So the Burger
Den unlocks the dinner crowd for them. It allows
them to compete directly with brands like Five
Guys or Shake Shack on the delivery app, which
Denny's could never ever do under its own name.
They also have one called Meltdown for patty
melts and other sandwiches. Same strategy. Okay,
here's one that I think is genuinely hilarious.
Hootie's Burgo Bar. Chuckles. Yes. This is, of
course, owned by Hooters. Now, Hooters has a
very specific brand asset, a very famous one.
They do. The orange shorts, the tank tops, the
whole atmosphere. Right. Now, the food at Hooters,
the wings specifically, is actually pretty famous.
People genuinely like the wings. They have a
following. They do. It's considered good bar
food. But think about the friction of ordering
Hooters for delivery in certain contexts. Let's
say you were at a corporate lunch meeting. You're
in charge of ordering food for the team. Can
you order Hooters? Absolutely not. You cannot
have a bag with the Hooters owl and the big orange
font sitting on the conference room table. HR
would have a field day. Exactly. Or maybe you're
a family with kids at home. You want the wings,
but you don't really want to explain the brand
to your eight -year -old son or daughter. So
Hootie's Burger Bar is basically incognito mode
for Hooters. It creates a safe, sanitized way
to access the product. Without the social stigma
or awkwardness of the parent brand, it completely
sanitizes the transaction. They also operate
Hooties Bait and Tackle and Hooties Chicken Tenders.
That is just fascinating. It's decoupling the
food from the experience. You know, usually restaurants
say the experience is everything. And Hooters
is basically saying, actually, for this specific
customer, our experience is a liability. So let's
hide it. Precisely what they're doing. OK, let's
rattle through a few more of these because the
creativity here is just endless. How about Conviction
Chicken? That is TGI Fridays. Conviction Chicken,
like you're convicted to eat it. Or it's criminally
good. Or perhaps they are convicted to serving
great chicken. It's a bold name. You have to
give them that. Okay, how about Fresh Set or
The Wing Dept? Those are both operated by Red
Robin. They also run one called Chicken Sammies.
Everyone loves a chicken sandwich. It really
seems like chicken is a huge theme here. Wings,
tenders, sandwiches. Chicken wings and sandwiches
travel really well. They hold their heat. They
don't get soggy too quickly. They're perfect
for the delivery model. A steak, for example,
does not travel well. That's true. It gets cold.
The texture gets tough. So you see a lot of these
ghost brands focusing on finger foods and things
that can survive a 20 -minute car ride. Speaking
of chicken traveling well, here's one that I
remember seeing in the news because it was just
so strategically clever. Thigh Stop. Ah, yes.
Thigh Stop. This was a Wingstop creation, and
it's a master class in supply chain management.
Now, Wingstop is already a cool brand. They don't
have that uncool dad problem like Applebee's
or Denny's. So why would they launch a ghost
brand? This wasn't about branding. This was purely
about survival. Do you remember the great chicken
wing shortage a while back? I do. It was a dark
time for America. Wing prices went through the
roof. They skyrocketed because wings are a finite
resource. A chicken only has two wings. Right.
But it also has two thighs. And in America, nobody
really wants the thighs as much. They want the
white meat. Exactly. In the U .S. market, thighs
are significantly cheaper than wings. So Wingstop
was facing a massive margin crisis. They couldn't
sell wings profitably anymore, but they couldn't
just stop selling wings. Their name is literally
Wingstop. If Wingstop stops selling wings, they're
just stop, which is not a great name for a restaurant.
Exactly. So what do they do? They launched Thighstop,
a virtual -only brand. dedicated to crispy chicken
thighs using the same sauces and recipes. That
is brilliant. Just brilliant. It allowed them
to shift consumer demand. They marketed the heck
out of thigh stock to get people to try and buy
the cheaper cut of meat, which relieved the pricing
pressure on their wing supply, all without confusing
their core customers or changing their main brand.
So it's supply chain management disguised as
a hip new restaurant. It is. And the beauty is
once the wing shortage eased up, they could just...
delete the brand yeah or keep it it's just software
it's totally flexible okay a couple more quick
ones thrilled cheese that would be ihop they
also run super megadilla for quesadillas and
pardon my cheesesteak ihop doing quesadillas
Super Megadilla. That sounds like something a
14 -year -old boy came up with. Well, again,
think about it. IHOP is the International House
of Pancakes. It's incredibly difficult for them
to sell dinner. These brands allow them to utilize
their giant flat -top griddles, which are perfect
for making quesadillas and cheesesteaks during
the evening hours when almost nobody wants pancakes.
It's about asset utilization, keeping the kitchen
busy. 100%. And lastly, what about rotisserie
roast? That one is Boston Market. Which makes
perfect sense, as rotisserie chicken is their
core competency. Yeah. It's not much of a mask,
but it's still a separate digital entity. Now,
is this just an American thing? Are we the only
ones being tricked by all these creative names?
Not at all. The source material is very clear
that this is an international phenomenon. In
Canada, for instance, there's a chain called
the Pickle Barrel that operates a ghost kitchen
called Dirty Dogs. Dirty Dogs. Okay. Classy.
And in Brazil... Outback Steakhouse, which ironically
is an American company themed after Australia,
operates a very successful virtual brand called
Aussie Chicken. Wait, wait. So Outback Steakhouse,
an American chain pretending to be Australian,
operates a ghost kitchen in Brazil called Aussie
Chicken. The layers of branding and globalization
are quite dense, yes. Yeah. It is truly a world
of globalized confusion. They also do this in
the U .S., by the way, under the name Tender
Shack. This whole thing leads me to the tech
side of this, because what you just described
with Wingstop spinning up a brand to solve a
supply chain problem, that sounds like something
a software company does. We have a bug in the
code. Let's push a patch. That is the third big
takeaway here, and it's a crucial one. These
aren't just restaurants anymore. They are data
companies that happen to sell food. Explain that.
How is a guy frying chicken in a basement a data
company? Think about the data feedback loop in
a traditional restaurant. The owner knows what
sold well that night because he sees the empty
pleats in the sales report. Right. But he doesn't
know why someone didn't order the steak. He doesn't
know how long they looked at the menu before
deciding. He has very little data on customer
behavior. But on an app? On an app, everything
is tracked. The scroll depth. The click -through
rate. How long your thumb hovered over the spicy
option before you tapped on mild. Every single
interaction is a data point. So they are A -B
testing my dinner in real time. Constantly. This
brings us to the concept of beta testing for
food. In the old world. If I wanted to try a
new restaurant concept, let's say I want to open
Paul's Spicy Tacos, I had to take a huge, massive
risk. A huge risk. You have to sign a five -year
lease. You have to buy a neon sign. You have
to paint the walls green. You have to hire staff.
If it turns out nobody in your neighborhood likes
Spicy Tacos, you go bankrupt. What about with
a ghost kitchen? With a ghost kitchen, you just
design a logo in Canva and upload a PDF menu
to Uber Eats. If nobody orders Paul's Spicy Tacos
in the first two weeks, you just delete it. Poof,
it's gone. And the next week you launch Paul's
mild burritos. Exactly. Zero construction cost.
Zero lease breaking fees. It brings the fail
fast, fail cheap mentality of Silicon Valley
directly into the kitchen. So we could see a
world where menus are totally dynamic. Like if
a snowstorm hits, the app automatically spins
up a virtual brand called Cozy Soups for 24 hours.
We are already seeing that. If a certain ingredient
or recipe goes viral on TikTok like. Say that
feta cheese pasta thing from a while back at
Ghost Kitchen Network can have a viral feta pasta
brand live on DoorDash in 24 hours. A traditional
restaurant with printed menus and a static brand
simply cannot move that fast. It's agile development,
but for food. It is. Our source is called Data
Driven Dining. They track the feedback, the star
ratings, the wait times, and they can adjust
the menu instantly based on that data. If an
item gets bad reviews, they can just remove it
from the menu mid -service. OK, so far, this
sounds kind of amazing from a business perspective.
It's efficient. It's cheap for the owner. It
gives me, the consumer, exactly what I seem to
want when I want it. But we have to talk about
the flip side. We do. Because the sources use
some pretty grim language when they describe
the reality of working in some of these places.
We do need to address the dark side of the dark
kitchen. And this is where the term stops being
about street lighting and starts being about
ethics and transparency. The descriptions in
the articles we read, cramped, windowless. unpleasantly
hot imagine working in a shipping container or
a basement with no ventilation windows you are
standing over a deep fryer for a 10 -hour shift
but unlike in a normal kitchen there is no release
there's no connection to the outside world What
do you mean by that? In a normal restaurant kitchen,
it's hot and stressful, yes. Yeah. But you can
hear the buzz of the dining room. You see the
servers coming in and out. Most importantly,
you see the empty plates coming back, which means
someone out there enjoyed the food you just cooked.
There is a human connection, a sense of purpose.
In a ghost kitchen? It is just a tablet that
screams at you. Ping, order, hashtag 455. Ping,
order, hashtag 456. A delivery driver in a motorcycle
helmet shoves a phone in your face, grabs the
bag, and leaves without a word. You never see
the person who is eating the food. You're just
a manufacturing node in a logistics network.
It turns the craft of cooking into an assembly
line. It turns the chef into a factory worker.
That is a very common critique, that it strips
the soul and the art out of the culinary arts.
And there are real concerns about working conditions
because these places are hidden from public view.
No customers walking in means less scrutiny,
less pressure to maintain a certain standard
of cleanliness or safety. And then there's the
other dark side, the deception aspect, the transparency.
This is a big one. The sources we looked at highlight
a specific case study in the UK from back in
2019. What happened there? Two big corporate
restaurant operators. The restaurant group and
casual dining group, they faced significant public
backlash. And what were they doing? They were
caught operating several virtual brands that
were selling the exact same food as their high
street chain restaurants, but they were marketing
it as if it were from a new independent local
business. That's the betrayal we talked about
at the very beginning with Pasquale's. It's the
feeling of being tricked. It raises a real consumer
rights issue. Do you, as a consumer, have a right
to know who actually made your food and where
it came from? I feel like I do. If I'm buying
something marketed as grandma's organic artisanal
granola and I find out it's actually made in
a factory by a subsidiary of a massive chemical
company, I feel lied to. Even if the granola
tastes exactly the same. It's been called culinary
catfishing. That's a perfect term for it. And
it's all enabled by the delivery apps. The apps
are the accomplices in this whole scheme. They
are the platform. And frankly, they benefit from
the illusion of choice. Right. If I open the
app and I see 50 different restaurants in my
area, I think, wow, what a vibrant, diverse food
scene. But if I knew that it was actually just
three big kitchens wearing 50 different hats.
The app looks a lot less valuable, doesn't it?
One of the sources mentions that a single 6 ,000
square foot kitchen can produce Italian, Thai,
burgers and sushi. To the algorithm, that's four
distinct choices. In reality, it's just one place.
It's the illusion of diversity. It's a monoculture
that's disguised as a rainforest. That is a very
profound way to look at it. So where is all of
this going? We've got Pasquale serving us pizza.
We've got stoned people eating Cheeto -dusted
wings from Applebee's. And we've got chefs working
in shipping containers. Is this the future of
how we eat? The sources seem to point to three
main takeaways for the future, three trends that
are very clear. Okay, lay them on me. First,
the efficiency play is absolutely here to stay.
The brutal economics of commercial real estate
are not getting better. Rent is high. Labor is
expensive. The math of the ghost kitchen just
works too well for the industry to ever go back.
So we're going to see fewer traditional dining
rooms and more of these delivery -only warehouses.
I think that's inevitable. Second, the marketing
play. We will see more masking, not less. Big
brands have now realized they can be anyone they
want to be on the Internet. They will not give
that power up. So expect more hooties and less
hooters on your delivery app. For sure. And finally,
the data play. Food will become more and more
like software. Faster updates, more personalization,
and more algorithmic menu design based on real
-time trends and feedback. It's a little exciting
and also a little dystopian all at the same time.
Like most disruptive technology. So here is my
final thought for everyone listening tonight.
The next time you are on your couch, doom scrolling
on a Friday night, starving, looking for something
new, and you see a cool logo for a place you've
never heard of before. Do a little detective
work. Copy that address from the app. Paste it
into Google Maps and hit Street View. See where
your dinner is actually coming from. And ask
yourself, is this a charming local bistro or
is it a ghost? And then you have to ask yourself
the really hard question. If the fries are hot
and crispy, do I even care? That is the question
that is going to find the next decade of the
food industry. Thanks for diving deep with us.
We'll see you next time.