The ghost (or cloud) kitchen concept was born of the notion that a restaurant can exist in the cloud. This is misleading of course, because you can’t eat a hamburger that exists only as ones and zeroes. Except in the Matrix but that’s a rabbit hole we’ll avoid for the moment.
Exaggerations about time, space, and matter aside, ghost kitchens are conceptually sound. Operate a commercial kitchen (ideally away from expensive commercial thoroughfares) and make it mad efficient with SaaS software. Then integrate with all the major delivery aggregators and you have a dining business with the smallest possible physical footprint. Suddenly the margins on that $20 hamburger go up. Way up. At least in theory.
Now, a company in Indonesia has come up with a way to make the ghost kitchen’s physical footprint even lighter. DishServe, a ghost kitchen/virtual restaurant company based in Jakarta, is using home-based kitchens to fulfill takeout orders for Indonesian comfort food, according to a report in TechCrunch.
The company was launched last year by Rishabh Singh, who was previously COO of the Singapore budget hotel chain RedDoorz. Singh and his partners have managed to raise some pre-seed funding for his idea from Singapore-based Insignia Ventures Partners.
So Many Questions
Apparently, Singh’s operating plan is to eschew buying or renting any kitchen space. Rather DishServe partners with about 100 home-based kitchens, which fulfill orders for local food and beverage brands and he acts as their last-mile delivery network. The company’s target market is locally based multi-location brands looking to expand delivery without adding any physical capacity. That’s a pretty standard ghost kitchen target market.
According to the TechCruch piece, the pandemic lit this lightbulb for Singh. He saw local restaurants forced into delivery-only mode needing to compete with well-known takeout brands like McDonald’s and KFC. Add to the mix an underemployed population stuck at home but in need of income. He was thinking specifically of stay-at-home moms who can cook and need income.
Stitch together these different constituencies with aligned interests and voila, you get DishServe.
Where to begin with the questions? Our first involves how on earth do you manage quality with a network of home-based kitchens fulfilling dining orders. Apparently, DishServe has a process for this. Kitchen applicants must submit photos. And this step is followed by an in-person check.
DishServe helps its kitchen partners upgrade their gear so all operate from a similar platform. DishServe owns the equipment, which it retrieves if the relationship is severed. And finally, DishServe gives the kitchens a trial run on its own virtual kitchen brands before using them to fulfill partner orders.
The Perennial Scalability Question
Fascinating concept. But we wonder if it’s a model replicable in other parts of the world. Especially in places where there is stringent local health and safety regulation of the foodservice industry. And we also wonder about the scalability of a home-based kitchen network. There is a lot more friction involved in adding a kitchen than there is, for example, in adding a car and driver to Uber’s platform.
Still, DishServe is operating in an increasingly competitive cloud kitchen market in Indonesia. One rival called Hangry (great name) just raised $13 million and has ambitions to go global. They do not appear to be relying on home kitchens. Instead, Hangry has launched 40 ghost kitchens in the region. It plans to expand to 120 this year and add a few dine-in locations.
Regional super apps Grab and Gojek have also entered the regional ghost kitchen space, making the stakes even higher. This all incentivizes innovative approaches like DishServe to gain an edge. Let’s have a look in six months or so and see if DishServe is hanging on to its model. Will DishServe cave and open its own kitchen(s) by then?