Examining the darker side of dark kitchens

Anyone who follows the hospitality industry likely has a firm understanding about the impact of the pandemic on the sector: the ways in which businesses have been affected, how they have adapted, and what individual businesses did to survive.

Indeed, throughout the pandemic, food delivery services became a cornerstone for many hospitality businesses, who came to rely on takeaway and home delivery to make up for the revenues that were lost when lockdown restrictions and social distancing made in-house service impossible.

In a recent survey amongst 250 decision-makers within the UK hospitality industry, commissioned by Peckwater Brands, it was revealed that 75% of respondents had depended on takeaway services to survive. For many consumers throughout lockdown, a takeaway was a welcome change of pace (and a break from cooking) with a significant proportion making a conscious choice to support local businesses with their custom.

No surprise, then, when the total number of users on delivery platform apps like Deliveroo and Uber Eats grew massively during the pandemic, increasing by almost 25% from 2019 to 2020 (19.9 million to 24.8 million). It was during this time that a new trend gained prominence – that of the dark kitchen. These have increased in number and scale in recent years, and opinion on them in the media seems split.

In this article, we will explore the nature of the dark kitchen, evaluate its benefits and its drawbacks, and examine what the future of the hospitality sector might look like – with or without dark kitchens.

What are dark kitchens?

Put simply, a dark kitchen is an independent food and beverage preparation facility with no customer-facing element, in which orders and fulfilled or one or multiple brands. These can be set up anywhere, but a popular setting is unused or industrial areas where space is cheap, like warehouses and carparks.

It is in the interest of the dark kitchen proprietors to maximise efficiency by fitting as many cooks and as much equipment as possible, and to turn around the maximum number of orders. While the standard and cleanliness of dark kitchens has increased since their inception, reports persist of cramped, windowless conditions in some dark kitchens.

For both existing food service businesses who have exceeded the operation capacity of their own facility, dark kitchens can be viewed as a logical solution: if you don’t have enough kitchen space, simply create more space off-site and have the food prepared there. But what are the benefits and drawbacks of dark kitchens? And could a more elegant solution exist?

The case for and against dark kitchens

One advantage of dark kitchens is, in fact, their location – traditional brick-and-mortar establishments will pay a premium for real estate in commercial areas with a lot of foot traffic, for both the prestige and the promise of impulse customers. A dark kitchen can be placed anywhere that delivery drivers can reach, so costs can be saved when picking a site.

Despite the mitigation of cost through location, a major disadvantage is actual cost of fitting and equipping a kitchen. For a business that decides to open an off-site dark kitchen, the average cost of the necessary equipment for a commercial food preparation facility can total between £60,000 and £80,000. This is why multiple brands will often operate out of one shared dark kitchen; the spread the cost of new equipment.

For a business owner, the decision to move the surplus of your order volumes to a dark kitchen requires a degree of sacrifice – they must be ready to relinquish the quality control that comes from preparing food on site. What’s more, they are readily giving up valuable customer data to a third party.

Dark kitchens are one solution to the issues of surplus orders, but they are not the only one. There may be a place for dark kitchens in the industry’s future, but a more elegant solution already exists – spreading out orders between existing establishments through delivery franchising.

Spreading the work around

While some businesses were receiving more orders than they could handle during the pandemic, this certainly was not the case for everyone. Changes in food trends and consumer preferences mean that order volumes are rarely consistent, and kitchens hardly ever operate at full capacity all the time.

In fact, Peckwater’s research found that 67% of those surveyed said that they have the capacity – whether in terms of space or labour – to accommodate more orders into their kitchen. The simplest solution? Incorporating a virtual brand – a brand which exists solely on third party platforms without a physical venue – into existing kitchen operations.

One key benefit here is that rather than creating new kitchens, they are simply making the most of the kitchen space that already exists. Any business with the facilities can take part: hotels, cafes, bars – anyone with the staff and the equipment necessary can start preparing and distributing orders.

An added benefit here is profit sharing – not only are virtual/surplus orders being fulfilled, but existing businesses can generate revenues through their previously untapped capacity. Indeed, kitchens that have adopted virtual brands have reported average order increases of 823% after integrating multiple brands into their operations, leading to addition revenues of between £12,103 and £45,823 a month.

Hospitality businesses of all shapes and sizes can be insulated through dry spells and shifting food trends by incorporating multiple brands and cuisines into one kitchen – and with careful planning, this can be done quickly and easily.

What comes next

The newly founded dark kitchens up and down the country likely aren’t going anywhere – the popularity of delivery platforms and increased expectations for variety mean that they are likely part of the industry’s future no matter what. But hospitality owners should be aware that other, more equitable solutions do exist, and while dark kitchens are not without their redeeming qualities, there is always more than one way to do things.

The hospitality sector is wonderfully varied, and we have sadly seen a great many businesses go bust as a result of the pandemic. Using our surviving businesses as a resource to fulfil more orders by making better use of their operational capacity is a solution that might keep the local high-street takeaway alive for a long time yet.

About Peckwater Brands

Peckwater Brands (PWB) is a delivery franchising expert, helping restaurants and kitchens of all sizes benefit from the fullest demands of the market by streamlining the process of embracing virtual brands and multiple-franchise solutions. Working with partners across the hospitality spectrum, they can transform any kitchen into a multi-franchise operation, integrating with their existing operations and opening them up to vastly increased demand across different brands and cuisines.