Have you heard of a ghost kitchen? Maybe not. But we bet you have heard of that TikTok pasta recipe with baked feta and tomatoes. We’ll explore how they’re connected in a minute, but first, let’s dig into what a ghost kitchen actually is.
A ghost kitchen is a simple business model built to help restaurants lower overhead and maximize profits by turning existing kitchens into delivery-only restaurants with no storefront. The “ghost kitchen” concept started in 2018 with Virtual Dining Concepts (VDC).
VDC promised low risk and zero upfront fees, and successfully launched several delivery-only concepts over the last four years, securing $20 million in Series A funding by October 2021.
Never one to let a good idea go to waste, TikTok announced that it is partnering with VDC and Grubhub to bring users a delivery option featuring recipes that go viral on TikTok.
The company initially launched 300 locations and began deliveries in March. According to an interview with TechCrunch, TikTok limited menus to viral recipe favorites, like the feta pasta, smash burger, corn ribs, and pasta chips. When new recipes go viral, the menu will change.
TikTok confirmed that proceeds would go back to the original dish creators who first went viral on the platform and to those who create new ones in the future, indicating potential opportunities for a new niche of influencers.
TikTok’s December announcement that it would enter the food space made waves. And how could it not? Food and beverage is a notoriously risky and volatile industry; to enter it during a pandemic seems unwise at best, even with an innovative model. So is this really a sustainable move?
The short answer: probably not. The longer answer: TikTok isn’t afraid of the heat of the kitchen.
They know what they’re getting into and what they’re not. Talking to TechCrunch, the company explained that the focus of the ghost kitchens is not necessarily on the food business. The company says its delivery-only kitchens are an effort to bring a new TikTok food experience to fans, not an attempt to break into the restaurant business — signaling that the push is more of a marketing campaign than a strategic business shift.
The size of the operation is another sign. TikTok has over 1 billion daily users, and its parent company surpassed more than $34 billion in revenue in 2021. Even with 1,000 kitchens, the kitchen business will still represent a tiny piece of overall operations.
So, while the kitchen concept might not be sustainable, perhaps TikTok isn’t looking for a long-term solution. But that brings us to our next point: Who does win long-term?
In some ways, the ghost kitchen concept powered by VDC has lived up to the hype. The company has partnered with celebrities like Mariah Carey, Mario Lopez, and Pauly D, bringing mutual success to VDC and the celebrity brands with an innovative and low-risk investment.
But how will this translate to content creators and influencers?
In November 2021, celebrity YouTuber Jimmy Donaldson (MrBeast) partnered with VDC to launch BeastBurger, a delivery-only fast food service. With more than 1,000 restaurants across the United States, Canada, and the United Kingdom, Donaldson’s BeastBurger has seen enough success to get traction.
But it’s worth remembering: MrBeast already had an established influencer business. He came to the project as an investor, not a creator. This allowed him to separate his core MrBeast brand from BeastBurgers, providing both with more flexibility.
The path to a ghost kitchen might not be so simple for other content creators.
Select influencers — particularly those already working in the food and lifestyle space — may boost brand engagement, and perhaps even passive income, with a ghost restaurant feature on TikTok.
But it’s hard for influencers in different verticals to make a case for a ghost kitchen, at least at this stage in the game. It takes a lot of time and effort to create quality content, and like every other industry on the planet, time and effort equal money.
If ghost kitchen content doesn’t produce a proportional return — more followers, more advertising partnerships, more revenue, etc. — it’s all a wasted investment. When content is your bread and butter, dabbling outside your niche is a considerable risk.
Beyond this, it’s not entirely clear which direction the revenue stream will flow. TikTok confirmed that “proceeds from sales” would go to creators, but it stopped short of saying how much.
From where we sit now, TikTok’s ghost kitchen sounds like an exciting new concept that will drive interest in certain sects of the online community. But it’s still too early to tell if it’ll be more than just a flash in the pan.
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