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Like many virtual dining pioneers, Los Angeles-based, 17-unit hospitality group H. Wood Group’s founders John Terzian and Brian Toll were already considering a foray into ghost kitchens. When the pandemic hit and their venues all had to pivot to delivery-only, that was the final push they needed.
Since April, H. Wood Group has come up with three virtual concepts for the Los Angeles area: Mama’s Guy (an offshoot of their restaurant, The Nice Guy, serving up delivery-friendly pastas, sandwiches and salads, which opened in June), Ela Ela (delivering Mediterranean-style meals like kebabs and falafels), and the All-American Lilah’s (a spinoff of their full-service restaurant, Delilah, serving chicken tenders and burgers). They also have a virtual vegan concept called Beautiful Foods and chicken tenders-centric concept called Tender Fest coming down the pipeline, also in the Los Angeles area.
Although right now all of their concepts are Los Angeles-focused, H. Wood is expanding their reach to areas in LA that are deprived of great takeout options. They’re not opposed, however, to expanding nationwide eventually.
But even though much of their company’s growth these days has been virtual, it has not been an easy road.
“You’d think it would be easier or simpler [to open a virtual restaurant] but just like a brick-and-mortar restaurant, you need to establish a brand, logo, and story behind it,” Toll said. “Then on top of that you need to do things a restaurant would not.”
For their pandemic-era virtual concepts, that means having items on the menu like the take-and-bake lasagna for two, which is available at Mama’s Guy, and making sure that the virtual dining experiences, such as they are, are on point: Each brand has unique, colorful packaging and Lilah’s even launched by delivering food to customers in their parking lot, emulating a vintage drive-thru.
Efficiency is another secret to their success right out the ghost kitchen gate. By creating delivery-only spinoffs of their brick-and-mortar concepts, H. Wood is able to operate both Mama’s Guy and Lilah’s out of their sister restaurant kitchens, and they already have a built-in fanbase.
“We’re not trying to reinvent the wheel; we’re just looking at niches in the market we can fill,” Toll said.
Every delivery order that comes from one of The Local Culinary’s 25 virtual concepts comes with a surprise note, toy, or a handful of gummy bears, all wrapped in colorful, packaging with different pithy messages. Why? When you don’t have design, service, or ambience to work with, successful ghost kitchen ventures have to get creative to make memorable experiences, The Local Culinary founder Alp Franko said.
“When you get food delivered to your home, all you [usually] get is a plastic bag,” he said. “We’re completely different: we work on the quality of the food and pay attention to the packaging and your experience. The story behind the food is very important.”
Franko was one of the early comers to the virtual restaurants game, and launched the first Local Culinary virtual concepts two years ago. He believes he stands out from the increasingly crowded delivery-only market because he does not use cloud kitchens.
The Local uses its own kitchens, and as of August, the company has also launched a franchising model with five or six ghost kitchens — each offering 20-25 of The Local Culinary concepts with an average check of $15 each — mostly in Florida with new franchised kitchens opening up in New York, California, Arizona, and Texas.
Each of the 25 concepts (and growing) has a story to tell and offers a unique experience for delivery customers, like Dirty Fingers, a finger foods concept where customers have to be okay with getting their hands a little dirty, and El Taco Loco, which offers an Instagrammable gold chicken taco with edible gold. The latter was one of the top-selling delivery restaurants on Cinco de Mayo in Miami, according to Franko.
“When you become a franchisee with us, we teach you how easy it is to do 25 concepts with even just one line cook,” he said. “It’s not rocket science and we’re already working with big franchise companies and larger chains that are interested in getting on board.”
With 13 virtual brands in their portfolio, Nextbite is one of the fastest growing virtual restaurant companies to watch. Like The Local Culinary, they work with fulfillment partners that can run these concepts out of their kitchens as supplementary income. Nextbite provides all of the marketing, branding and support through delivery apps, while their partners provide the labor and fulfill delivery orders.
Nextbite’s offerings run the gamut of the typical trendy delivery-friendly foods like burgers, wings and chicken, but it’s their investment in the newly popular celebrity-endorsed virtual brands that makes them stand out.
For example, Hotbox by Wiz — with its cheeky name and munchies-inspired menu of turkey burgers, nachos and burnt (“blazed”) ends — is named after rapper Wiz Khalifa, who personally approved of and endorsed the virtual concept’s elevated comfort food selections.
“One of the things we thought we could bring to help our restaurants stand out was celebrity partnerships; with the right celebrity we could create a lot of cool concepts,” Geoff Madding CEO of Nextbite said. “Wiz’s team immediately got the value of what we were trying to do.”
Hotbox by Wiz went to market in October 2019 in Pittsburgh, Los Angeles, San Diego, Chicago, Denver, Washington, D.C, Indianapolis and New York City after months of research and development to figure out what the market was demanding and what would sell. They also had to develop the menu based on what would travel well — and taste just as good out of a delivery bag as it would on a plate.
“Restaurants have a few things that are important: price, value, and overall experience,” Madding said. “The same is true for us, but the difference is how we deliver that experience. [….] Consumer expectations will get higher as delivery gets bigger.”
Nextbite has plans to develop Hotbox by Wiz nationally but Madding did not disclose which markets they’re targeting next.
Although SBE Entertainment Group is most known for their expansive network of 72 food halls, hotels, restaurants, bars and clubs, their ghost kitchen network and food hall C3 (Creating Culinary Communities) has recently launched five virtual concepts. During the pandemic, their business has tilted to 60% virtual and 40% brick and mortar.
Like many of the other successful virtual restaurant companies, C3’s delivery-only brands stand out with branded packaging and a focus on high-quality, social media-friendly food that travels well.
Sam’s Crispy Chicken, for example — an offshoot of Umami Burger and named after SBE CEO Sam Nazarian —launched in March and is known for its pandemic-friendly combo boxes of fried chicken and sides meant to feed multiple people.
The “elevated” experience differentiates itself, C3 chief operating officer Bradford Reynolds said, by offering vegan chicken sandwich selections in addition to the classic carnivore options. The concept is available for now in New York, Los Angeles, Orange County, Calif., San Francisco and Chicago.
“In the delivery world, you get one shot at that unboxing experience,” Reynolds said. “It’s hospitality in a box.”
Another virtual concept, Crispy Rice, is a build-your-own sushi delivery venue that allows customers to combine pieces of traditional sushi, like nigiri, with more “out-there” options like their spicy hamachi truffle avocado roll.
“What we’re doing is basically trying to provide the consumer with — in an evolving marketplace — better options within each classic [takeout and delivery] category,” Reynolds said.
Right now, each brand is in 20-25 SBE locations, but they plan to eventually expand to over 100 locations per virtual brand using only their existing real estate and dining partners. They’re looking at Atlanta, Nashville, and Phoenix for the next locations of Crispy Rice, Sam’s Crispy Chicken, among their other brands.
Founder of Planet Hollywood Robert Earl’s latest venture is Virtual Dining Concepts, which launched with virtual wings chain Wing Squad in January 2020 across 16 cities. His slowly growing empire of virtual dining experiences added yet another feather in its cap this summer: Tyga Bites.
With the rapper/TV personality Tyga as a built-in marketing machine, Tyga Bites is the latest virtual chain to use celebrity as a vehicle for brand awareness.
The concept has a simple menu of chicken nuggets (or chicken “bites”) and is available with various rubs (or “dusts”), dipping sauces, and tater tots as side dishes. The company catapulted to initial success with the launch of Tyga Bites in July across 200 markets and dozens of major cities including New York, Los Angeles, Denver, Washington, D.C., San Francisco and Chicago, with plans to expand to 500 markets by the end of September.
Virtual Dining concepts is partnering with restaurants looking for an additional sales outlet to run Tyga Bites out of their kitchens.
“We think this is the future, far more than traditional ghost kitchens,” Earl said.
But how were they able to expand so quickly right out of the gate?
“I am a lunatic,” Earl jokingly explained. “In this particular case we have a strong relationship with Sysco and when you have a celebrity like [Tyga] on board, you’re going to get a national platform.”
As for the food quality, the chicken is “durable,” the menu is not overly complicated and easy to execute, and it’s customizable with three spice rubs and 12 sauces for different flavor profiles.
“We tested how well it would withstand delivery and we tested how good these would taste leftover,” Earl said.
The packaging itself was designed with social media in mind, with a yellow and brown color scheme and a drawing of a fierce tiger on the cardboard.
“Obviously it’s hard for restaurants to get on board with these virtual concepts if you’re struggling [at this time during the pandemic],” Earl said. “But you have this brand with built-in celebrity, we did the packaging for you, we do the social media marketing for you […] we think of ourselves as a support system.”
Restaurant investor company Cordia Kitchens may have only launched two ghost kitchen concepts so far in the Las Vegas market, but nightlife business veteran CEO Peter Klamka has big plans for a thriving virtual empire.
After acquiring the Vegas Strip restaurant The Blind Pig (pizza, sandwiches, pasta) in May, the company began to focus on off-premise solutions during the pandemic. Operating out of the Blind Pig kitchens, Klamka launched Vegas Dot Pizza at the end of July, and is launching KO Sports Bar and Grill in the fall.
Like their Vegas hometown, Vegas Dot Pizza and KO are both flashy, themed and appeal to a nightlife crowd. Klamka describes Vegas Dot Pizza as “New York pizza meets Vegas showgirl,” and showcases models and actresses eating pizza on their social media pages.
While KO Sports Bar and Grill, which is still a work in progress, is an mixed martial arts-themed delivery-only restaurant that delivers bar food with changing packaging/promotion around fights and events, many of which take place in Las Vegas.
“I once developed some of the first celebrity-backed credit cards; food is a commodity just like credit cards,” Klamka said. “If I develop concepts around things people are passionate about, we’ll be able to sell burgers just like that.”
Klamka said that for a virtual concept to work, it has to stand out with experience and theming. For example, when KO Sports Bar and Grill launches, they plan to have special events where an MMA fighter might deliver your food one night. He also plans to have the Vegas Dot Pizza girls work special events and promotions.
“Obviously you have to rely a lot more on social media, packaging, etc. because the in-house experience is not there,” he said. “I am adding in the fun element you can’t get elsewhere.”
Klamka plans to expand his ghost kitchen concepts to Ann Arbor, Las Angeles, San Diego and Dallas over the next year. The average check is $20 for pizza and $30 for a pay-per-view package with KO Sports Bar and Grill.
