Ghost Kitchens: Food as Logistics, Planning as Tactics
Of all of the unbundlings that are taking place during the Covid pandemic, the unbundling of food-from-restaurant is a smaller tragedy but one no less exhausting. Helen Rosner recently wrote about the excitement and anxiety of “impossible” restaurant reservations becoming, well, exciting and anxiety-ful again. It’s been a long year of ordering food from an anonymous source in the meantime. The year we all learned about the ghost kitchen.
Ghost kitchens are, in many ways, a bummer created at the intersection of necessity and availability. Most consumers, particularly urban and culture-conscious diners, seem to revel in the idea of a night out. Most consumers also, more often, and especially during the Covid-19 pandemic, will settle for cheap takeout. Ghost kitchens, restaurant kitchens that exist solely on the internet, seek to leverage the latter without any of the expenses of the former. Many in the restaurant industry worry that they will crowd out actual restaurants and stamp out the wild diversity in the US restaurant scene that is probably one of the only things that actually differentiate life between cities in this country. It’s not great, and it’s not exactly the fault of the kitchens themselves.
For all the existential anomie about ghost kitchens, that is places that make food solely for delivery under the guise of a different brand or brands, it is clear that there’s at least one group of folks who love them: investors.
Real estate has always been one of the greatest expense variables for typical restaurants. Cloud kitchens will minimize this expense as they can operate from non-prime locations and save on leasing costs resulting from the area needed to draw dining traffic. Standardized products are also created by cloud kitchens, which further reduces cost.
A separate blog from pre-Covid times notes how ghost kitchens can really leverage four strengths:
Real Estate: “Companies... focussing on light industrial areas outside dense urban centers but near enough to satisfy the demand of residential areas.”
Delivery Demand: “Consumers are increasingly willing to pay a significant amount for the convenience of having their food delivered.”
Gig Workers: “The number of people working as ride-share drivers, delivery drivers, and remote workers is on the rise, offering low-cost labor with no strings attached from an employer’s point of view.”
Emerging Technology: “Robot kitchens are on the rise and drone delivery is poised to break through, with only regional regulations standing in its way.”
A lot of this feels either very no-duh (not paying much rent is good for a business) or pie-in-the-sky (lots of pizza robots have come across the internet. None have stayed). Separating out “Kitchens as a Service,” or the back-of-house function, can do something unique and exploit a zoning loophole.
This can be seen in the recent Applebee’s deal to pilot their chain as a ghost kitchen. As consumption of chain restaurants decline, the franchise can supplement the often-elaborately build-out kitchens with other orders. This is technically against zoning codes, turning sit-down restaurants into commissaries, but the kitchens need the orders, cities want the tax revenue, and nobody is writing an elegy for Applebee’s so why not?
Food as logistics
There is a disconnect here worth clarifying. The restaurant business -- with its tight margins, intensive labor, and reliance on fickle taste -- is difficult. Heck, the grocery business isn’t easy, either. But the food business -- getting edible things to consumers through space -- is much more attractive. Ghost kitchens can leverage lower costs on labor (because they’re not paying for front-of-house staff) and real estate (because they don’t need nice dining rooms) into lower-quality food (because people have lower expectations for delivered meals), while still pricing at/comparable to restaurant price points.
Matt Newberg made this very clear in an interview with Vice about the exasperating Cloudkitchens project:
“Their whole game is to maximize the dollar per square foot on an industrial property for delivery, and then get some of the transaction,” he said. “It’s their way of getting into a space, without physically having to go and count how many orders are going out the front door.”
This is all to say, the food isn’t the point. The best-case scenario for the ghost kitchen owners isn’t good food, it’s tolerable food. The entrepreneurship, the whole “starting a restaurant to bootstrap your way up in America” thing and the whole “introducing people to new flavors” thing, is completely orthogonal to the point.
The point is controlling the highest-value part of the food-processing chain, converting raw ingredients to a finished product for a final consumer. The point is capturing the value in a system and squeezing the inputs (particularly labor and land) to a minimum. It’s food as logistics.
In many ways, this should not be too shocking: making money for investors out of low-value land and low-wage labor is what capitalism does. Heck, it’s the history of land development in this country and why I have spent the vast majority of my three-plus decades in reclaimed swamp. That it’s taken so long to get into the restaurant business has largely been because restaurants have been so decentralized for so long, that informality and food are so closely linked, and that delivery is such a poor product compared to in-restaurant service.
Ghost kitchens represent a shift that works within a certain legibility of the food service industry. To borrow from James C. Scott, one most look at restaurants while Seeing Like a Venture Capitalist. Ghost kitchens allow for horizontal integration of the highest-value part of a necessary process. Everybody eats. The process of turning produce into food and transporting it to a consumer is the highest-value part of the money-for-eating chain. Control over it, without having many liabilities by way of real estate or labor? That’s shareholder value right there.
Planning Around Corporate Control
While there probably are ways for urban planners to ban this particular sort of enforced precarity in their communities, I can’t think of any that are sane/likely to get through a City Council.
What is possible, or perhaps this is simply always where my mind goes, is to make a point of how ghost kitchens:
Still need to be located somewhere, and preferably for delivery efficiency, somewhere with great car connectivity
Still need someone to make the food and the deliveries, gig worker or no
As seen in the Applebees example above, ghost kitchens are currently capitalizing on strip malls and power centers -- the sort of deteriorating landscapes of over-malled America. To give an example slightly out nowhere, suburban St. Louis’ Brentwood Pointe:
Brentwood is the sort of microsuburb that is extremely familiar in the US: Less than 10,000 people, 85% of whom are white, centered around an interstate and a great school district. Of the city’s $12.4 million in projected revenue, 44% ($5.6 million) comes from sales tax, the vast majority of which is Brentwood Pointe, loathed at the intersection of two interestantes and just north of MO-100. It’s an ideal location for a ghost kitchen.
Where planners can come in is shifting use and circulation patterns where ghost kitchen investors want to be. As noted elsewhere, particularly by Block Club Chicago, delivery drivers can muck up traditional mall parking lots. Meanwhile, a lot of those traditional mall parking lots simply don’t need to be there if consumers aren’t coming to sit down for a meal. And if consumers aren’t coming to the mall if the mall is coming to them, well, these consumers are the same sort who tend to be the same people coming to planning commission meetings. If they don’t care about higher density around interstates and transit, it’s a good opportunity to convert some parking and some air rights above big boxes into more housing in highly-desirable locations with good transportation and great schools
By refitting circulation patterns to be more like airport circulation, and remixing use to allow residential next to/on top of commercial, planners can make the mall ready for the 21st century, make the suburb more equitable, and sustain local commercial uses by increasing the population. It’s converting a power-center into a place.
Conclusion
It’s unclear if the ghost kitchens are coming for us all or if this is a pandemic blip. At least, it’s unclear to me. In any event, and rapacity aside, they represent a likely if not altogether wholesome reuse of mall uses.
It’s a planner’s role to, if not mitigate the bad, at least have the good outweigh the bad. Using ghost kitchens as a way to renovate dying mall space and provide housing in high-opportunity areas is a viable way to do this. And if ghost kitchens do end up being only complementary to traditional restaurants in these sorts of areas, then the changing circulation patterns they represent can allow planners to extract value to put into the community and not just into the pockets of the Kalanicks of the world.
There was a nice quote in a recent Planning.org piece about main steets, warning against the idea that planners had to help businesses one-by-one:
A caution: helping individual small businesses alone is not going to lead to economic recovery. Urban economist Bruce Katz points out that places must recover as hives of commerce and community if individual small businesses are going to make it. Katz coined the term "regenerator" to describe place-based organizations that are the vital accelerators of recovery. Main Street organizations meet that test.
By the time this is published, hopefully state and local governments — including "regenerator" organizations — are benefiting from the American Recovery and Reinvestment Act, strengthened to stem the virus's spread and rebuild better.
There is a lot written about regenerating malls, turning them into lifestyle destination centers...so on and so forth. This blog post is, I suppose, more grist for that particular mill. But what I am hoping to do is a couple of other things at the same time.
First, I hope to show how a new commercial usage - ghost kitchens - can have knock-on effects that can support a region’s relatively low-wage population by giving them entry into high-opportunity areas serviced by ghost kitchens. I’m pretty pessimistic about the regional effects of ghost kitchens, on a dining scene and on a labor market, but I think there is a way to squeeze the most out of them if planners look at land use and circulation holistically and proactively.
Second, places are people. This is a bit of a recurring theme of mine: amenities are people, ghosts are people, and so on and so forth. People are affected by their material conditions, and its our role as planners to make the most of their material conditions. If there’s a big employer pushing gig work in a shopping mall, we can at least get housing, maybe green space and other amenities near that gig work so these workers can get better lives for their children and maybe organize for better conditions at work. If the gig work is in a bogus kitchen, maybe they can also do gig work in a dream kitchen. Solving labor problems one labor problem at a time can be excruciating, but developing the means for laborers to form and pursue their own solutions...maybe less so.
It’s a really hard time to be genuinely optimistic. A lot of times I find myself finding optimism in currently existing trends which...eh, not much easier. But part of the profession, the exciting part for me, I guess, is changing those trends and breaking the way space, labor, and value have these spiraling relationships. There’s a moment, here, for this in the incoming rise of ghost kitchens. And I hope the profession can seize on it.