Ghost Kitchens Have Totally Eclipsed Austin. What Does That Mean for the Local Food Scene?

Unless you’ve been living under a rock, one thing is clear: The Austin restaurant industry is wildly different from a year ago in no small part due to COVID-19. Throughout this period, businesses have gone to great lengths to reach customers that would rather just stay home, including signing up with vulture-like third-party apps. And, as nature took its course, delivery apps began to breed, well, delivery-only restaurants known colloquially as ghost kitchens.

Take, for example, Austin’s Chicken Salad Shoppe. When COVID-19 restrictions forced Vanilla Orchid catering to temporarily close last year, co-owners Molly and Ivan Mills decided to use their existing kitchen like a ghost kitchen through which to sell their chicken salads for pickups and deliveries instead. Unlike a typical restaurant, customers can’t casually stumble across it and grab a bite; instead, foot traffic is replaced by internet traffic. “The virtual kitchen has broadened our horizons and opened our minds to new ideas we haven’t had time to think about,” Ivan says. “It’s utilizing the space we have and leveraging that asset. I can’t really think of a more efficient way to run a business.”

Because Chicken Salad Shoppe is purely digital, the restaurant can change its menu in real time, adding or removing items as they see fit while also allowing them to experiment with ingredient combinations and stuffed-cookie flavors, without worrying about reprinting menus or adjusting points of sale. This model allows the couple to “get new ideas to our customers faster,” Ivan says.

Ghost kitchens like Chicken Salad Shoppe have flourished in Austin during the COVID-19 pandemic as delivery-only hubs for restaurants, food brands, and chefs to expand their customer base in new locations. The main function is to allow restaurants to widen their delivery radius — or launch entirely different outlets — without the high costs of opening a new physical location.

Because of these advantages, this business model has become ever more popular during the pandemic both in and outside of Austin. Large-scale ghost kitchen brands — like the national Cloud Kitchens and Kitchen United, and a soon-to-open local facility GhostLine Kitchen — had been in the works for Austin before the pandemic. But the timing of their openings — during a period when takeout and delivery were preferred — was just good luck.

Some say ghost kitchens are the future of the industry. But others fear this could be the end of independent restaurants and lead to a flattening of the food culture. What room is there for innovation when a big-name chef (say, one with spiky hair) can open a pop-up restaurant in every city?

However, during the pandemic, delivery needs are greater than ever before, as social distancing restrictions have kept many people at home. These kitchens exist to meet the growing demand for third-party delivery apps like DoorDash, Uber Eats, and Postmates, which have enjoyed exponential growth during the pandemic. Third-party delivery apps are part of a $35 billion industry, which is estimated to be worth $365 billion in the next 10 years. In fact, delivery orders have grown 300 percent faster than dine-in traffic, but restaurants are still losing out, ultimately.

But with no front-of-house staff to pay and tech-optimized menu options, it’s estimated that these ghost kitchens can cut labor costs by up to 80 percent and food costs by 50 percent, making them highly cost-effective.

Shalou Barth, the co-founder and CEO of forthcoming Austin shared kitchen space GhostLine Kitchens, finds the slashed costs appealing. “We are talking about eliminating the need for a $400,000-plus investment to launch a brick-and-mortar restaurant,” she says, bringing it “down to around $5,000 to $15,000.” She knows this well: She opened her own physical pizzeria in Austin, which she closed four years later.

Then there’s the benefit of a quicker turnaround. Barth estimates a traditional restaurant can take up to 18 months to launch, while a ghost kitchen can be up and running in just a few weeks, without a long-term lease or prohibitive loan debt. “A restauranteur can experiment with completely new concepts with essentially nothing to lose,” Barth says.

In addition to ghost kitchens, Austin has an abundance of commissary and shared-kitchen concepts that offer an alternative to the more predatory app-based delivery model.

The duo behind Austin-based commissary kitchen Wingman Kitchens, Max Kunik and Robert Strong, sees ghost kitchens as an unviable business model due to the crowded market. “There are hundreds and hundreds of concepts on all the delivery apps,” Kunik writes in an email to Eater. He explains how apps usually have restaurants bid for sponsored listings in order to make sure they appear on the first page. That, plus fees, makes it all “very expensive.” For Kunik, between the labor cost, rent, and high app fees, “the economics of [ghost kitchens] just don’t really make sense.”

Instead, as a commissary kitchen, Wingman, along with other like-businesses and shared kitchens, helps caterers, small restaurants, meal-prep companies, and food trucks grow their businesses affordably by offering shared prep space and storage with flexible terms, equipment, and, occasionally, assistance with permits and licenses.

Most food industry experts agree that these flexible formats — whether ghost or commissary kitchens — have a place in the future of the service industry. Barth sees them existing “symbiotically” alongside traditional restaurants.

“We can’t ignore how the pandemic has accelerated the growth of food delivery,” Barth says, “and ghost kitchens will allow restaurants to keep up with this increasing demand that will remain elevated even after COVID-19 is behind us.”

Reef Kitchens/Facebook

Read on to find a list of dark and shared kitchens in Austin.

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• Capital Kitchens: The shared kitchen company focuses primarily on consumer-packaged goods and beverages, though it also works with bakers, food trucks, caterers, and personal chefs. Some of their clients include Burnt Caramel Co. and Steamm Espresso. The site hosts regular “learning sessions” with experts to help bring information to small business owners. There are two kitchens in Austin.
• Cloud Kitchens: The company is one of the leading dark kitchen brands in the country, started by Uber co-founder Travis Kalanick. The Austin location opened early this year, and includes 25 ghost kitchens. While the tenant list confidential, it includes Thai ghost kitchen Charoen Express and Hainanese chicken restaurant Mother Klucker
• Commercial Kitchen Factories Austin: There are three Austin locations of the commissary kitchen company, which offers all the expected amenities, plus a few perks. Beyond the typical kitchen equipment and storage space, there are on-site offices, demo spaces, private showers, and access to PR specialists for tenants.
• GhostLine Kitchens: This brand-new commissary with an emphasis on technology is expected to open this year, with a mix of ghost and shared kitchens. The company will accommodate growing businesses like caterers, wholesale bakers, and farmers market producers, in addition to virtual concepts. Eight of the ghost kitchen areas have walk-up windows, so people will have the option to collect their meals directly, in addition to delivery.
• Hana Kitchens: This multi-location commercial kitchen exists in New York, California, and Austin. In addition to renting kitchen space, the company can help with packaging, distribution, recipe development, and permitting.
• Just Add Chef: Operating since 2000, this is one of the oldest commissary kitchens in Austin. The company offers affordable preparation and storage space for mobile vendors, specialty food producers, and caterers. Austin restaurants the Peached Tortilla and Franklin Barbecue were both tenants in the past.
• Manon’s Shared Kitchen: This family-owned commercial kitchen provides prep facilities for food trucks and small businesses. There are 8,000 square feet of private and shared space, with flexible pricing as low as $10 an hour. Their tenants include food trucks Sammataro, SXSE Food Co., and Abo Youssef, and will house Laotian restaurant Mama Noy’s Kitchen, which closed its Hana World Market stall.
• Prep ATX: The commercial kitchen company is expanding into Austin this spring, which would be its first location outside of Georgia since its launch in 2014. This new facility will be the largest in Texas, with 42 private kitchens, 16 shared kitchen stations, and 16 spaces for food trucks, all spread over 55,000 square feet. Prep ATX will also feature dine-in areas for guests to enjoy food on-site. The Austin roster isn’t fully finalized, but it includes food truck Brooklyn Breakfast Shop. Some of the existing clients in Atlanta are familiar names, like Planet Smoothie and Jamba Juice.
• Reef Kitchens: Founded in 2019, this Miami-based company has more than 100 locations. The ghost kitchens are found in either refurbished shipping containers or mobile trailers, which are housed in parking lots across the country. Some of their highest-profile clients are Barilla Pasta Kitchen, Wendy’s, and Rachael Ray. Man vs Fries operates its Austin virtual brand through this company.
• SmartFood Kitchen: The Austin shared commercial kitchen has been providing affordable rental space for sustainable, health-focused food producers for over six years. In addition to kitchen space, it also offers nutritional advice and cooking classes for individuals.
• The Cook’s Nook: The Black-owned space was founded by Joi Chevalier, the first African-American woman to run for Texas comptroller. Using her political and corporate experience, she has created a space that serves as an incubator for burgeoning food businesses, a consulting partner for corporations, a food-service provider for schools and charities, and a community leader that works with local government to improve Central Texas food policy and access. The Cook’s Nook is also passionate about telling impactful stories about African-American foodways. Some of their tenants include Culina Yogurt, Pennymade, and Wunder Nuggets.
• The Green Cart Kitchen: The Austin brand, which includes a deli, a pantry, and catering, added a 2,000-square-foot professional commissary kitchen to its lineup in 2010. They’ve worked with local companies like Bennu Coffee, Fete Accompli Catering, and GFY Kitchen.
• Kitchen United Mix: The ghost kitchen hub has locations in Chicago; Scottsdale, Arizona; California; and right here in Austin. The company works with dozens of national brands like Dog Haus, P.F. Chang’s, and Fatburger, and local ones like Bao’d Up and Bombay Walla. They offer on-site pickup and delivery, and you can order from multiple concepts on the same bill.
• Wingman Kitchens: This shared kitchen was founded by industry veterans Max Kunik and Robert Strong. It has the capacity to run ghost kitchens, but the duo prefers to focus on helping food entrepreneurs grow their businesses. Their list of clients includes ATX Hot Sauce, You + Brie, and Pretty Thai.