Ghost kitchens boost revenue for struggling restaurants

Fueled by her faith, Miami janitor quietly feeds thousands

LATROBE, Pa. — For those who believe, ghosts come in a wide variety of forms: floating orbs of light, haunting voices or, as in the opinion of famed fictional ghostbuster Raymond Stantz, “a full-torso, free-floating apparition.”

As it turns out, so do “ghost kitchens”: food-world phantoms that put emphasis on flavor rather than fright. A ghost kitchen, or online restaurant, uses an existing business to create a new menu available almost exclusively through delivery, and frequently through third-party delivery services such as DoorDash, GrubHub, Postmates, Seamless and Uber Eats.

It’s all designed to create a new revenue stream for businesses without having to create a new storefront and dining space. Restaurants can offer new menu items — or entire restaurant themes — while saving on traditional costs of opening a new eatery, including square footage and waitstaff.

For Joe Wyant, training director at Valley Dairy Restaurant in Unity, the Taco Joe’s brand was a way to serve a different food via a different method.

“We have amazing burgers, so at first we thought, of course, we’re going to do burgers,” said Wyant, 50, of Kittanning. “But that was already being done through the restaurant. Pizza, wings, they were being done.”

He and Melissa Blystone, Valley Dairy Association president, looked at their restaurant locations and saw there were few, if any, nearby taco spots. They met with their food purveyors, “put our heads together and met with their chef to come up with a bunch of different varieties of taco,” Wyant said. “I must’ve gained 15 pounds tasting them.”

After the first week of running Taco Joe’s out of the Rostraver location, Wyant began making plans to expand to Unity and East Huntingdon.

“We’re trying to serve different types of customers than those who typically patronize Valley Dairy,” Blystone said. “From my perspective, it’s a win-win. We’re utilizing kitchen space as another way to serve the public.”

Gov. Tom Wolf in March temporarily banned indoor dining in Pennsylvania shortly after the coronavirus pandemic arrived. That forced businesses to embrace home delivery, curbside pickup and outdoor dining. Limited indoor eating resumed — as it did after another ban over the holidays, typically one of the busiest times for bars and restaurants.

All 50 states, along with Washington, D.C., have banned or limited indoor dining in some capacity as part of efforts to slow the spread of the virus, according to Open Table.com.

The U.S. restaurant industry was expected to rake in $900 billion in sales in 2020, according to the National Restaurant Association. The industry fell about $240 billion short of that goal.

More than 110,000 U.S. eating and drinking establishments closed — temporarily or permanently —in 2020.

But the industry grew in one sector during the pandemic.

Online delivery orders, either through third-party services or directly from restaurants, accounted for $45 billion last year — up from $30 billion in sales in 2017 and ahead of the $41 billion pre-covid prediction for 2020 from Alphawise, a data subsidiary of Morgan Stanley Research.

Restaurant sales through delivery and online orders advanced two or three years over original projections, researchers found.

The New York Times last week reported ghost kitchens worldwide could mushroom into a $1 trillion industry in the next decade.

Morgan Stanley predicted that the U.S. restaurant delivery business would grow to $220 billion by the end of 2020, and that was well before the pandemic.

Frank Halling, owner of PghGhostOne in Aliquippa, looked to be a culinary phantom from the start. If you weren’t picking up takeout, you wouldn’t even know his business is there.

“It’s just a blank building that’s a certified kitchen doing delivery and takeout through our third-party apps,” said Halling. “Basically, the ideal ghost restaurant is no (street) advertising, no sitdown, bare-minimum inside and outside infrastructure.”

Tim Tobitsch, owner of Franktuary in Pittsburgh’s Lawrenceville neighborhood, got into the ghost kitchen business after partnering with NextBite, which brands itself as a “virtual kitchen marketplace.” The Denver-based company set up Wiz Khalifa’s ghost kitchen, HotBox by Wiz, which operates out of Franktuary, as does the Grilled Cheese Society, another ghost kitchen.

“NextBite had 10 or 13 different concepts,” Tobitsch said. “My kitchen manager decided grilled cheese would be a good one to try out. It’s nice because it doesn’t require a lot of grill space, which is at a premium when we get busy.”

And while Franktuary can seat 90 people normally, Tobitsch said the delivery side of the business was already on the upswing before covid-19 made it a practical necessity.

City Works at PPG Place Downtown also found itself making the move from primarily sit-down to a wider variety of service approaches when its management team created the Secret Sauce ghost kitchen, focusing on barbecue.

“We’d been aware of ghost kitchens for some time, but when we realized that we could operate it out of our own footprint, that was a really exciting thought,” said Angela Zoiss, chief marketing officer for Bottleneck Management in Chicago, the restaurant group that operates the nine City Works locations nationwide.

Secret Sauce began at City Works’ King of Prussia location. Within two weeks, it spread to the Gaithersburg, Md., restaurant. The Pittsburgh branch opened Dec. 14.

“The upside is there’s no new overhead,” Zoiss said. “The staff is already there in the building working, and you’re letting your chefs get creative.”

At the local Smokey Bones franchises, culinary manager J.D. Rau said its Wing Experience began life as a ghost kitchen at its Robinson location, but quickly evolved and expanded.

“It started out only available through DoorDash or UberEats,” Rau said. “We’ve updated it since then so that folks can order it and pick it up curbside.”

Halling estimated 60% of PghGhostOne’s business comes through third-party apps such as GrubHub and UberEats.

“I realized it’s a little more challenging than what we first thought,” he said. “The third-party apps aren’t as friendly as we thought they were.”

At Franktuary, Tobitsch said each third-party service has its own digital tablet taking up counter space and posting orders. He decided to utilize a service called OrderMark to do a little consolidation and keep his kitchen running as smoothly as possible.

“It all comes into a single tablet and prints (meal) tickets. That streamlines things significantly,” he said.

Halling said that for PghGhostOne, the economics of a ghost kitchen work as long as the order volume is right.

“But you also have to be able to keep up with that volume,” he said. “When I’m naturally busy because of Lent and our Lenten-leaning menu — pierogi, fish sandwiches — I don’t really need the DoorDash and GrubHub business at the same time, so you can also get slammed from all sides.”

Tobitsch splits HotBox by Wiz and Grilled Cheese Society revenue with NextBite.

“They pay for all the marketing. We pay for the food costs,” he said. “It would be the sweet spot if I had the time to create my own concept and keep 100% of the revenue, but there’s something to be said for adding partners with a little more experience.”

The third-party apps, however, can occasionally affect restaurants who don’t even use them. Searching for Delmont pizza restaurant Ianni’s on GrubHub turns up what is clearly a Thai food menu, an issue that forced Ianni’s to post a recent Facebook message making it clear they weren’t affiliated with the listing.

When Taco Joe’s opened in late December, Valley Dairy was pleasantly surprised to bring in $1,000 the first week.

“We really leaned on social media,” Wyant said. “We did some stuff through Facebook, and got a lot of ‘where are you located’ questions.”

Blystone said the concept — serving takeout or delivery-only food from a restaurant’s kitchen that does not appear on that restaurant’s sit-down menu — occasionally has created a little confusion.

“You can’t come into Valley Dairy and order a taco,” she said.

Wyant said that ended up working to their advantage.

“You wouldn’t believe all the BS people were throwing at us at first,” he said. “They wanted to see the health certificate, just beating us up left and right. But it also piqued their curiosity when I answered all their questions.”

Halling said he’s considering chopping up PghGhostOne’s menu to create multiple ghost concepts.

“My menu is too big,” he said. “And if you have three or four ‘restaurants’ on those third-party apps, that’s more that’ll turn up when people search the area.”

Zoiss said Secret Sauce ghost kitchens account for 30% of City Works’ off-premises business.

“We’re really happy to see that, and it shows there’s definitely interest,” Zoiss said. “Right now we have six, and we plan to open more as we’re able to reopen restaurants here in Illinois.”

In addition to its use as an extra revenue stream, Tobitsch said the ghost kitchen is a market-driven creation.

“As a foodie myself, it’s not necessarily the food experience I’d want. But, ultimately, we answer to our customers, and certainly more and more people are choosing to order food that way,” he said. “I used to have a little animosity toward delivery-only services. But since we’ve had all these restrictions on dining, candidly, I don’t know where we’d be without them.”

Miami — Doramise Moreau toils long past midnight in her tiny kitchen every Friday — boiling lemon peels, crushing fragrant garlic and onion into a spice blend she rubs onto chicken and turkey, cooking the dried beans that accompany the yellow rice she’ll deliver to a Miami church.

She’s singlehandedly cooked 1,000 meals a week since the pandemic’s start — a an act of love she’s content to perform with little compensation.

Moreau, a 60-year-old widow who lives with her children, nephew and three grandchildren, cooks in the kitchen of a home built by Habitat for Humanity in 2017.

Her days are arduous.

She works part-time as a janitor at a technical school, walking or taking the bus. But the work of her heart, the reason she rises each morning, is feeding the hungry.

As a little girl in Haiti, she often pilfered food from her parents’ pantry — some dried rice and beans, maybe an onion or an ear of corn — to give to someone who needed it.

“Sometimes when you’re looking at people in their face, they don’t need to ask you,” she explained. “You can see they need something.”

Her mother was furious, constantly scolding and threatening Moreau, even telling the priest to refuse to give her communion. But she was not deterred.

“I told her, ‘You can whup me today, you can whup me tomorrow, but I’m going to continue to do it. ’”Decades later, Moreau is still feeding the hungry.

She borrows the church truck to buy groceries on Thursday and Friday and cooks into the wee hours of the night for Saturday’s feedings. Notre Dame d’Haiti Catholic Church pays for the food, relying on donations.

Moreau prepares the meals singlehandedly, while church volunteers serve or deliver them to shutins.

“Americans, Spanish, Haitian, they come here,” she said.

“Even when I’m closing, they say, ‘Please, can I have some,’ and I give it to them, because if they go home and have nothing it hurts my feelings.”

Moreau also feeds people back in her little village north of Port-au-Prince.

Despite her meager salary, she sends food pallets monthly to her sisters and brother, nieces, nephews and neighbors, telling her sister over the phone to make sure this person gets a bag of rice and that person gets the sardines.

Every morning before work, for the church’s staff, police and local community leaders, Moreau prepares a table with a special Haitian hot tea to ward off colds.

She lays out vapors to inhale and other remedies from her homeland believed to strengthen the immune

“If you give from your heart and never think about yourself, God will provide for you every day. The refrigerator will never be without food. ” — Doramise Moreau

system.

“She takes care of everybody from A to Z,” said Reginald Jean-Mary, pastor at the church.

“She’s a true servant. She goes beyond the scope of work to be a presence of hope and compassion for others.”

A few years ago when the church couldn’t afford to hire a cleaning crew, Moreau offered to do it for a negligible sum. She does it with a cheerful heart.

And until recently, she’s done it all without a car.

But last month, Moreau was surprised with a new Toyota Corolla topped with a big red bow.

As part of a local anti-poverty initiative, community leaders nominate residents known for community service.

The Martin Luther King Economic Development Corporation purchases the cars wholesale through a grant, and Moreau pays $125 a month and will own it after three years.

With her janitorial job and all her work at the church, people often ask Moreau if she’s exhausted.

But she says she is fueled by her faith.

“I can keep all the money for myself and never give anyone a penny,” she said.

“But if you give from your heart and never think about yourself, God will provide for you every day. The refrigerator will never be without food.”

(Pittsburgh Tribune-Review/Shane Dunlap) Valley Dairy employee Jen House and manager Alex Blystone (right) work on burrito bowl orders for their ghost kitchen business, Taco Joe’s, at Valley Dairy Restaurant in Latrobe, Pa.

Blystone heats up tortilla shells for a taco order.

Server Bree Hughes (left) gets a finished order of tacos from the kitchen from Blystone at Valley Dairy. The tacos are part of a new business model for takeout orders known as ghost kitchens, which can be ordered through Door Dash under Valley Dairy’s new taco business, Taco Joe’s.

(AP/Marta Lavandier) Doramise Moreau covers shredded malanga that will be served with baked fish to those that need a meal at Notre Dame d’Haiti Catholic Church in Miami. Moreau is a part-time janitor at a technical school. She spends most of her time shopping for ingredients and helping to cook meals for 1,000 to 1,500 people a week since the pandemic began. Moreau received a new car for her community service. She was nominated by the pastor at the church.

Moreau stands next to the new car she received for her community service at Notre Dame d’Haiti Catholic Church in Miami.