Ghost kitchens here to stay in ABQ

The restaurant was fake, but the chicken was real.

It’s been four years since the COVID-19 pandemic started and a lot of business practices changed with the expectation that things would go back to normal. But food delivery and virtual kitchens may not be going anywhere.

One of those COVID-era business practices that seems to have taken hold is the rise of so-called ghost kitchens, when restaurants pose as nonexistent restaurants and sell their food through other virtual brands, giving them a possibility to lure in more customers. There are many examples of such establishments in Albuquerque.

Alisha Binkoski is the director of marketing at Kelly Foods Corp., which owns eight chain restaurants and 23 brick-and-mortar locations, including Craft Republic in Albuquerque. The restaurant’s kitchen makes food for its own guests as well as for four other virtual brands, or ghost kitchens, that can only be ordered through apps like DoorDash.

Multiple brands increase the likelihood of a customer selecting the restaurant, Binkoski said.

For example, Binkoski said one of Craft Republic’s virtual brands is called Local Pizza and Wings. If customers are scrolling for new pizza joints, they might stumble onto the unfamiliar brand and give it a go.

“So when people are searching on the app, it’s right there,” she said.

She said that the virtual kitchens make up 17% of the sales at Craft Republic.

“I thought it would have tapered off,” she said.

Jean Hertzman is the director of the school of Hotel, Restaurant and Tourism Management at New Mexico State University. She said a customer doesn’t know where food is coming from when they order it, and the person “probably doesn’t care.”

The Journal reached out to the Albuquerque Foodies page on Facebook to get a sense if people cared. In less than a day, the post received more than 50 responses, ranging from people not knowing what a virtual kitchen is to condemnation of the practice.

MaryAnn Schaefer called it deceptive.

“If I wanted to order from Chili’s, Denny’s, Peter Piper Pizza, I would,” she wrote.

In an interview, Schaefer said she was tricked once, and now she checks every time.

Jens Smith said ghost kitchens “offer an opportunity for small startups to get a foothold in the market.”

Ashley Hartshorn wrote on the post that she didn’t mind if it’s a ghost kitchen as long as it’s clear.

“If it’s clear upfront it’s a ghost kitchen, then whatever,” Hartshorn replied.

Some food delivery apps like DoorDash mark kitchens as virtual. But other apps like Grubhub and Uber Eats do not, neither does third-party site Yelp.

Deliver drivers also responded to the Journal’s post, and many said they find it hard to pick up food at ghost kitchens. Sometimes, employees don’t know they are preparing food a virtual brand, or customers complain upon delivery.

“I won’t pick them up anymore,” delivery driver Myriah Dimitt wrote.

Chris Arias is an account representative at Uber and told the Journal via Messenger that Uber knows what restaurants are ghost kitchens, as the company requires a license from the Department of Health.

He also said driver confusion rarely happens because the app tells drivers that a ghost kitchen operates under a brick-and-mortar restaurant.

However, he said a lot of the virtual kitchens have closed down. He said 5% of Uber food deliveries are from ghost kitchens.

Trying out ghost kitchens

The Journal ordered food from Craft Republic’s four virtual brands: Two classic grilled cheeses from American Grilled Cheese Company, a Nashville hot chicken pizza from Local Pizza and Wings, a Nashville hot grilled cheese from Nashville Hot Chicken Shack and the Nashville Mac Philly from the Philly Cheesesteak Company.

The DoorDash app showed that the drivers were picking the food up from the same location: 4301 The Lane at 25 NE, which is where Craft Republic is.

Virtual kitchens don’t exactly make the branding distinct. The pizza ordered from Local Pizza and Wings was branded Craft Republic, while the rest of the orders were labeled as American Grilled Cheese Company. Despite the fact that two of the menu items ordered are not on the American Grilled Cheese menu.

The dishes had a striking similarity. The mac and cheese on the pizza and cheesesteak was the same type of noodle. The bread from American Grilled Cheese Company and Nashville Hot Chicken Shack wasn’t noticeably different. The hot chicken tasted the same on all the dishes.

How ghost kitchens came to popularity

Food delivery apps existed before the pandemic. In fact, DoorDash was started in 2013.

However, Hertzman said the apps grew in popularity during the pandemic.

“Having delivery services was great for food operations because they could continue to make some revenue,” Hertzman said. “Their kitchens were slower during COVID. They had space that could also produce recipes for other companies.”

Virtual kitchens and app delivery went hand in hand. Some celebrities even opened their own virtual kitchens. For example, Albuquerque’s Buca Di Beppo prepares Mr. Beast Burger, a virtual brand started in 2020 by popular YouTuber Mr. Beast.

Hertzman said using a pre-existing up-to-standard kitchen minimizes personal investment costs for anyone starting a restaurant.

Not every virtual brand has a celebrity sponsor. Kelly Food Corp. makes all of their virtual brands in house.

“Partnering with celebrities just didn’t make sense for us,” Binkoski said.

She explained that the company already shares a cut of sales with the delivery service apps, and they are not willing to share additional revenue to get a celebrity brand.

Kelly Foods has 11 virtual brands and is planning to debut another virtual brand soon, trialing it at Craft Republic. The coming brand doesn’t have a name yet, but it will be themed around calzones.

Hertzman said she anticipates virtual kitchens to stay around on a small scale.

“There are too many benefits of it for it to go away totally,” she said.