January 23, 2017

NYC restaurants are ghosting us

See, Leafage is just one of the “ghost restaurants” created by the company Green Summit, each with its own unique menu and branding, all operating out of the same kitchen in New York.

It’s Thursday night in Manhattan, and you’re craving a Cobb salad. So, you open up GrubHub, check your options, and end up choosing Leafage, a salad shop near Grand Central.

Here’s what you might not realize, though — that salad shop doesn’t exist. At least outside of the internet.

See, Leafage is just one of the “ghost restaurants” created by the company Green Summit, each with its own unique menu and branding, all operating out of the same kitchen in New York.

Umm… how does that work?

Green Summit employs around 50 chefs between 2 commissary kitchens in NYC to whip up entrees side-by-side for each of its 8 virtual restaurants, including Leafage (salads and juices), Butcher Block (sandwiches), and Maya Blue (Mexican).

The company’s delivery-only model (outsourced via Seamless and GrubHub) allows them to leverage economies of scale across their brands by producing food en masse by category and shared ingredients, rather than as one-off orders.

And, without brick-and-mortar…

They can fail fast and rebound faster.

For example, when Green Summit scrapped a Middle Eastern concept after lower-than-expected sales, it only cost them about $25k to pivot since they didn’t have to fire staff or buy their way out of a lease.

This ability to fail and switch strategies quickly means they can adapt current menu offerings to keep up with new dining trends, like poke bowls (so hot right now), instead of wasting time and money during turnover.

Outsourcing delivery is smart, too

From the end user’s perspective, ordering food on a smartphone is a piece of cake. Chicken fried rice. Boom. Click. Send. Wait 30 minutes.

But it’s not that simple. In fact, delivering food — and doing it well — is extremely hard, particularly in big cities like NYC where order volume is through the roof.

It’s expensive, too. Just look at companies like Munchery and Maple, both of whom opted to run delivery in-house and have since struggled to get their margins under control (in 2016, Maple lost $16m of its $40m in revenues to operating costs).

So kudos, Green Summit. Way to stick to your strengths. Now, if you could send over 4 juices, 2 garden salads… just kidding, we’ll take 3 burritos and the biggest sandwich you have.

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