A story in 3 acts
Once upon a time…The Selzer Man & Ghost Kitchens.
You may have heard of our most recent Hoteliers Guild initiative called EXTRAVAGANZA culinaire, the premiere virtual Gourmet Safari, which was in fact “inspired” by Corona, and so far had more than 20.000 viewers and excellent feedback from colleagues around the globe.
In my foreword to Vol. III I wrote: “Our virtual event showed that there is so much untapped ‘virtual potential and space for both, virtual experiences as well as the in-person hospitality. Take-outs and curb-side pickups have become natural, as have virtual cooking demonstrations and classes. So let’s think how we can push these ideas further? For example, can we create a virtual restaurant concept that can be a partner business to our traditional concepts? Restaurateurs have to serve and take care of other people. But it this cannot be done in person, one has to figure out other ways and means...”
In preparation for this speech I contacted our HoteliersGuild members for their insights, knowing that for many of our colleagues, restaurateurs and/or hotel restaurants alike, take-out concepts have been the only way of survival during the the time of Covid-19. I could summarise our predominantly expressed opinion right now and here, and thus save you reading time.
We agree that as long as no solution is being found for the plastic pandemic caused by the totally unsustainable packaging & distribution methods of this concept, we are very sceptical, to say the least. Let me share my exchange on this subject with Jason Friedman, CEO of TayloredHospitality that manages branded properties like the BensleyCollection/ShintaMani Hotels, the Rosewood Retreat in Luang Prabang among others , will further under line our apprehension.
Here's what he said:
“When I was growing up in Manhattan in the 1970’s and 1980’s I still remember the seltzer man. Once a week this old man would show up at the service entrance to our apartment on the 10th floor with a case of blue glass soda siphons. The siphons and the wood crate must have been 30 or 40 years old. Dutifully we would place the empty siphons in the new crate to be picked up the next week when the seltzer man would return with the weeks delivery. Perhaps a update versions of the seltzer man would be required to work with restaurants and distribution networks. A generally accepted standard for reusable food containers that all restaurants and distribution services would sign up to use. A deposit is made and the distribution service tracks the item with the deposit inly being credited to the guest when their container is returned (clean) to the distribution service, and this might happen on the next delivery. I am sure that some tech company can figure this out. The responsibility should fairly and equitably fall on the shoulders of all stakeholders - consumer, restaurant, distributor. Unless this issue is addressed in a suitable manner (not window dressing) this venture is a false economy. “ To which I responded: “I grew up in Bavaria, Germany, and I can mirror your Selzer story with our beer delivery experience: once a week, a horse cart loaded with wooden barrels of beer & crates which were still much older than yours appeared in our street, and the farm in a battered metal reusable can with a wooden handle...”
This opinion is also supported by many “classic” Chefs we know - for example 2- Michelin Star Dimitris Katrivesis, our HoteliersGuild Chefs Chapter member from Greece who is adamant that he’d rather stay away from adopting the Cloud Kitchen concept as he not only fears for its impact on the environment but, as he puts it to me in our last phone conference, he’d “also loose his ethical personality as a traditional Chef.“
II. Ghost Kitchens - After the Virus Pandemic, we’re facing the Plastic Pandemic
What is in fact a Ghost Kitchen and what’s the hype surrounding the new concepts? It all started with the Millennials and the Gen Z-ers - tech-savvy generations shifting the prototype of businesses towards a virtual world. Trends like virtual gaming and virtual shopping paved the way for the “virtual” restaurants. Essentially, a ghost kitchen (aka “virtual kitchen” or “cloud kitchen”) is a rented kitchen space where restaurateurs can open a restaurant or a brand without a brick and mortar location. These “restaurants” don’t even need to have a physical address, mostly they are simply an app on your smartphone. The demand for delivery of meals during Covid-19 has never been greater with more consumers turning to delivery over take-out or dining out. They are purely virtual businesses that are specially designed for food delivery and outsource the preparation of their meals to canteen kitchens. While our classic hotel restaurants and also independent restaurants struggle with high expenses for local rent, FF&E and of course cooking and service staff, the cost factor for virtual restaurants is incomparably lower. These shadow kitchens deliver their food only through intermediaries such as Deliveroo, Foodora and Co. and numerous investors already believe in this segment.
Many restaurants have essentially been forced to become a ghost kitchen over the past months, merely as a means to stay alive, and of course owners and chefs realised its potential. Smart hotels reinvented their F&B facilities as grocery shops and delivery services, meaning that those who are fed up with the weekly food shop, and are pining for the laid-on luxury of a hotel until they can check in again, can at least bring some of the joy home.
In a nutshell, ghost kitchens exist to satisfy the ever- growing consumer demand for easy online ordering. In a post COVID-19 world, restaurants of all types will have to take a long hard look in the mirror to decide what the next chapter is. It may well be that this catastrophe could trigger a shift in guest behaviour that may be beneficial to those who make the right decisions now!
However, it’s not even necessary to become 100% virtual in order to enjoy the benefits that a ghost kitchen can offer. Some of our colleagues concluded that the best approach is actually a hybrid. The hybrid allows them to test the waters of a food concept without fully committing or losing their restaurants physical presence. If the tide starts rapidly changing to virtual-only, they’ll find themselves in a strategically advantageous position.
And coming back to the topic of RESILIENCE and new concepts, think about this: A classic restaurant could easily integrate a cloud kitchen! How? Take for example Chicago’s Oyster Bah, where you’ll be treated to delicious seafood dishes. Yet, although Oyster Bah is typically packed on any given day, it’s not oysters bringing in the big money — it’s the ribs. Oyster Bah is home to a ghost kitchen by the name of Seaside, which offers ribs and fried chicken to consumers through 3rd party delivery apps like Grub Hub and Uber Eats.
In order to increase sales at the restaurant, the owner knew he needed to think outside its walls. With all seats being taken, his production could have been much higher but he was restricted by the restaurants small space. So the question was, how to increase efficiency without adding more seats? The answer: delivery. But not just Oyster Bah delivery —that was already happening. Rather, he wanted to create a restaurant-within-arestaurant that would offer items customers couldn’t get at Oyster Bah. With that, Seaside’s was born. The carryout/delivery-only outfit serves ribs, fried chicken, lobster, and sides, which are delivered by the restaurant delivery service DoorDash and Grubhub. The owner says: “The real trick when you open a business, either beside or in the same market as an existing business, is you don’t want to cannibalize your own consumer,” “It’s never more evident than when the two businesses share a spot.”
So, whichever way you look at it, ghost, virtual or delivery-only restaurants - these business models for food to-go are here to stay! Why? Because its big business!
And now, THE PLASTIC Packaging PANDEMIC
As we all know, the recent lockdowns have led to a boom in e-commerce. In March, as parts of Europe and America shut up shop, some 2.5bn customers have visited Amazon’s website, a 65% increase on last year. In China, more than 25% of physical goods were bought online during the first quarter of the year. Much of what is bought online comes wrapped in plastic—and the bad kind at that. Goods are often packaged in plastic comprising several layers. That keeps the contents safe in aeroplane holds and on delivery lorries. It also makes it nearly impossible to recycle the plastic. At the same time, the locked-down masses have been consuming home deliveries from restaurants in record numbers. First-quarter sales at Uber Eats, one of America’s biggest restaurant delivery apps, for example, rose by 54% year on year. Every extra portion of curry, or pot of garlic dip, means more plastic waste. Beverages come, of course, also in plastic bottles, preferably for single use. Latex gloves and disposable face masks add to the disaster.
Reliable data are hard to come by but, for example, consumption of single-use plastic may have grown by 250-300% in America since the coronavirus took hold, according to the International Solid Waste Association (ISWA), which represents recycling bodies in 102 countries. Our increasing appetite for single-use plastic is worrying, and it seems that tendencies to recycle materials that can be reused is diminishing. III. So, let’s put the focus on some potential sustainable solution scenarios . Obviously, packaging takeout food in the before mentioned scenario is an important condition for food to enter the market. The impact of food packaging on the environment is staggering.
With the consumer demand for delivered foods, snack foods and frozen food and other convenience food is increasing, the demand for packaging is huge. It consumes our limited natural resources, and produces all kinds of waste. Not only to the surrounding environment pollution, but also as a threat to human health.
Developed countries have been aware of the seriousness of the problem of packaging for environmental pollution since 1960s. The direct or indirect impacts of packaging on the environment include soil degradation, water pollution, and the sharp reduction of scarce resources such as forests, solid waste pollution and toxic chemical pollution. It seriously affected the sustainable development of resources and environment.
Quite a lot of the food packing materials come from China. According to statistics, about 60% of China’s food packaging materials there are security risks. In the food market, used in plastic bags, plastic bottles, plastic barrels of food packaging accounted for the majority. Paper, metal and other packaging materials accounted for a minority. The lack of knowledge of food packaging materials and food quality and safety oversight is not enough, and some packaging materials containing toxic ingredients are processed into food packaging. These affect food safety. Environmental awareness needs to be enhanced to promote the role of resources, and environmental protection should not be underestimated.
After a two-month delay, the EU Commission unveiled its Farm to Fork and Biodiversity strategy in late May with the aim of creating a more ‘robust, secure, and sustainable food system’.
According to the Commission this is the “first time in the history of EU food policy that we propose a comprehensive agenda for all stages of food production”. It lists 27 measures which it says will pave the way for greener food production, healthier and more sustainable diets, and less food waste.
Sounds good to me, as the strategy sets concrete targets to reach by 2030, including a 50% cut in the use and risk of pesticides, a 20% cut in the use of fertilizers, a 50% reduction in sales of antimicrobials used for farmed animals and aquaculture, and a target to increase the size of EU's agricultural land dedicated to organic farming to at least 25%.
And finally - will this crisis cause a Renaissance for Hotel Restaurants?
Speaking from experience in all of our hotels, we paid great attention to sourcing the best Chefs and to provide highest quality cuisine - not only to of course satisfy our resident guests, but to attract outside diners and to use our F&B operation as a strong marketing & sales tool...I think it’s a good time to promote in-hotel restaurants, and I am absolutely convinced that if we do it really well - and particularly in this situation, I believe people are feeling a lot safer in hotels. Both locals and tourists will be looking very closely at everything over the next year and beyond where they are staying, and where they want to dine, especially where hygiene and acceptable social distancing availability is concerned. Guest will find trust and faith in the strong brands. They’ll prefer to stay in their cocooning little bubble instead of running out the door and enjoy the excellent facilities, the produce and products and the reputation of our hotels.
Therefore, if we do it well, we’ll see a renaissance – back to the good old days (20 or more years ago) when all the best restaurants were all in hotels. We lost many of them but now is the time to win back their patronage back!
Our hotels are arguably better equipped to cope with the economic pressures of 2020 than most of the independent restaurants: We are not paying rent for the restaurants and bars as they are within the footprint of our hotels – we don’t have separate energy and maintenance bills and we have shared back of house services with accounting etc. We can afford to have more staff, we can afford to have higher quality products, we can charge less coming out of this thing because we’re not carrying so many of those fixed costs. I think we have a chance to win back some of that trust and loyalty from consumers and guests.
If you go back in time all around the world, the hotel companies would go out and find the best chefs and pay them massive amounts of money, they could invest a lot into the fit-outs, they had a well-trained staff, they would have an army of people; they could afford to have the best of the best in charge.
A great opportunity for younger entrepreneurs and chefs to start something new and to feed on the now ready market. Well, we now can capture back a nice chunk of business! However and obviously, outside restaurants can and will also 'execute their own renaissance’ after the crisis, even though the ones in hotels with their lower overhead and proximity to guest rooms will probably find themselves at an advantage.
Restaurants, chefs and third-party delivery companies are being given a unique opportunity to try out new ideas and enter new geographical regions with little overhead and little risk. With tech giants like Google and Amazon investing in ghost kitchen startups and delivery services, the time is ripe for the concept to grow legs - it’s big business. So yes, we’re already seeing a paradigm shift in how restaurants get started, and in how they operate. Restaurateurs wanting to get in the game will have immense opportunities; it will just look a lot different than it does today. However, it does not change our opinion regarding its negative impact on our environment. We definitely prefer our sustainable approach, and I personally would encourage Chefs to pursue to broaden their horizon and also explore what the insect cuisine has to offer - but that’s for a different speech and I thank you for attending this event!
Stay healthy & confident!
