Throughout the pandemic, we saw a marked increase in restaurants pivoting towards delivery services like DoorDash, Uber Eats, and GrubHub to recoup lost revenue. Customers spend, on average, between $195 and $323 per quarter on delivery and takeaway. By 2029, the food delivery sector is expected to reach $320 billion.
Despite the instability foodservice and hospitality businesses faced over the past two years, there's optimism about what the future holds. The foodservice industry is projected to reach $4.1 trillion globally by 2026.
With these numbers, restaurants, fast food chains, and other foodservice providers will use central kitchens to serve an ever-increasing customer base. Because of their low barrier to entry, these facilities offer a way for businesses to reduce food and labor costs and scale production.
Unlike traditional restaurants, central kitchens are not customer-facing. Instead, restaurant groups, food trucks, and independent operators use these facilities to execute their menus on a larger scale. Central kitchens present new opportunities for food operators to prep, produce, and distribute food for delivery or pick-up.
With the explosion of third-party delivery apps, food and beverage (F&B) brands can serve younger generations of customers who don't balk at spending heavily on eating out. Restaurant chains and hospitality brands also benefit from these facilities since central kitchens process, store, and later deliver food to distant locales.
By definition, central kitchens allow almost complete control over food production, from product delivery to meal assembly. Since the process takes place in one location, this ensures higher quality standards across multiple menus, concepts, and events. But these aren't the only benefits foodservice operators get from incorporating these facilities into their business model.
With centralized kitchens, start-up costs are much lower compared to full-service restaurants. Rent is reduced because instead of using an entire building, restaurant operators have the option to use only the space they need.
The National Restaurant Association reports that 9 in 10 establishments have less than 50 people on staff. Most of this is split between back and front of house (BOH and FOH) employees. Because centralized kitchens don't directly serve customers, there is no FOH overhead. Businesses can focus on bringing in the right cooks, chefs, and other back of house talent to operate their kitchens.
Larger volumes mean teams have to bring their "A" game. There isn't much room for error when preparing food under pressure. One major benefit of central kitchens is that they automate the production process, enabling cooks to focus on maintaining consistency and quality.
Businesses can rent out their spaces to food truck operators, catering services, and other F&B operators. It's a win-win on both sides. The renters reduce the overhead associated with opening a full-service operation. And for central kitchens owners, it's a very convenient way to generate additional revenue.
And when teams can work in facilities optimized for performance, businesses can reap the rewards of using central kitchens to expand their operations.
As consumer spending continues to tick up and food and beverage business sales increase, businesses will naturally want to keep this trend going. Companies like DoorDash are partnering with fast food brands like Little Caesars, Wendy's, and McDonald's, using central kitchens quickly expanding throughout the US and elsewhere. Meanwhile, other businesses in this sector are using these facilities to increase profits.
Catering companies, chefs, bakers, and even larger companies like Zuul and Kitchen United operate within one building under the shared kitchen model. This helps to save on costs and enables smaller businesses to grow on their own terms.
Ghost kitchens have created new opportunities for fast food chains, unique restaurant concepts, and even hotels to expose new customers to their menus through food delivery apps. During the pandemic, the ghost kitchen model reduced costs for struggling businesses and provided a new avenue for growth.
Colleges, universities, and workplace cafeterias, among others, use centralized kitchens to serve larger groups of people. In addition, businesses use commissary kitchens to supplement other restaurants, food trucks, or other establishments that may need to have food prepared in bulk off-site.
As businesses continue to evolve how–and where–they serve customers, they’ll look for alternatives to traditional brick and mortar construction that eat into budgets and revenue.
There aren't signs of things slowing down for the foodservice industry any time soon. The pandemic led to customers embracing food delivery apps and businesses seeking alternatives to operating full-service restaurants.
ContekPro enables restaurants, hotels, and other foodservice businesses to maximize their central kitchen capabilities using an all-in-one commercial solution.
We manufacture modular kitchens built for the speed, flexibility, and volume teams require to keep up with demand. Each ContekPro unit is pre-assembled in our off-site facility and delivered fully equipped, making it easier for foodservice operators to get their centralized kitchen up and running quickly.
Discover how ContekPro's Precision and Bolt series kitchens can help you—and your team—do their best work.