‘Ghost kitchen’ explodes across Asia

In a “ghost kitchen” in an industrial area on the outskirts of Taipei, a chef is cooking dishes that are not served at the restaurant.

Before Covid-19 caused an earthquake to the global restaurant industry, fast food delivery service to customers’ homes was very developed. But blockade orders and travel restrictions due to Covid-19 continue to make this industry boom in Asia.

The explosion of food delivery apps means that customers are used to being able to order restaurant-standard food delivered to their home quickly. To meet that demand, more and more restaurants are only opening food delivery services without serving them onsite, also known as “cloud kitchens” or “ghost kitchens”. Then the pandemic hit, making it impossible for billions of people to go to restaurants.

“The pandemic has really pushed the whole industry forward, really helping us,” said Jason Chen, chief executive officer of JustKitchen.

An employee of Taiwan's JustKitchen company prepares to bake bread for delivery food in Taipei on August 18.  Photo: AFP

An employee of Taiwan’s JustKitchen company prepares to bake bread for home delivery in Taipei on August 18. Photo: AFP

JustKitchen started operating the first “ghost kitchen” in Taiwan early last year. The company now has 17 locations across the island, one in Hong Kong, and is looking to expand to the Philippines and Singapore later this year.

The region’s delivery giants have also embraced this trend and opened more cloud kitchens across Southeast Asia since the pandemic began.

According to a report by Researchchandmarkets.com, the global “ghost kitchen” industry is expected to grow by more than 12% per year, worth about 139.37 billion USD by 2028. Asia – Pacific, the region has 4.3 billion people, accounting for about 60% of the international market share.

For many people in the region’s expensive, densely populated cities, it’s more feasible and easier to eat out at restaurants or eateries every day than at home. Research firm Euromonitor estimates 7,500 cloud kitchens are operating in China, 3,500 in India compared with 1,500 in the US and 750 in the UK.

Natalie Phanphensophon had to turn the business of her 45-year-old restaurant empire into takeout last year because of the pandemic. Her family owns the famous Mango Tree & Coca restaurant chain in Thailand, many of which are located in shopping centers with high rents but empty due to the pandemic.

Earlier this year, they opened their first cloud restaurant on the outskirts of Bangkok and plan to open two more.

“Our goal is to make sure every employee in the chain overcomes difficulties together,” explains the 35-year-old.

The profit that a cloud kitchen brings is less than that of a regular restaurant because people are less likely to order as many dishes as when going to a restaurant, but the operating costs are much lower.

iBerry Group, which operates restaurants and ice cream shops in most malls in Thailand, also opened a home delivery center.

“The cloud kitchen is basically an oxygen mask for us during Covid-19,” said Thitanun Taveebhol, brand manager at iBerry Group.

While corporations and restaurant chains turn to delivery, household cloud kitchens are also flourishing.

After retiring from Air India, Nirjash Roy Chowdhury opened a kitchen in Mumbai with his savings. He hired 6 people who used to work as hotel staff, the industry hit hard by the pandemic.

“They have nothing to eat. If I can give someone bread and butter in this way, there’s nothing like it,” the 61-year-old said.

Chowdhury estimates it will take six months to break even, but is confident the industry has long-term potential. “I think the cloud kitchen will survive,” he expressed.

Experts say this is the safe direction. Nailul Huda, an analyst at Jakarta-based Economic and Financial Development Research Institute, said that lower operating costs and home delivery habits of the tech-savvy younger generation will ensure growth for the cloud kitchen industry.

“People will continue to order food even after the pandemic, and I think ghost kitchens have the potential to grow rapidly after the epidemic is over,” he said.

Chen, director of JustKitchen, said the pandemic has changed the way people order food for home delivery. “Once you’ve ordered food online, you’ll get used to it and it’s hard to ignore its convenience. We’re optimistic about the future.”

Kwon Ohshin (right), owner and chef of Donkatsu Kitchen, and colleagues prepare lunch boxes in a rented ghost kitchen in Seoul on September 1.  Photo: AFP

Kwon Ohshin (right), owner and chef of Donkatsu Kitchen, and colleagues prepare lunch boxes in a “ghost kitchen” in Seoul on September 1. Photo: AFP

At a time when the food service industry has been hit hard, ghost kitchens help chefs, delivery drivers and wholesalers keep working. But they also give rise to another problem, the huge mountain of plastic waste.

A study in Bangkok found that plastic waste nearly doubled during the pandemic, in part due to the boom in food delivery. Leslie Tay, a food commentator, said ghost kitchens have “somewhat taken away the character or soul of the food”, but there is still space for them to thrive next to traditional restaurants.

“In the end, the quality of the food will say it all. If the food is good, people will start spreading the word,” Tay said.

Hong Hanh (Follow AFP)

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