Among pandemic trends, the food hall arguably made the least amount of sense. When the 6-feet-apart standard became commonplace, pre-pandemic excitement toward community-oriented dining faded away.
But that didn’t mean that food halls simply disappeared. Instead, many existing halls found refuge online, while many other operators saw potential in creating virtual halls that re-created the diversity of food options in one centralized location.
Take Fine-Drawn Hospitality founder Branden McRill as an example. As head of the Philadelphia-based hospitality group that owns full-service restaurants like Walnut Street Café, The Post, and Sunset Social, McRill knew the company needed to pivot in order to drive sales. So he created virtual food hall The Commons.
“We immediately realized that people didn’t really need us to stay on brand,” he says. “[Customers] were happy that we were deviating. They were happy to see what new things we were creating.”
The Commons centralized ordering for the three full-service concepts, but the online hub also included four virtual concepts: Mediterranean concept Agea, French-style roast chicken brand Ghost Chicken, Maude & Mabel’s Fine Creamery, and Philadelphia Wing Shop. One of the biggest outcomes from the virtual food hall, McRill says, was the ability to test the staying power of new concepts. He says a few months of renting a ghost kitchen only requires $10,000–$15,000—a small investment compared to the $250,000–$500,000 cost of starting a brick-and-mortar quick-service restaurant.
McRill’s vision is to ultimately have 10–12 concepts, some being permanent and others rotating in and out every few months or so. This model of operation would keep customers coming back by offering a set of classic brands, as well as some fresh, exciting options.
“The way that people eat has shifted,” he says. “I want to encourage anybody who is an operator to figure out how to keep their vision going, but embracing technology, embracing delivery, embracing off-site. Because that is going to be people’s habits, at the very least, for the next three to five years.”
Food halls’ pivot to the virtual space has potential for brands targeting individual customers, but also larger groups of consumers, as well. This has been a driving force behind ghost-kitchen operations and technology company Zuul, which originally provided space in New York City for brands to carry out first-party and third-party delivery orders. But in September, the company expanded into the food-hall category with Zuul Market.
Zuul Market brings its restaurant partners together in one digital platform, and then sets up delivery drop points around the city. By partnering with companies and landlords and establishing them as drop points, Zuul lets employees and residents order from multiple restaurants in the same delivery.
“For us, this idea started off from our instinct that we had something really unique about all of these delivery-only restaurants operating side by side, and that we could leverage that to create a differentiated experience for consumers,” COO Kristen Barnett says.
One thing that’s interesting, Barnett adds, is understanding the interaction between customers and virtual food halls moving forward. Though virtual food halls are a pandemic-driven innovation, the creation has the potential to disrupt the state of the delivery space. Landlords who may have had delivery carriers frequent their buildings throughout the pandemic may start to think about how they can make that a part of their building experience. Barnett says she’s had conversations with landlords who are excited to partner in a way that drives value to tenants.
Central Kitchen owner John Plew is still adjusting to his food hall being virtual only. “Being in an expo window, you turn around and you’ve got a full screen of food,” Plew says. “When you just start hearing the boards go ‘ding, ding, ding, ding,’ and you look back and there’s no one in the dining room, it’s a different feeling.”
Unlike Zuul, the Portland, Oregon–based food hall has a brick-and-mortar building for customers to use once COVID restrictions are lifted. Plew and chef Keith Castro conceptualized the food hall primarily as a way to bring groups of people together, with floor plans that include a bowling alley and arcade, along with six restaurant concepts. For now, guests can order for curbside pickup through its website, or delivery through the third-party services.
Central Kitchen will be back up and running as a brick-and-mortar food hall once it’s safe. “I think the big question on a lot of operators’ minds is this: What happens to the percentage of sales, post-pandemic, of pickup and delivery?” Plew says. “We believe, when it’s safe for everybody to go out dining, there’s going to be a huge swing [to in-person dining]. Huge.”
There will be a learning curve for those food halls returning to brick-and-mortar service. One is labor deployment; Plew says the online muscle Central Kitchen has picked up during the pandemic could help it see exactly where customers are located in its multiple-story layout.
Castro says the virtual food hall model has given customers the opportunity to experience something during a pandemic that they could enjoy with their friends at home. But it’s also been a low-cost way for operators to continue selling food, and as the pandemic has put many in the restaurant business of work, having an efficient way to stay in the industry has been crucial.
“You’re seeing a lot more chefs that really can’t afford to pay rent anymore on their buildings and are going into the ghost-kitchen space. So you’re going to see some good talent there,” Castro says. “It’s only a matter of time before they [get] together and put together some food halls.”