In addition to Piestro, 800 Degrees decided it was best to develop a solidified ghost kitchen partnership, an idea that's fast become widespread in recent months. In fact, the U.S. had roughly 1,500 ghost kitchens in July 2020, according to data from Euromonitor. After the pandemic began to lighten in 2021, 800 Degrees began discussions with REEF Kitchens, a company that provides turnkey delivery solutions by transforming mobile trailers into high-efficiency kitchens.
The two sides eventually agreed to open 500 delivery locations across the U.S., Canada, and other international markets in the next five years. The first outlet opened September 17 in the Miami market. Lee isn’t sure yet on the pace or specific geographies, but he can guarantee that 800 Degrees has a well-developed supply chain and that it can move as fast as REEF can.
The brand identified REEF as the ideal partner because of its capital and aggressive nature, Lee says. The company was also attracted to REEF’s business model in which it operates all of its ghost kitchens. As the pizza CEO says, “The fewer operators you have, the more likely you're going to be consistent and drive a consistent product.”
“Being I guess you could call us a brand with a small footprint, but a large shadow, we wanted to grow as fast as we could, and we felt with some of the changes we're making to our menu, into our offerings, that we offered a real opportunity for REEF to grow the brand with us,” Lee says. “And with their capitalization, with their size, with their aggressiveness, we felt like they were really good partners for us.”
“With every partnership, you have to have a good connection, and we felt like we had a great connection with these guys,” he adds. “They have a great culture, they have a great business, they're growing, and we wanted to be a part of that.”
Traditional growth is on the table, as well, the CEO says. 800 Degrees has formulated a new store prototype that cuts square footage to 1,500 to 2,000 square feet, eases operations, and lowers investment.
The prototype will sell the same items, but with new cooking techniques that create thin and crispy and classic crusts that cater more to delivery. REEF ghost kitchens and Piestro kiosks will use the same methods.
“The ghost kitchens are going to be a huge part of our revenue as are those streetside restaurants as will be the Piestro kiosks over time,” Lee says. “ … The progression toward off-premises dining from restaurants and the progression toward more and more convenience for the guests has been in progress all along.”