André Vener first entered the ghost kitchen space in 2019 by accident.
He was attending a parent party for his daughter’s first grade class and met a guy at the bar. That guy turned out to be Michael Montagano, CEO of Kitchen United, a ghost kitchen innovator based in Pasadena, California, where they both live.
Vener, a partner at 50-plus-unit Dog Haus, a fast casual serving mainly hot dogs, burgers, and sausages, hadn't come across the space before.
At the time, Dog Haus was only running brick-and-mortar operations, like most fast casuals. Vener took a tour of Montagano’s ghost kitchen, and decided Dog Haus should jump in before the pool packed.
Dog Haus was already creating virtual brands, however, before it entered virtual kitchen spaces. He recalls Dog Haus' team noticed people were not ordering the brand's chicken and plant-based options as much online through third-party apps as they did in store. Consumers associated the brand primarily with hot dogs and burgers, so when ordering online, they simply didn’t look elsewhere. And generally, the third-party space is a product loyal arena. Guests take to apps to search for cuisines over brands. It was difficult to connect the dots of Dog Haus’ less-recognizable offerings through digital platforms. In other words, did someone looking for chicken for lunch search Dog Haus?
That’s where the ideas for Bad Mutha Clucka and the Impossible Food Shop, two of Dog Haus’ virtual concepts, came from.
After letting its virtual brands run through Dog Haus’ brick-and-mortars to sustain business during the pandemic, they were run through the ghost kitchens.
Dog Haus was the first brand to sign a multi-unit deal with Kitchen United in April 2019, and has also partnered with Cloud Kitchens to open more units.
It’s since opened 10 ghost kitchens, and houses its virtual concepts under the restaurant group The Absolute Brands.
While many people just let third-party apps do the marketing for virtual brands, Vener believes operators need to go a step further.
“We realized we have to treat it like it's a normal brick and mortar,” he says. “We have to talk to the local press to get a story out about it. We have to be part of the community, we have to do giveaways, so we treat it like it's its own brand in its own store, giving it its own personality.”
Another thing that helps Dog Haus’ virtual brands is name recognition. They are not a company that sells a virtual brand out of the back door without letting consumers know where the food came from.
“That's not what we're doing,” Vener says. “From day one we said, ‘powered by Doghouse.’”
He says the goal for connecting the brands is so existing Dog Haus fans are more likely to order from their virtual concepts. The quality is the same, so people will be more inclined to order if they put their name behind the new offerings.
The reason why other ghost kitchen operators do not want to put their name behind virtual brands, Vener says, is because they are doing it as a side hustle, or a way to generate extra profits. Dog Haus goes into the creation of a new virtual brand to create just that—a brand.
While Dog Haus has not yet franchised any of its virtual brands into brick-and-mortar stores, Vener says it is not out of the question. Ghost kitchens allow the company to test how successful virtual brands will be to consumers in different areas of the country, giving Dog Haus helpful data for when it decides to expand into physical locations.
Vener says he would be shocked if Dog Haus didn’t have a brick-and-mortar location of one of its virtual brands in the next year.
As for the future of the ghost kitchen industry, he says plainly, it is not going anywhere anytime soon.
Vener thinks future ghost kitchens should have pickup options so consumers can skirt delivery fees. Places that are in odd locations without pickup centers and marketing behind their brands will not work down the line, he says.
“The old way of a ghost kitchen hidden in some warehouse on the second floor isn’t going to work out,” Vener says. “It has to be more of a technology forward, welcoming pickup center in a good neighborhood.