Learning in Public: 6/22/2021
Bits and bytes
Cloud Kitchen: Virtual Brands
Great article covering the developments in Cloud Kitchens over the last year: https://www.theverge.com/2021/6/1/22456930/chicken-wings-delivery-virtual-brands.
A few notes:
Chicken Wings are the ultimate Cloud Kitchen food. Easy to prepare, high margin, travels + reheats well.
A new breed of asset-light Cloud Kitchen companies have popped up. They push existing restaurants to launch a 2nd, 3rd, and 4th Virtual Restaurant brand.
The various models:
Existing restaurant chain launches a 2nd restaurant brand to sell via the apps (DoorDash, Uber Eats). Examples: Buca di Beppo has a wings brand, Chuck-e-cheese has a pizza brand.
Cloud Kitchen company runs their own kitchens - Cloud Kitchen company has a kitchen and staffs it with their own employees to cook from a variety of their OWN restaurant concepts. The savings here is having just a kitchen — no front-of-house staff, no tables, etc.
Cloud Kitchen company provides kitchen space and placement into the apps - Chefs/Cooks/Restauranters then rent space and give a commission on orders sold via the apps.
Cloud Kitchen company launches a major brand and has orders fulfilled at 100s of random existing restaurants - Example: Mr. Beast Burger. Very powerful when it works — the Cloud Kitchen company now has a direct relationship with the customer, instead of going through the apps.
*NEW* model Cloud Kitchen company partners with existing restaurant, providing one or more Virtual Brands and driving orders via the apps - Value to the existing restaurant is increased utilization via more orders — but at a steep price — literally and figuratively. Literally: ~20% commission. Figuratively: The restaurant has effectively no connection to the end customer. The apps stand between the Cloud Kitchen company and customer — and the restaurant stands one further step removed. While the brand is intended to be memorable, the algorithms on DoorDash and Uber Eats decide who gets seen. In effect, these restaurants will be forced to continually buy their next customer — even if that customer really liked the food last time. This really seems to be the model in which the Cloud Kitchen company has the least skin in the game.
The ordering apps (DoorDash, Uber Eats) have launched their own cloud kitchens — partnering with existing, significant brands AND launching their own restaurant concepts. I believe over the next few years, just as we’ve seen Amazon go after high-value verticals with Private Label brands — we will see the same on the food apps — each launching the most popular food categories AND being able to self-promote in the app to ensure a steady and high rate of orders — thereby maximizing kitchen/employee utilization while keeping customers happy — and in the process out-competing other sole proprietor restaurants in the same food category (e.g. Thai).
Improv lesson w/ Keegan-Michael Key. He is always such a delight.
AI can reproduce any text style — from a photo of a single word:
Look at this delightful toy that Allen Hemberger created for his kid:
What stands out is the level of polish — which speaks to Allen’s abilities but also the availability of tools and infrastructure empowering the passionate individual to create a wonderful 1 of 1 electronic device.
This really is a look at the future, as we will see more and more of these on-off / small-batch devices — for fun, for work or to solve your own problem.
Read/see/watch more here:
New Pasta Shape: Cascatelli
Cascatelli really does improve sauceability. We had some a couple of weeks ago and I look forward to eating it again. Learn more here: https://www.sfoglini.com/products/sporkful
Theme: The Internet makes it possible to find your 1000 (or in this case 10,000+ fans). As of this writing, they have a 10k+ long order backlist they are slowing fulfilling — and that just covers the orders through the end of March! For all the talk of the creator economy, this is an excellent example of a person pursuing their passion — and creating a story + product that many want. We will see more of this as the concept of a job transforms from a 9-5 to include many more side projects.