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Ghost kitchens, also known as kitchen-only restaurants, are facilities that prepare food specifically for delivery and takeout, without dining areas. They allow restaurant owners to avoid the high costs of opening a traditional brick-and-mortar space while still deriving revenue from food delivery orders. Ghost kitchens have gained popularity among restaurateurs as ordering food online and via food delivery apps has steadily increased. They provide restaurants the opportunity to operate multiple virtual brands or cater to different cuisine types from a single kitchen. As major food delivery companies like Uber Eats, DoorDash, and others have expanded across major cities globally, the demand for quick service and reliable delivery options has been driving the need for more ghost kitchen facilities amongst restaurants.
The global Ghost Kitchen Market is estimated to be valued at US$ 70.37 Bn in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024-2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Ghost Kitchen Market is Expected to be Flourished by Rising Demand for Delivery and Takeaway Food Orders
One of the key drivers fostering the growth of the ghost kitchen market is the rising demand for delivery and takeaway food orders globally. Food delivery services have gained immense popularity over the past few years, especially after the onset of the COVID-19 pandemic. The convenience of ordering food from the comfort of one’s home without having to step out has boosted the preference for delivery and takeaway options among consumers. As per statistics, the global food delivery market size was valued at over US$ 134 billion in 2022 and is estimated to reach around US$ 305 billion by 2027, growing at a CAGR of over 16.7%. Furthermore, changing lifestyles amid busy schedules leave limited time for traditional dining out experiences, making delivery a more viable option. Ghost kitchens allow restaurants to cash in on this food delivery boom while keeping overhead costs low. Their ability to operate multiple virtual restaurant brands from a common location widens the food options available for delivery. All these factors work in favor of increased adoption of the ghost kitchen business model.
Segment Analysis
The ghost kitchen market is dominated by two main segments – stand-alone ghost kitchens and virtual/cloud kitchens managed by third party companies. Stand-alone ghost kitchens accounts for over 60% of the market owing to their independent nature of operations and flexible work models. However, the virtual/cloud kitchen segment is growing at a faster pace powered by large third party operators offering turnkey solutions and technological integrations to restaurants and food brands. This segment is expected to lead the market over the coming years due to attractive value propositions and consolidated offerings.
PEST Analysis
Political: Growing focus of governments across regions to promote food delivery services through enabling policies is positively impacting the market. Several favourable regulations introduced to support businesses impacted by the pandemic.
Economic: High occupancy costs of physical restaurants and economic slowdown forcing F&B brands to adopt low-cost cloud kitchen models. Market enjoys strong financial support from venture capital firms and increased M&A activities.
Social: Changing consumer habits and preference for convenience has accelerated demand for delivery/takeaway food. Younger demographic is driving consuption through digital/mobile platforms. Health and sustainability concerns also support ghost kitchen models.
Technological: Adoption of digital platforms, cloud infrastructure and automation solutions help optimize operations and customer experiences. Advancements in areas like AI, IoT and robotics will further enhance efficiencies. Data analytics play a vital role in managing demand and supply.
Key Takeaways
The global Ghost Kitchen Market is expected to witness high growth over the forecast period. The global Ghost Kitchen Market is estimated to be valued at US$ 70.37 Bn in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024-2031.
North America currently dominates the market owing to high smartphone and internet penetration as well as growing penetration of food aggregators and delivery services. The region is adopting latest technologies at a rapid pace further contributing to its leading position. In Asia Pacific, China represents the fastest growing regional market for ghost kitchens driven by increasing number of young consumers seeking convenience through online platforms. Domestic players like Panda Selected and Hua Shang Wei Guo in China are expanding aggressively through partnership with restaurants and virtual brand developments.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
