Grubhub is launching its own ghost kitchen with recipes from 'MasterChef' winners

Grubhub is launching its own delivery-only virtual restaurant, marking a new angle of entry for the Chicago-based company into the pandemic-fueled world of ghost kitchens. Virtual restaurants—also called ghost kitchens—operate without dining rooms, reaching customers via online ordering and delivery services. Some provide kitchens to dozens of restaurants under one roof. Others operate out of established restaurants. The pandemic facilitated a boom in such concepts as people grew more comfortable ordering food online, and experts think they might be here to stay. Chicago got 700 new virtual restaurant brands in 2021, compared with only 350 brick-and-mortar ones, according to market research firm Datassential. Chicago-based sandwich chain Potbelly announced its entry into virtual kitchens as a way to spur its ambitious growth plan. Ultimately, the explosion of virtual kitchens is one of the many ways in which COVID-19 has reshaped the dining scene. Don’t miss the latest news. Sign up for Ad Age newsletters here. Until now, Grubhub was the facilitator of virtual kitchens, the connector between the restaurant making the food and the person ordering it. The food ordering platform created its own virtual restaurant brand to help give restaurants additional ways to make money, said Marnie Boyer, VP of restaurant acquisition at Grubhub. “This is really a low-risk way for restaurants to get involved and have multiple revenue streams and attract new customers,” she said. “They don’t have to do that with any additional cost, and they don’t have to hire a ton more staff.” Grubhub’s virtual restaurant is called MasterChef Table and will feature recipes from winners of the show "MasterChef" on Fox. Three winners from different seasons created a total of 11 dishes that will be sold through the virtual restaurant. Diners in 20 cities, including Chicago, Boston, New York and Los Angeles, can get on Grubhub’s app and order the food. Restaurants that already sell their food on Grubhub’s platform can sign up to also make the MasterChef Table dishes out of their kitchens. Grubhub said there’s no licensing fee for those restaurants. The company will give them the recipes and help them source the ingredients. Grubhub receives a commission from MasterChef Table orders at the same rate the restaurant agreed to at their brick-and-mortar location. So far, two Chicago restaurants have signed up to make the MasterChef Table food: Iztatl Cocina Mexicana in the Jefferson Park neighborhood and Señor Pan Cafe, which has three locations in the city. Grubhub said four other restaurants are also interested. Get your tickets for the Small Agency Conference & Awards, held in Chicago on July 26 and 27, at AdAge.com/SACA2022 Some brick-and-mortar restaurants are adding ghost kitchens as they work to recoup losses from the past two years. Proponents of the model say that adding the additional revenue stream without having to put forth the capital to rent a new location or hire staff—an expense that has shot up in cost in the past year—can help with survival in the low-margin restaurant business. But virtual kitchens aren’t without controversy. Some traditional restaurant owners worry that they could do to restaurants what Uber did to the taxi industry. Virtual operators don’t need costly prime locations and don’t have reputations forged in brick-and-mortar sites to uphold, some say. It’s another gripe for traditional restaurateurs who are also fed up with third-party delivery apps, which have faced allegations from the city over gouging restaurants, which they deny. Boyer said Grubhub has not received pushback from any restaurants on the company’s new virtual brand. “We’ve really seen this as something that doesn’t cannibalize anything on their part, and really helps them create concepts,” Boyer said. “We definitely see it as a way for them to grow and diversify.” Enter the Ad Age Leading Women Rising Star awards at AdAge.com/LWRisingStar—entries close June 8.

Grubhub is launching its own ghost kitchen with recipes from 'MasterChef' winners

Featured Stories