Los Angeles has long been known for birthing new developments in food, many of which have stood the test of time. As a test lab for cutting-edge trends in counter-culture, healthy eating, and new horizons of taste, Los Angeles has served up innovations in the preparation and serving of food, including plant-based, vegetarian, gluten-free, and other health and nutrition related diets.
One such trend is the explosive growth of food delivery and takeout. As of 2020, 60% of consumers say they order takeout at least once per week. The rate of growth for takeout has intensified recently, expanding 300% faster than dine-in services. Some industry professionals expect takeout business to build to a 365 billion dollar industry by the end of this decade.
In the wake of these fast-changing norms, accelerated by a dramatic decline in sit-down dining that occurred due to the pandemic, a new breed of kitchen has emerged to serve the burgeoning restaurant delivery business. Driven by app-based delivery services developed by technology companies like GrubHub, DoorDash and Uber Eats, Ghost Kitchens have begun to appear all around the urban landscape, often building out multiple kitchens in underused warehouses and other industrial spaces.
Ghost Kitchens join another type of multi-tenant kitchen facility, the Growth Kitchen, which also addresses the evolving needs of today’s restaurants and many other food makers. While both Ghost Kitchens and Growth Kitchens have superficial similarities because they both offer multiple kitchens under a single roof, they are far from the same thing.
We compare the rapidly emerging commercial kitchen scene in Los Angeles by contrasting the business model of Cloud Kitchens that built the first of their many Ghost Kitchens here in L.A. with the offerings of Amped Kitchens Los Angeles.
What is a Ghost Kitchen?
Ghost Kitchens go by many names. Dark kitchens. Virtual kitchens. Shadow kitchens. Cloud Kitchens is one of the Los Angeles area’s best-known names in the Ghost Kitchen scene. But what makes a kitchen facility a Ghost Kitchen? What makes them different from other kitchen spaces, including commissary kitchens, R&D kitchens, or Growth Kitchens?
Aside from the dramatic name, the concept of a Ghost Kitchen is really quite simple. A Ghost Kitchen is just a collection of restaurant-style kitchens where most of the traditional elements of a restaurant have been stripped away. Ghost Kitchens are all that is left when you strip away the waiters, hosts, tables, parking lots, and much else that would traditionally characterize a brick-and-mortar restaurant; it is just a simple kitchen.
A Ghost Kitchen’s business is predicated on serving takeout orders placed primarily through online app-based delivery services. The concept is to streamline operational efficiency and juice profits by jettisoning the traditional cost centers of a restaurant, including the expensive real estate footprint and the large labor force; Ghost Kitchens were designed to help improve the bottom line. What many restauranteurs did not always understand going in, however, is that some or all of these cost savings get eaten away by the top-line fees charged by Ghost Kitchens and delivery apps.
What is a Growth Kitchen?
While Cloud Kitchens is the most recognizable name in Ghost Kitchens, Amped Kitchens has long been the dominant brand in Growth Kitchens. Indeed, Amped Kitchens pioneered multiple aspects of the Growth Kitchen model, and their facilities have served as the template for many other multi-kitchen facilities (including many Ghost Kitchens). While Growth Kitchens and Ghost Kitchens both consist of multiple kitchens/food production spaces under a single roof, with even the most superficial scrutiny, any observer can see how the concepts quickly diverge. Growth Kitchens are built to maximize efficiency and flexibility for the food companies that make up its tenant base, helping those producers meet the many challenges of today’s marketplace.
Growth Kitchens provide food makers a unique opportunity to build up their brands (whether new or existing) without needing to commit to a single defined growth path. Instead, Growth Kitchen tenants have the opportunity to adapt to changing market conditions and respond quickly to customer demand. If you are looking to expand your offerings to include delivery options, a Growth Kitchen, like those offered by Amped Kitchens of Los Angeles, can accommodate a delivery-only business model. And if you need to expand into a larger space to accommodate your company’s growth, need access to onsite storage to accommodate larger orders, or want to expand into products that require a USDA grant of inspection, a Growth Kitchen liked Amped Kitchens is just the place for you.
And for companies looking to establish an R&D or test kitchen to create new recipes and taste combinations, a Growth Kitchen can make that leap much easier, faster, and often cheaper than trying to build out a space on your own. Just as the name implies, Growth Kitchens are centered around the concept of scalability and expansion. They are the ideal solution for food companies looking to grow and to build out their brands.
What Cloud Kitchens Los Angeles Offers
Cloud Kitchens specializes in Ghost Kitchen rentals and remains one of the earliest and most prominent names in the Los Angeles market. Their offerings center on 15-20 delivery-only kitchen spaces under a single roof united by a sophisticated order routing and management software. Cloud Kitchens Los Angeles rental spaces are typically around 250 square feet in size; while these spaces may be relatively limited compared to what Growth Kitchens offer, they can be helpful for restaurants looking to develop their app-based delivery production. Ghost Kitchen rentals can speed up a restaurant’s ability to expand its delivery options. However, most Ghost Kitchens require their tenants to bring their own production equipment, including stoves, ovens, and tables. Additionally, the type of rental space offered by a Ghost Kitchen like Cloud Kitchens saves entrepreneurs a significant amount in infrastructure startup costs. There are, however, disadvantages to the small-scale Ghost Kitchen business model.
Cloud Kitchens are typically located in congested urban centers in order to maximize the number of users of delivery apps that can be reached from such space. Such is certainly the case in Los Angeles, as well as our sister market in Chicago. Because their business relies on many delivery driver pickups (hundreds an hour during peak times), a Ghost Kitchen often introduces significantly increased car traffic to a neighborhood, causing traffic jams, blocked driveways, and other problems within the community. In addition, because the major national restaurant chains often have the most success utilizing Ghost Kitchens, Ghost Kitchens are part of a trend of muscling out mom-and-pop operations.
Additionally, the order routing software systems that are critical to the operations of a Ghost Kitchen also facilitate the imposition of order-based fees on their tenants so that between 15-30% of every customer bill can end up being split by the Ghost Kitchen and the delivery apps, thereby cutting into the profit margin significantly of their tenants. By contrast, Growth Kitchens like Amped Kitchens do not charge tenants any sales-based fees, relying on more traditional base rents and other usage-related charges (for example, by charging by the pallet space for dry, refrigerated or frozen storage space).
Finally, beyond the order management technology, Ghost Kitchens provide only limited services and amenities to their tenants. They do not offer the kind of flexibility and support that are key to the success of tenants who choose to rent at a Growth Kitchen. Primarily directed at restaurant delivery, Ghost Kitchens typically lack all of the amenities and services needed by the typical food makers producing Consumer Packaged Goods, looking to find pilot or R&D production space or support their commissary or central kitchen business.
What Amped Kitchens Los Angeles Offers
Growth Kitchens at Amped Kitchens centers on community, flexibility, and industry-leading amenities. We support growing businesses from recent start-ups looking for a place to grow from their initial incubation phase to large national brands expanding into new markets or product lines. Amped Kitchens has a much wider range of rental space available to its tenants, from efficient 150 square-foot kitchens to generous 4,500 square-foot high volume production spaces. Amped Kitchens serves a far broader variety of food production requirements as compared to any Ghost Kitchen.
Like Ghost Kitchens, each Amped Kitchens space is exclusive to a single tenant. Unlike any Ghost Kitchen, Amped Kitchens facilities leverage the capacity of each kitchen by offering ample on-site dry, cold, and frozen storage space, packing rooms, dishwashing areas, and many other resources key to the growth of your food business. Amped Kitchens supports every tenant outside their kitchen with a suite of additional on-site amenities from office and conference spaces, professionally staffed loading docks, industry-leading utilities infrastructure including high capacity electrical, gas and water services, and many other services and supports essential to expansion and success.
What makes our Growth Kitchen truly unique is the ease with which our facilities allow you to scale your business. Amped Kitchens features industry-leading production spaces sized to fit your business requirements and built to facilitate compliance with the strictest safety regulations and certification regimes. Our rental spaces are set up with specialty food regulations in mind, including:
- HACCP
- USDA
- FDA certified organic
- Kosher
- Gluten-free
Amped Kitchens specializes in growth; we want to see your business flourish regardless of your goals.
Why Choose Amped Kitchens
Amped Kitchens offers best-in-class Growth Kitchen spaces in two central locations in Los Angeles. Our business is built on the idea of community and delivering the kind of gold standard amenities that help drive food business success. And our practices promote both sustainability and adaptability for our tenants. We offer adaptable spaces and keystone amenities designed to help you scale up fast with the support you need.
For more information on renting, please contact the team at Amped Kitchens today. We want to see your company thrive, and Amped Kitchens offers a pairing of production space with essential amenities to help you make it happen.
