Restaurant chains roll out virtual brands to reach new customer groups
Restaurants are finding unique advantages in launching “virtual brands” to draw in new groups of customers or to test out new menu items.
Restaurant chains as disparate as Hooters and Wingstop have joined the list of restaurants adopting the virtual brand model, CNBC reports. A virtual brand is a restaurant that exists only via a third-party delivery app and has its menu items made in the kitchen of a restaurant owned and operated by the virtual brand’s parent company.
For instance, Bloomin’ Brands, owner of Carrabba’s Italian Grill, launched a virtual brand called Tender Shack that makes its delivery-only chicken tenders and sandwiches in Carrabba’s kitchens despite having no official public connection to the main brand. Hooters has three virtual brands all under the name “Hootie’s” demonstrating that a restaurant with an established main brand audience might be able to do business with a different demographic through “virtual” means. Wingstop, on the other hand, has used its chicken thigh-focused virtual brand Thighstop to demo a product that it intends to roll into its main brand menu.
Another illustration of how far restaurants are straying from the traditional notion of a restaurant with a physical presence offering a single menu can be found in a new Canadian multi-brand QSR concept named Ghost Kitchens.
Ghost Kitchens allows customers to purchase menu items for carry out from dozens of major QSR brands, such as Quiznos, Nathan’s Famous and Cheesecake Factory. The menu items are all prepared in the same kitchen, according to an article in Food and Wine. Walmart recently announced a partnership with Ghost Kitchens and has introduced the restaurant in one location in Rochester, NY, with plans to expand to at least four more U.S. states in the coming year, if not sooner.
Kroger has been experimenting with a similar setup via a partnership with start-up Kitchen United, according to another CNBC report. The in-store operation will allow customers to order products from six local, regional or national restaurants made in the same dark kitchen and available for pickup or delivery only. The first location of the partnership is slated to open in a Los Angeles Ralphs.
- The new restaurant that just delivered dinner could be a spinoff of one of these popular chains – CNBC
- Walmart’s ‘Ghost Kitchens’ Will Serve Menu Items from Multiple Restaurant Chains at One Counter – Food & Wine
- Kroger partners with Kitchen United for ghost kitchens in its grocery stores – CNBC
DISCUSSION QUESTIONS: Do virtual brands represent a good way for restaurants to appeal to customer bases they wouldn’t normally do business with? Do you see many virtual restaurants eventually establishing physical locations?