Local Kitchens: A Ghost Kitchen That’s Not a Ghost
In the evolving landscape of the restaurant industry, where cloud kitchens and ghost kitchens have faced significant challenges, a new model is emerging: Local Kitchens. This innovative concept, driven by technology and a focus on quality, is proving its mettle and attracting significant investment.
Local Kitchens, a San Francisco-based company founded in 2020 by former DoorDash executives Jon Goldsmith, Jordan Bramble, and Andrew Munday, is challenging the traditional restaurant model. While operating in a similar manner to cloud and ghost kitchens, offering a shared workspace for multiple restaurant brands, Local Kitchens differentiates itself with a key element: ownership and control.
"One of the advantages of this model is that we’re more efficient from a sales per labor hour perspective," says CEO Jon Goldsmith. "That means we can really reinvest in hiring great people, paying them, and training them well. That’s critical to get food quality in a model like this where you have eight brands coming from one kitchen." This focus on employee training and quality control, along with operating the restaurant locations themselves, sets Local Kitchens apart. They also offer dine-in service, providing a unique customer experience that many delivery-only ghost kitchens lack.
Local Kitchens currently operates twelve locations, boasting a diverse array of partner restaurants and chefs. This includes popular local brands like Sushirrito and Boba Guys, as well as nationally recognized names like Mason Hereford, founder of the acclaimed New Orleans sandwich shop Turkey and the Wolf. This combination of local favorites and celebrity chefs creates a diverse menu that caters to a wide range of tastes.
With an impressive track record, Local Kitchens saw a 5x growth since its Series A funding in 2021 and achieved unit-level profitability. This success speaks volumes about the model’s effectiveness. "We’ve become a weekly habit, especially for guests who don’t feel like cooking," shares Goldsmith. "A family or couple can order from Local Kitchens and find something for everyone." This customer base, combined with a robust online presence and a user-friendly mobile app further solidify Local Kitchens’ position as a rising star in the industry.
However, Local Kitchens’ success comes amidst the declining fortunes of traditional ghost kitchen concepts. Although ghost kitchens were initially forecasted to make up over 20% of the restaurant industry by 2025, the pandemic-fueled boom appears to be fading.
The shift in consumer behavior, coupled with concerns about food quality and inconsistent service, led to challenges for many ghost kitchens. "Even by big fast-food chains like Wendy’s", the ghost kitchen model has lost its appeal. And even prominent players like Kitchen United, which raised $150 million in venture-backed funding, are selling off assets.
This makes Local Kitchens’ continued success and recent $40 million Series B funding led by General Catalyst even more remarkable. "Ghost kitchens initially promised to drive pivotal change in customer value and efficiency," explains Kyle Doherty, managing director at General Catalyst. "However, issues like inauthentic menus, poor quality control, questionable preparation methods, and unsustainable unit economics prevented certain business models from gaining a strong foothold in the restaurant industry post-COVID."
But what sets Local Kitchens apart? "By creating what Doherty called “a new category that’s in our view reflective of the ideal dining experience,” Local Kitchens has “the perfect blend of prioritizing what consumers need and using innovation to fix restaurant challenges and inefficiencies," comments Doherty.
Doherty further emphasizes Local Kitchens’ crucial advantage: "Even years after food delivery growth proved to be a long-lasting trend, customers are still being forced to sacrifice the factors that make eating out enjoyable, and choose between high-quality food and good service. Local Kitchens is accomplishing what other food delivery models have not been capable of — meeting customer experience preferences, driving unparalleled efficiency, and creating a solution that delights consumers, chefs, and local communities alike."
With this latest round of funding, Local Kitchens plans to expand its operations beyond California, aiming for new markets in Los Angeles and beyond. This expansion signifies the company’s vision for a national footprint, offering its unique multi-brand restaurant concept to a wider audience.
Local Kitchens’ success is not just about technology, but about prioritizing the customer experience. By providing delicious food from diverse restaurants, high quality service, a welcoming dining atmosphere, and an efficient online platform, Local Kitchens is demonstrating that a different kind of ghost kitchen is possible, one that thrives in a post-pandemic world. Perhaps Local Kitchens is not just defying the odds, but also redefining what a ghost kitchen can be.
This new model, with a strong focus on quality, innovation, and the customer experience, is poised to shape the future of the restaurant industry. Local Kitchens is a testament to the power of blending technology and human connection, creating a model that addresses the challenges faced by traditional restaurants while satisfying the needs of modern consumers.
