The Secret Behind Your Takeout

Ghost kitchens operate out of warehouses, lofts, trucks and trailers. They don’t have dining rooms, tables or servers. And they’re keeping the restaurant industry afloat

Some of the most successful restaurants in Toronto right now are ones you’ve never heard of. These are restaurants with wincingly pun-forward names (Wrap Me Up, Bite Me Grill), or names that evoke locations they don’t really occupy. They’ve never offered in-person dining, have no front-of-house staff to furlough, often don’t have physical storefronts. They share commissary or hub kitchens capable of producing dozens of cuisines, with food prepared exclusively for takeout or delivery, which makes its way to customers through third-party apps like Uber Eats, DoorDash and SkipTheDishes. Some of these restaurants are, in a way, fictional. The food, of course, is real (and of a quality that varies as much as restaurants themselves do), but all the things associated with a sit-down restaurant—ambience, aesthetics, knowledgable servers carrying plates and flatware—have been abandoned in the name of convenience, choice, necessity and speed.

These kinds of places go by many names—ghost kitchens, virtual kitchens, cloud kitchens, smart kitchens—but the basic idea is the same: they’re kitchens only. Most of them, in fact, can make more money, and theoretically serve more customers, without the usual restaurant trappings. There are scores of these places in Toronto. There are larger virtual food courts or food halls that churn out a wide range of cuisines or restaurant brands, so customers can order a variety of things while paying a single delivery fee. There are delivery-or-takeout-only kitchens associated with established brands like Kinton Ramen. And there are places that offer the illusion of a genuine dining experience but have never served a single sit-down guest.

In early March, I visited Kitchen Hub, a virtual food hall tucked in the back of a retail complex on the Queensway, beneath a hair salon and around the corner from the mammoth Golden Lion Ukrainian restaurant. Kitchen Hub offers existing restaurants additional kitchen space and infrastructure so they can easily and efficiently produce takeout food. Restaurants bring in their own ingredients, recipes and cooks, who largely replicate the menus they offer at their brick-and-mortar locations. Kitchen Hub handles the front-of-house stuff, dealing with orders, apps, couriers and marketing. Restaurants pay Kitchen Hub a monthly fee (the owners don’t like the word “rent”), plus four to six per cent of their sales.

This start-up takes the Silicon Valley approach to ghost kitchens, boosting local restaurants with tech-enabled efficiency
Adam Armeland
(below left), a former real estate development lawyer, co-founded Kitchen Hubs with Oren Borovitch (below right), once a senior manager of partner strategy at DoorDash, in 2018. (A third partner, Mathew Abramsky, joined last March.) They offer additional cooking space to existing restaurants like Fresh, the Carbon Bar and Pai. The partners speak rhapsodically about restaurants and their future. “We’re trying to provide a platform for these restaurant brands to proliferate in an authentic way,” Armeland says. At the start of the pandemic, they even waived their partner restaurants’ monthly fees. As for the concern that virtual kitchens and food halls undermine, and might one day displace, traditional restaurants, Armeland says that’s not his ambition: “To be successful on delivery, it’s absolutely integral to have a strong bricks-and-mortar presence that people visit when they want to be social. In no way do I ever want to have a restaurant that is only digital.” He points to Amazon’s purchase of Whole Foods, or Warby Parker, the online eyewear retailer that began opening stores in 2018. “We’re social beings,” Armeland says. “That’s not something we’re looking to change. It’s something we’re looking to prop up.”

This Kitchen Hub location, the company’s first, has leased space to three popular Toronto restaurants—the Carbon Bar, Fresh and Pai—giving each spot its own dedicated stoves, hoods, freezers and dish pits. The front-of-house is staffed by two Kitchen Hub employees, and consists of small wooden tables on casters, where orders can be placed for drivers; metal shelves where bagged orders wait for customer pickup; and a wall covered in dozens of tablets for tracking orders. The entire space is still being configured for optimal efficiency, and some staff wear pedometers so the company can track the number of steps they take in a shift.

Kitchen Hub is expanding rapidly, but maintaining a hyper-local focus. In March, it opened an east-end location in partnership with Chubby’s Jamaican Kitchen and this summer will open a midtown food hall with 13 kitchens. One of the company’s earliest, most enthusiastic adopters is the ebullient Yannick Bigourdan, who owns the Carbon Bar as well as Union Chicken and Amano. He’s enjoyed so much success with Kitchen Hub that he’s launched two more virtual-only restaurants—a burger concept called, well, Concept Burger, and Slice Baby Slice, a kind of dessert-gram, which allows people to send a slice of cake as a celebratory greeting.

The experience has even relaxed of the barriers between his restaurants; Bigourdan now sells Union Chicken menu items at his Hamilton spot, Uncle Ray’s. “I’m very bullish on ghost kitchens,” he told me. “Without delivery and takeout, our restaurants would be closed. There would be no one employed by our company. Across eight restaurants, that’s a big deal.”

Kitchen Hub opened just two months before the pandemic, and it still feels bright and shiny, an effect enhanced by the vivid green colour scheme that dominates the foyer, the upstairs staff room and the company’s logo. The kitchens are compact, orderly and busy. Despite being folded into what amounts to a co-working space, the restaurants have preserved parts of their personalities: a bulletin board near the Fresh dish pit includes a printed backgrounder on Black History Month and a sign reading POSITIVE VIBES.

I visited on a Thursday night at dinnertime, and orders and drivers rolled in with regularity. Kitchen Hub sends out an average of 300 orders a day from this location, but the whole operation ticks along with an unhurried, unfussy ease. The staff and cooks seem as cheery and calm as any I’ve ever seen in a commercial kitchen. Food is made, boxed, bagged and bound for homes with almost military precision, but the vibe is less sweatshop than Santa’s workshop. It’s seamless, smooth, even seductive.

That seamlessness is of course the hallmark of digital-first, app-driven, algorithm-shaped consumption. It’s what defines every Amazon purchase, every Netflix binge-watch, every Spotify stream. Thanks to Uber and its disruptive confederates, takeout food has been part of this ecosystem for years. But only now, due to the pandemic, have restaurants been compelled to embrace it. Some have done so willingly, even eagerly; others, not so much. The collateral damage wrought by online everything is grimly familiar—brick-and-mortar retail, movie theatres, regular theatres, all near collapse. Restaurants, already on the ropes, now have to confront a tricky question: can they embrace new business models like Kitchen Hub’s without undermining their very existence?

The earliest ghost kitchens appeared in 2013 in New York, driven by the emergence, and immediate expansion, of app-based food delivery. The Green Summit Group, a start-up, partnered with the online delivery pioneer Grubhub to create a virtual restaurant that produced salads and sandwiches. While that partnership only lasted a few years, other players quickly dove in. In Europe, Deliveroo and Uber Eats opened ghost kitchens in London and Paris. The former Uber CEO Travis Kalanick opened CloudKitchens in Los Angeles, allowing restaurant clients to set up low-budget, fully equipped commercial kitchens complete with proprietary ordering software, in underutilized real estate that he purchased through a holding company. In 2018, Uber Eats bought Ando, a delivery-only restaurant created by Momofuku’s David Chang. The following year, Amazon led a $575-million (U.S.) investment round into Deliveroo. DoorDash, meanwhile, was already operating its own branded ghost kitchen storefronts by the time the pandemic started. Last fall, it launched a program in Chicago called Reopen for Delivery, helping shuttered restaurants stay on their feet by matching them with existing ghost kitchen facilities.

Covid accelerated ghost kitchens’ expansion. To survive the pandemic, restaurants improvised in ways both ingenious and desperate, morphing into bodegas and bottle shops, repackaging their menus as meal kits, or selling flash-frozen and vacuum-sealed entrées in grocery stores. But for restaurants that wanted to keep making food the way they always had (kinda, sorta), there was only one solution: become a ghost kitchen, or hop onto an existing one. In many cases, this wasn’t really a leap; with dining rooms dark, every restaurant that could do delivery had, in effect, already become one.

In Toronto, even pre-pandemic, the rapid influx of ghost kitchens was startling—akin to the post-legalization explosion of cannabis shops, only less visible to the naked eye. Here, as elsewhere, such kitchens came in all shapes and sizes and offered vertiginous variety: sous-vide tonkatsu sandwiches from Neo Coffee Bar, lobster poutine from Coast, butternut squash and coconut curry pie from the Q and B Pie Co., 22-layer olive oil chocolate cake from Adobar. Restaurants that already did delivery, like Pai on Duncan Street, opened up secondary kitchens to handle the volume. Other places, like the 6ix Food Hall, served up dozens of cuisines and dishes, from breakfast wraps to poutine.

A company called Ghost Kitchens (which, as the capital letters suggest, has trademarked the name) operates similarly, but has distinguished itself by focusing on quick-service brands previously unavailable in the Canadian market—the Cheesecake Factory bakery, Jamba, Saladworks, Nathan’s Famous. It’s estimated that by 2030, the global ghost kitchen market will be worth $1 trillion (U.S.).

These massive commissaries pump out dishes from the Cheesecake Factory, Nathan’s Famous and 30-odd other familiar brands
George Kottas (below), the owner of Ghost Kitchens, describes himself as a “serial entrepreneur.” Six years ago, he set out to develop a new breakfast franchise called Bite Me Grill on the Danforth, and soon, Uber Eats had approached him about delivery. Though the restaurant itself was only open from 7 a.m. to 3 p.m., when he signed up, the ordering window was automatically left on for 24 hours. The next day, Kottas saw that there were about 30 missed orders. Within a week, he hired two more people and kept the restaurant open for delivery at night. Soon, he had created a new, separate dinner menu—essentially a proto–ghost kitchen—and convinced Uber Eats to include it on their app. Over time, he developed additional virtual brands and an umbrella company, Jackpot Brandz, under which they all nestled. At Jackpot, he tested and tested: concepts, kitchen design, technology. He expanded quickly, to Calgary, Winnipeg, Chicago. “The biggest obstacle was waiting for the industry to grow,” he says. He founded Ghost Kitchens in 2016, and it now has 50 locations in development across Canada and the U.S. Susi Graf (above left), the marketing director, and Jen Blasko (above middle), the director of operations, are both excited by the growth. “Right now, when there’s a lot of doom and gloom, it’s fun to be building,” Graf says.

A couple of weeks ago, I was walking along Geary Avenue, a semi-industrial strip near Dupont and Dufferin recently colonized by a handful of boutique bars and restaurants. That day, I noticed a new addition: a pair of large food trucks parked in an empty lot behind a nascent loft development. One was white and devoid of any branding; the other bright red and emblazoned with the Wendy’s logo. A set of three sandwich boards advertised their offerings, including a suite of burgers with names seemingly crafted by an AI with writer’s block—Burger Bytes, Fast Burger, Barn Burger—and two other virtual dining concepts with oddly aggro brand names: Man vs Fries and MrBeast Burger.

I knocked on the small window on the side of the white food truck, and a young guy opened up. When I asked if I could order something, I was told yes, but that I couldn’t actually order it from him. I needed to get on Uber Eats or another food app and order there. Yes, the food was made in the truck—he and another cook were operating the cramped, submarine-like quarters—and yes, he would be the one giving it to me, but the order had to go through an app. What if I didn’t have an app? And if I did order through an app, wouldn’t I have to pay a fee to have it “delivered” to the exact spot from which I’d ordered it? He shrugged. I shrugged. Virtual concepts, ghost kitchens, faux food trucks—my mind spun while my stomach growled.

The guy was wearing a cap with a logo that spelled out the word “Reef,” which, I later learned, referred to Reef Technology, a Miami-based start-up that operates these trucks all over North America. They’re home to production kitchens that churn out Wendy’s products as well as various other food concepts, all exclusively for delivery through third-party apps. Though Reef is currently only making food out of these trailers, the company has plans to operate laundromats, grocery stores, even medical services out of them in the future—anything you can put into a pod that has electricity, running water and Wi-Fi.

Like delivery apps, ghost kitchens sell themselves as a boon to restaurateurs. The premise is simple: traditional restaurants cost a lot of money, require licences and permits, and need a large, well-trained staff. Virtual restaurants, in contrast, can be anywhere—in a pre-existing restaurant, a warehouse, a parking lot. You don’t need servers, and in many cases, you don’t need chefs; depending on your model, you can train a 19-year-old to cook multiple products across different brands. Opening a new restaurant, you build a menu based on your own taste, intuition and market research. Opening a virtual restaurant, you can build a menu based on data from the delivery apps.

The biggest incentive, obviously, is that a virtual restaurant optimizes your delivery capabilities. And in a pandemic world, where no one can actually eat in a restaurant, delivery is king. Uber’s food delivery was up 128 per cent in the fourth quarter of 2020, and Uber Eats brought in $1.35 billion (U.S.) in revenue during the same period. “I don’t know how far ghost kitchens will go,” says Hemant Bhagwani, the owner of the Amaya Indian food chain, whose food is sold through Ghost Kitchens. On one hand, he says, he wants them to succeed for selfish reasons. On the other, what happens to the smaller joints? “Who’s getting the most out of it? The third parties—the Ubers and the Skips.”

In late January, I took a trip to a Ghost Kitchens location on Dixie Road in Mississauga, up the street from a Four Points by Sheraton hotel, a tropical fish store and a clutch of fast food places. Like Kitchen Hub, Ghost Kitchens has adopted a green-and-black colour scheme, but it hews more closely to the palette used by Uber Eats, presumably to better align the two in customers’ minds. Inside, there’s little decor: a large video wall that continuously advertises selected brands, and a seven-foot-tall touch-screen kiosk where walk-in customers can place orders.

Behind the video wall lie the guts of the operation: a bustling, windowless, modular kitchen that runs 24 hours a day. False half-walls, which contain electrical and plumbing, give it the appearance of an open-concept office, and the cloying, pervasive perfume of Cinnabon gives it the odour of a shopping mall food court. Hoppers and fridges and counters are filled with salad and taco ingredients, bottles of Slush Puppie syrup, individually wrapped slices of Cheesecake Factory cakes, enormous bags of movie popcorn.

The staff—and there are usually only two to four employees at each Ghost Kitchens location—are trained not to cook, but to reheat and assemble. There are several stations dedicated to individual brands, but because some brands share ingredients, and the stations are designed to be fluid, it’s hard to tell where one begins and another leaves off. Ghost Kitchens has its own internal brands—a pasta concept, a jerk chicken concept, a pierogi concept. While each brand supplies Ghost Kitchens with an operating manual so that its products can be faithfully replicated, some occasional fudging is done to maximize efficiency—Cracker Barrel cheddar, say, subbed in for Black Diamond.

The day I was there, a pair of masked staffers stood in a corner, making what appeared to be the dullest infomercial ever. One held a camera, while the other silently and slowly poured an orange liquid into a large metal bowl. As it turns out, they were filming a 30-second how-to video on proper smoothie prep. Such tutorials are created for every product then integrated into the order system; employees who need to know how to quickly and consistently make 20 different dishes for 20 different brands can click on these for a quick refresher as soon as an order comes in.

There’s no one on-site who would ever be mistaken for a chef, but if anyone or anything fulfills that role, it’s the futuristic-looking Rational oven that sits near a bank of freezers. Self-venting, gleaming and programmable, it’s capable of spitting out multiple products for multiple brands at various times, temperatures and speeds. It put me in mind of the Jetsons’ robot maid, Rosie, retooled by Jeff Bezos.

Ghost Kitchens has 50 new locations under construction in Canada and the U.S. It recently struck a deal with Walmart that would place kiosks and kitchens in at least 60 of its American stores, 15 of its Canadian ones, and more across Central and South America. Before Ghost Kitchens, its owner, George Kottas, started Jackpot Brandz, operating virtual restaurant concepts—Jojo’s Wings, George’s BBQ Chicken & Ribs, Jorge’s Burritos—through Uber Eats. Ghost Kitchens was both a refinement and an amplification of the Jackpot strategy. If it could be successful with brands and concepts completely unfamiliar to consumers, what about brands that already had loyal, international, fans?

Chef Dusty Gallagher and his partner, illustrator Flo Leung, offer a personal-chef experience, available for delivery and pickup
Pre-pandemic, Dusty Gallagher (above left) and Flo Leung (above right) rented this Parkdale studio intending to run a catering business out of it and offer private dinners and cooking classes. Once everything changed, so did their plans. Instead, they decided to launch a takeout operation with meals that mimicked family dinners they might prepare for themselves. Now, Gallagher and Leung produce elaborate prix fixe meals, lovingly packaged for pickup or delivery and promoted entirely through Instagram and on their website. Past menus have been inspired by Julia Child and Sami Tamimi’s Falastin cookbook. They sell 45 to 50 dinners per week, for roughly $40 a person, with Gallagher doing the cooking and Leung’s artwork adorning the menu cards that accompany each meal. If virtual food halls are on one end of the ghost kitchen spectrum—essentially fast food on steroids—Noble House is on the other: an artisanal simulation of a home-cooked meal that you can enjoy by candle- or TV-light. Gallagher has worked in professional kitchens since he was 13 (he’s now 39), and he prefers the freedom of his ghost kitchen. He’s happy not to have to fuss with plating and, in his words, “cook for show.” And though they’re just breaking even so far, they’re no longer saddled by the high overhead of a restaurant. “It’s a tough, tough, business,” he says. “Working in this environment, I have more control.” He may never go back.

Kottas sat on Uber’s partner advisory board, and as companies approached Uber about getting into the virtual kitchen space, they soon made their way to him. Of paramount interest, on both sides of the equation, were brands that didn’t have much, if any, presence in Canada. Ghost Kitchens allowed them to get a foothold here without investing in physical space, staff or marketing. The advantage for Ghost Kitchens was equally obvious: they were instantly endowed with brand equity while spreading their risk. When he launched in 2016, Kottas employed a franchise model, bringing in investors who co-owned and managed locations, but he soon had sufficient capital to abandon that approach—each new Ghost Kitchens location is now completely owned and operated by the company.

The company’s goal is to be able to deliver restaurant food to everyone in Canada (and, presumably, eventually, the world) within 30 minutes, 24 hours a day. His kitchen-kiosk combination is not just suited to malls or department stores; he envisions them in high-rise apartments, office buildings, universities, gas stations, hospitals, airports. Like Reef, Kottas has his sights on an even bigger brass ring. A new enterprise, Ghost Markets, which would distribute groceries and related products, is already being developed and will roll out in the next few months. When the company reaches a certain critical mass, it will also be able to dispense with third-party apps and take over its own deliveries. “We’re changing an industry,” Kottas says. “We’re doing something new. They call us the Amazon of the hospitality world.”

For many local restaurants, the Amazon of the hospitality world is the only thing keeping the lights on. Amaya’s Hemant Bhagwani owns about 30 restaurants in the GTA, and during the pandemic, he says, he went from having a $27-million business to a $2.7-million business. That’s why he agreed to sign up with Kottas last October. And it’s why he’s now using Amaya’s commissary kitchen in Mississauga—which already produces sauces and curries to be shipped to Ghost Kitchens locations—to make additional cuisine concepts for Ghost Kitchens: Middle Eastern, Thai, Greek. And yet he still has some reservations about the whole virtual kitchen movement. “I really want to be part of this and help it grow, but everybody is doing it—people have one restaurant in the front and two or three concepts in the back,” he says. “Most people don’t understand how to do it right and can’t keep up both efficiency and quality.”

Producing restaurant food that retains or replicates the taste, appearance and feel of a meal you would get in a restaurant remains the defining challenge of virtual kitchens. If you’ve never enjoyed Ghost Kitchens’ Pepe’s Perogies at a dining table other than your own, it might not matter so much what they look like when they arrive in a bag at your door. But Carbon Bar barbecue pork ribs? That’s a bit tougher.

Like everyone we know, my family and I have ordered a lot of takeout in the last year or so. Tons of pizza, of course, but also burgers, salads, pasta, pho and dozens of other things I can’t recall. For Valentine’s Day, my wife and I picked up a festively decorated box of Mexican street food from La Bartola, the vegan Mexican place on College, which was great, even though, by our second margarita, we could barely summon the will to properly reheat the remaining dishes.

We had never ordered from Ghost Kitchens or Kitchen Hub, though, or any of the other “food hall”–type virtual kitchens. In early March, as I was researching this article, we finally took the plunge. As we have every night for the last couple of months, we cued up an episode of Superstore, and then we waited for our meals to arrive. The food we ordered over a few evenings—from Amaya, Fresh, Saladworks and Pai—was fine. Flavourful enough, somewhat tepid on arrival and, with tip and delivery fees, predictably overpriced. My eight-year-old son ate hardly anything, but devoured his Cinnabon Minibon and pronounced it “awesome.”

But we’ve gotten used to such takeout. Even at its best, it always comes with a special sauce of disappointment. When I visited Kitchen Hub, everyone was masked, of course, but it was the closest I’d been to strangers in a long time, and the bustle, the collision of voices, the movement, the esprit de corps, reminded me of what I missed most about being in a restaurant. The intimacy, the surprise, the people. Takeout will never provide that.

The pandemic has forced us to rely on places like Ghost Kitchens and Kitchen Hub, even as it has shown what our downtowns could look like if we relied on them exclusively. Deserted storefronts, empty concert halls, barren bars, zombie malls. When we finally emerge from our Covid cocoons, will our irrevocable addiction to convenience and choice hold our cities in limbo, keeping us from restaurants for good? Not likely. Virtual kitchens can’t replace restaurants, but they have offered the industry a lifeline. In the back of many seemingly dark spots, chefs are once again chopping, sautéing and experimenting, still producing good food to be enjoyed. Ghost kitchen owners often refer to their businesses as concepts—a burger concept, a noodle concept, a gochujang fish taco concept—but they’ve also made the restaurant itself a concept: mutable, transient and capacious.

Whenever the pandemic finally passes and life returns to some semblance of normalcy, I expect it’s going to be almost impossible to get a reservation at a restaurant. This time next year—assuming they can hang on that long—every bistro, bar, movie theatre, art gallery and sports stadium will be packed with giddy customers and audiences, delirious that they’ve finally been released from the prison of their homes and eager to spend money among similarly giddy, maskless strangers. The Carbon Bar’s Yannick Bigourdan says that when he talks about this possible future with friends, they jokingly refer to it as “armageddon.” A good armageddon, that is. I imagine a party that feels like TIFF, Mardi Gras and Black Friday all rolled into one and lasting months. I can’t freaking wait.

We’ll still order takeout, though. Just like after you’ve gone to see every movie and basketball game you can afford, you’re still going to binge-watch whatever the next Bridgerton is. Nobody can eat out all the time. Nobody wants to. Ghost kitchens will continue to evolve, and will become something more and less than regular restaurants. But nobody wants to live in a ghost town.

This story appears in the May 2021 issue of Toronto Life magazine. To subscribe for just $29.95 a year, click here.