Virtual Restaurants in a Post-Pandemic World
Today’s food and beverage ecosystem is feeling the impact of current public health events across all areas. Virtual restaurants are stepping up to the plate – read on for a look at the category’s current impact.
Virtual Restaurants in a Post-Pandemic World
In the past five years, once stagnant consumer habits and behaviors began to change at an exponential rate – with no sign of slowing down.
The most significant changes lay in the motivations behind consumer choices; the era of functional food arrived and was firmly established in the mainstream by 2019.
Virtual restaurants play a vital role in catering to these evolving needs, offering consumers convenience and flexibility that aligns with modern demands.
Consumer spending habits also experienced significant change. In 2017, consumers spent, for the first time ever, more money on restaurants than on groceries; the consumer landscape evolved once again as traditional brick-and-mortar restaurant dining began to cede to dine-out and order-in eating, with virtual restaurants becoming a popular alternative.
These changes set an important benchmark for the future of the industry. Then the COVID-19 pandemic hit.
Today’s food and beverage ecosystem is feeling the impact of current public health events across all areas. In-demand products are flying off the shelves as people prepare for the worst; weekly shopping lists now focus on the weeks and months ahead.
Traditional buyer/supplier relationships have dried up, and farmers must make tough choices on how to manage products that no one is buying.
From news reports on consumer behavior in food and beverage spaces to canceled trade shows to community action around restaurant closures and layoffs, everyone from consumers to industry stakeholders has felt the squeeze and is preparing for the months to come. Amid this, virtual restaurants have emerged as a resilient model.
The Rise of Delivery and Virtual Restaurants
In the last five years, restaurant delivery increased a solid 20% in popularity and is currently valued at $100B.
As consumer spending began to leak away from supermarkets and toward restaurant dining, the delivery category picked up momentum that would carry it to its current position: an independent, significant category in the food and beverage industry.
Virtual restaurants have bolstered this growth by enabling brands to adapt to consumer preferences without the need for a physical dining space.
With these recent, fundamental changes in consumer behavior, a new opportunity for expanded growth presented itself: restaurants as a conduit for CPGs.
Restaurants were well on their way to becoming critical for distribution and brand survival; some CPG companies were opening their own branded restaurant chains, and an entire ecosystem of branded restaurants was poised to emerge.
CPGs began to follow the consumer spending transition away from big box stores. That reality has now been complicated.
In addition to the challenges of high rents, bad capex, unpredictable customer relationships, and slow growth/scale in brick-and-mortar restaurants, CPGs, restaurateurs, and their investors now face different, pressing motivations to consider abandoning traditional storefronts entirely.
As physical locations face economic uncertainty, virtual restaurants offer a streamlined and cost-effective solution that’s rapidly becoming essential for survival.
The Shift to Virtual Restaurants
At the end of 2019, smart food brands were choosing to invest in virtual restaurants over brick-and-mortar locations.
That choice has now become an urgent prospect that restaurants and brands must consider seriously in order to survive.
Virtual restaurants (VRs), or ‘ghost kitchens,’ are ‘dark kitchens’ that only sell on food delivery apps and have no storefront.
VRs are more flexible, allowing several restaurant brands to operate from the same kitchen, maximizing revenues, increasing margins, and bolstering expansion possibilities.
As physical restaurant dining rooms are shuttered by health concerns and government mandates, use of delivery platforms has exploded.
Consumer interest in delivery in the month of March alone skyrocketed 582%. Since March, that interest has skyrocketed a further 764% MoM and has grown a jaw-dropping – yet unsurprising – 1,288% since this time last year.
Premised on delivery, lower setup costs (the average VR costs 25% less to set up than a traditional restaurant), and smaller operating budgets, virtual restaurants have become not only a clever tool acknowledged by some innovative brands but a necessary adaptation for the survival of the hard-pressed restaurant market.
Additionally, CPGs must adapt to this new reality. The market has fractured wide-open to present a new, albeit complicated, opportunity for brands to position their products for a consumer audience with changing motivations, preferences, and behavior.
Virtual Restaurants: The Ghost of the Future
In this evolving industry, companies need robust, real-time resources to make better-informed decisions — especially regarding virtual restaurants.
At Tastewise, our AI discovers the gaps between demand and supply both at home and in restaurants, allowing brands and restaurateurs to open the right virtual restaurants with the right dishes on the menu for the right audience.
We’ve built an advanced AI platform that translates billions of social media posts, online recipes, and the largest database of restaurant menus (and more!) into analytics and actionable insights.
Tastewise taps into this wealth of food and beverage information to unveil what is happening in a hyper-segmented world — down to a specific zip code, and all in real time.
Our technology allows users to navigate data on the emerging consumer demands, tastes, and motivations relevant to their particular needs, and crucial in today’s climate.
The current food and beverage landscape is murky. Traditional analytic strategies, on their way out of relevance before the world shut down, are now nearly obsolete; models like focus groups are near impossible, and surveys do not capture the dynamism of consumers’ lives, which change daily.
Consumers are ready for new forms of eating and drinking experiences, and restaurants, brands, and others must be ready to provide for their needs through virtual restaurants.
Enter the Power of Real-Time Data
In our digitized world, social media, online recipes, and delivery menus are more than ever before the proving ground for consumer behavior.
With data that was previously unavailable and the technology to analyze it in real time, Tastewise is at the forefront of industry innovation.
FAQs
How can food brands and restaurants decide on the best dishes to feature in a virtual restaurant menu?
Tastewise offers advanced data insights to help food brands and restaurants identify high-demand dishes for virtual restaurant menus.
By analyzing billions of social media posts, delivery trends, and consumer preferences in real time, Tastewise reveals the dishes and flavors consumers are actively seeking.
This data enables brands and restaurateurs to create menus that resonate with their target audience, maximizing the success of their virtual restaurant operations.
What tools can help CPG brands and restaurants gauge the potential success of launching a virtual restaurant?
Tastewise provides brands and restaurants with a powerful AI-driven platform that measures consumer interest in virtual restaurant concepts, specific dishes, and culinary trends.
By offering insights into location-specific demand, popular cuisines, and emerging dining preferences, Tastewise helps businesses assess the viability of launching a virtual restaurant, ensuring their concept and menu align with market needs and consumer expectations.