Trend Watch: Ghost Kitchens and Virtual Dining Brands on College Campuses

Digital technology has impacted nearly every aspect of our daily lives, bringing new consumer expectations and preferences. From how we learn, work and connect with others to how we shop, dine and even care for our health, digital tools have driven changes in the way consumers choose products and interact with businesses and other organizations.

While some technologies, such as mobile ordering apps, are simple and easy to adopt, other innovations may require a little more willingness to rethink how we operate. One recent example is the re-envisioning of dining to include ghost kitchens and virtual dining brands.

As the COVID-19 pandemic unfolded, restaurants quickly realized they needed to identify new techniques for attracting and retaining customers in a way that was safe, convenient and practical. The need for operational efficiency also became more urgent, as eateries were faced with difficult financial challenges created by decreased traffic. Ghost kitchens and virtual dining brands emerged as opportunities to expand a dining venue’s reach while also offering the convenience and flexibility that had become paramount to consumers.

What is a Ghost Kitchen?

Although the term may conjure up images of a friendly apparition manning a grill, a ghost kitchen is actually a unique operating model in which a professional food preparation facility serves only delivery and takeout orders. Ghost kitchens have all the equipment needed to prepare meals, often from multiple restaurant menus at once, but have no dine-in or customer-facing areas.

Ghost kitchens allow guests to order from their favorite retail venues via a mobile dining app and pick their food up from one centralized location. This model extends availability and operating hours. Ghost kitchens also provide a greater variety of dining choices, especially where operating space may be limited. The added convenience and array of options improve customer satisfaction and loyalty.

What is a Virtual Dining Brand?

A virtual dining brand is similar to a ghost kitchen, but it offers only online ordering—there is no physical store for the brand. It is typically a separate food concept that operates out of an existing restaurant’s kitchen. Virtual brands operated out of existing restaurants may be a twist on the existing eatery’s menu or may feature entirely different food. For example, a casual Tex-Mex restaurant may also operate a virtual restaurant that serves more upscale Mexican fare, or an Italian restaurant may operate a virtual bakery brand from within its kitchen. A virtual dining brand can operate out of a ghost kitchen or out of an existing kitchen that has available space.

Bringing New Ideas to College Campuses

College students are enthusiastic early adopters of technology, making campuses a great place to introduce innovative new ideas. Students are quick to recognize the value of new modes of accessing the products and services they need. Furthermore, today’s students are digital natives who have grown up in a world shaped by constantly evolving technology, so they expect technology to be seamlessly integrated in a way that enhances the consumer experience. And the rapid shifts toward convenience and technology-enhanced experiences over the last few years are here to stay, with more than 60% of Gen Z and Millennials planning to continue using the digital channels they adopted or increasingly used during the pandemic.

In addition, college-aged consumers tend to be curious about new foods and seek adventurous, flavorful dishes. They have also grown accustomed to having nearly any food imaginable available through mobile dining and delivery services. Campuses may struggle to offer the variety of dining options students expect due to space constraints and other operational challenges. Ghost kitchens and virtual restaurants alleviate the constraints of limited space and offer a practical way to meet the demand for more dining options, enabling campuses to substantially increase menu variety and improve guest satisfaction.

Sodexo began implementing a ghost kitchen operating model in 2020 at select college campuses. Some campuses have gone from offering pick-up and delivery from five restaurant concepts on campus to 10 by implementing a ghost kitchen model. For example, Bentley University in Massachusetts doubled the number of menu concepts available by utilizing this unique model.

In partnership with Virtual Dining Concepts, Sodexo recently began offering three delivery-only options on college campuses. Virtual Dining Concepts include celebrity-owned and other brands with menus that feature diverse cuisines. The newly launched brands include MrBeast Burger, Mariah’s Cookies and Buddy V’s Cake Slice. Students place orders for these exclusive brands through Sodexo’s mobile dining app and enjoy freshly prepared items delivered to them on campus. The rollout began at Gonzaga University in Spokane, WA, and will expand to other campuses soon.