As food goes digital, virtual brands and ‘dark’ kitchens shine

Published November 15, 2021, 4:09 PM

by MB Technews


These days, many of us require staying connected online or going digital to live, work and play our best. With the new normal accelerating the digital transformation of many industries, many of our daily activities can now be done virtually, from paying bills and attending work meetings to watching movies and ordering food.

Aside from online shopping, food delivery ranks among the most-done online activities, as it allows us to avail one of life’s essentials safely and conveniently with a few taps on our phones. You may now even consider yourself an expert in using popular food delivery apps like foodpanda to satisfy your cravings. Virtual food tripping, made easy—but did you know that food brands themselves can go virtual, too?

What is a virtual brand?

As the name suggests, a virtual brand is one that doesn’t “exist”— physically, that is. That means it has no dine-in services or store front, and only offers food via delivery, including through 3rd party apps like foodpanda. “You might be surprised that some of your favorite brands on foodpanda are actually virtual brands,” explains Daniel Marogy, Managing Director of foodpanda Philippines. “The menus and food selections of these brands taste and look just as delicious and slick as what you see from “traditional” brands. It’s up to the customer to choose based on their preferences—and there’s an ever-increasing range of exciting brands to choose from.”

“That’s what makes virtual brands such a game-changer in our industry. It opens up many new options for foodies, while also giving food entrepreneurs the chance to thrive and succeed on a level playing field,” he adds. “Virtual brands can be sold from any licensed food establishment, meaning that smaller operators who have struggled to cover the cost of their dining space since the pandemic now have a means to grow their sales density and fully utilize the fixed cost of their restaurant space”.

Virtual brands are fast becoming a global trend. In the U.S. for example, there are brands that are even being launched by Hollywood celebrities and top YouTubers, and their delivery orders are skyrocketing.

In the Philippines, the list of virtual brands is also growing fast, and many of them are exclusively available in the foodpanda platform. For those who love honest-to-goodness Southern style fried chicken, there is Jackson’s Fried Chicken, which also offers Asian-style dishes. For those into Korean food, there is K-bites which specializes in Korean street food treats. If tea is your thing, you should definitely try Wantea, a milk tea alternative that uses authentic loose tea leaves from around the world, like Earl Grey from England, Black Tea from Thailand, and Matcha from Japan. If desserts are what you’re craving then you can’t go wrong with premium Filipino ice cream brand Puro; and if Filipino-Asian cuisine is your favorite then fill your plates with Simot, a brand that puts a fresh spin on adobo fried rice, bagoong rice, and chahan.

Virtual kitchens: dark, shared, and everything in between

The list is incredibly diverse, providing foodies with myriad options from these brands’ kitchens—which, of course, are actual physical kitchens, but due to their delivery-only service, these kitchens have also come to be known as virtual kitchens or “dark” kitchens. These kitchens are amazingly agile workspaces, and because they are focused purely on food preparation and delivery, they can do so much even with just a small space.

According to Namee Sunico, foodpanda’s Head of Shared Kitchens, while there are also benefits to having a brand with a physical presence—for one thing, the restaurant experience can add to the overall brand experience—virtual brands that run dark kitchens carry plenty of advantages, too. “Because you are working with a relatively smaller physical footprint and focused mostly on digital marketing, you can significantly lower your operating costs,” she explains. “There is a lower barrier to entry for brand owners as there is no dine-in space to spend on in terms of construction, maintenance, and staff.”

“And by working with third party platforms like foodpanda, these brands get the added benefit of having a data-driven approach when it comes to tracking their performance and making decisions as far as the evolution of the brand,” she adds.

Scaling up through shared kitchens

Even as costs can be brought down by going digital, these brands also have a very unique opportunity to scale up their operations—by utilizing the kitchens of other operators, including those of established or traditional brands.

“Through this innovative business model, a brand can become truly virtual as their food concepts are brought to life through another brand’s kitchen, with its in-house staff, equipment, and ingredients. It is a great way for virtual brands to scale up as they tap more shared kitchens, and it is quite beneficial to the kitchen provider too, as it allows for optimum utilization of their rent, utilities and manpower,” Marogy notes.

A triple win

foodpanda is at the forefront of this exciting business model as they help in not just onboarding virtual brands to their delivery platform, but also serving as the bridge between brands and shared kitchens. They also help ensure that customers get the best food experience every time by ensuring consistency in quality. “We provide on-site as well as virtual support from brand onboarding, training, and operations to ensure consistent food quality. We also provide manuals and continuous improvement support to assist our vendor partners in their operations, just like franchised brands, minus the massive franchising fees,” Ms. Sunico explains.

“It’s great for everyone—the virtual brands offering amazing opportunities for a new generation of food entrepreneurs, the underutilized kitchens and industry assets seeing greater sales throughput, and the customers getting even more delicious choices. It’s a triple win, and something that should put a smile on all our faces during these times,” says Marogy.