By Ed Avis
Like thousands of restaurant owners, Kurt Riske saw business crater during the pandemic. But the situation gave Riske a chance to try something that was already brewing in his mind: He launched a new concept focused on Los Sombreros Mexican Restaurant’s beloved carnitas. And he made it delivery-only.
Carnitas Way, which uses the kitchens at the three Arizona locations of Los Sombreros, is a “ghost restaurant” that launched in July 2020.
“We were just grasping for straws when the pandemic hit, but for me this was a perfect opportunity,” Riske says. “That’s the magic of a ghost kitchen. You just have to get creative with what you have and put in the time and energy.”
A Pandemic-fueled Trend
Ghost restaurants, also known as virtual restaurants, were already growing in popularity before COVID-19. But the pandemic fueled the trend because it allowed restaurants to serve customers without bricks-and-mortar locations.
Carnitas Way is an example of the primary form of a ghost kitchen — one run by an existing restaurant. Riske says the idea of a restaurant focused on Los Sombreros’ carnitas, which he calls “ridiculously good,” popped into his head shortly after he and a partner bought the restaurant four years ago. The concept remained just an idea until the pandemic.
Shortly thereafter, companies that run commercial kitchens specifically for ghost restaurants began contacting him to see if he wanted to launch something.
“I kept getting calls from ghost kitchens asking if we wanted to get into them, but I looked at the idea and said, ‘Why don’t we just use our own kitchens?’” Riske remembers.
So, he gathered his chefs together and started brainstorming ideas for a menu that would take advantage of the restaurants’ carnitas in a way that stood up well when delivered or taken out. They focused on burritos and bowls and eventually settled on eight items, including two meatless options. Riske and his partners next developed the brand (the concept has a Southern California/Baja beach vibe) and the logo, and connected with DoorDash and GrubHub to handle deliveries.
Since they already had the equipment and staff in the Los Somberos kitchens, launching Carnitas Way simply required redeploying those assets.
“The bodies were already there for it, and there were no extra products needed. It’s been a great thing,” Riske says. “It basically created a mini brand without the upfront cost of restaurant space.”
Does Carnitas Way compete with Los Sombreros? Riske does not think so. The menu for Los Sombreros is more chef-driven and complex — the menu includes Puerco en Chipotle and Camarones con Espinicas, for example — while Carnitas Way’s specialties are designed to be quickly made and consumed. So even though Los Sombreros does offer delivery and takeout, it’s not likely Carnitas Way is cannibalizing the parent company’s customers.
Because both concepts use the same kitchens, there are times the limited grill space gets crowded, but that has not been a serious problem — at least not yet, Riske says. He reports that Carnitas Way is already profitable.
“We already had the products in house, so it’s really just extra cash flow coming in,” he says. “I’m excited for the future of it.”
Non-Mexican, Commercial Kitchenor Branded Models
A ghost kitchen can be a way for a Mexican restaurant to grow its business, but it also can be a way for a non- Mexican restaurant to tap into the taco, burrito, and enchilada market. Several restaurants that do not normally serve Mexican food recently started ghost kitchens serving Mexican cuisine.
For example, Veggie Grill, a national chain that features vegetable-forward cuisine, launched Más Veggies Taqueria in January. The new concept uses existing Veggie Grill locations to create plant-based Mexican dishes such as Shredded Jackfruit Chipotle Carnitas, Cauliflower Asada, Savory Tex-Mex Taco Meat and Crispy Baja Fish in the form of tacos, burritos, nachos, and bowls. The dishes are available only for delivery; the company partners with PostMates, DoorDash, GrubHub and UberEats.
“As restaurants nationwide remain[ed] closed or [were] operating with drastically reduced seating capacity for safety reasons, Veggie Grill seized the opportunity to explore alternative ways to reach conscious foodies,” said T.K. Pillan, Veggie Grill’s co-founder, in a press release. “The virtual Más Veggies Taqueria helps accelerate the plant-based movement while leveraging existing Veggie Grill kitchens nationwide.”
Another way some companies are launching virtual restaurants is by using commercial kitchens instead of regular restaurant kitchens. Doing this allows them to expand the idea well beyond the footprint of their own restaurant. Trejo’s Tacos, owned by actor Tony Trejo, launched in 2016 and has seven bricks-and-mortar locations in California. The company has added three ghost kitchens to its portfolio — one in Miami, one in Pasadena and one in Chicago — that have let it grow without the usual investment in real estate or equipment. For example, the restaurant’s location in Chicago is in Kitchen United, a ghost kitchen that also houses a dozen other virtual restaurants, including one called Bad Ass Burritos.
An advantage of using a multiple-restaurant commercial virtual kitchen is that the third-party delivery services can pick up orders from several restaurants — even within one order — without making extra stops.
Finally, partnering with an existing virtual brand is a third approach to riding the virtual kitchen wave. In this case, the brand owner handles the marketing and menu creation, while the restaurant fulfills the orders. Mario’s Tortas Lopez, which is part of GrubHub’s “Branded Virtual Restaurants” portfolio and has locations across the country, is one example of this model.
Marketing and Management Challenges
Unless a restaurant partners with an existing virtual brand, marketing a ghost restaurant is a significant challenge. After all, there is no bricks-and-mortar location to attract attention.
“I would say putting in the time and energy on the upfront marketing is one of the biggest takeaways from my experience,” Riske says. Managing the relationship with the third-party delivery companies is another essential task, because ultimately they provide a large number of customers and handle the face-to-face interaction with customers.
“Staying on top of the relationships with the third parties is almost a fulltime job if you want it to be,” Riske says. “There are always different incentives to keep track of, and ways to get on the front of the order pages. That helps drive the business. If you have someone dedicated to that, you’ll have more success.”
Incidentally, success in the virtual restaurant world might create a “real” restaurant opportunity for Riske: He hopes to open a bricks-and-mortar location of Carnitas Way by 2023.
“We feel good about how good the burritos are and the beach theme vibe of the brand,” he says. “A bricks-and-mortar space for Carnitas Way will be a place people can relax in a feel-good ambience and dig into the best burritos they’ve ever had.”