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In the case of "virtual restaurants", centralized, high volume kitchens are much more cost efficient - for example they can get salmon for $6/pound instead of t

by petra 8y ago

In the case of "virtual restaurants", centralized, high volume kitchens are much more cost efficient - for example they can get salmon for $6/pound instead of the $9-$11/pound restaurants pay, and can save maybe up to 85% on labor. So thinking that a small business could play in the "virtual restaurant" industry, is probably not realistic.

1337biz 8y ago
I think the main advantage of small restaurants is the labor advantage. Owner, family, friends are willing to work at ridiculously low (no) wages until there is a decent profit.
Eridrus 8y ago
And yet, most of the centralised places have shut down. I'm thinking of Maple and others, which I enjoyed using in NYC, and yet they are gone now.
- petra 8y ago
  Since this new market is just being created, it makes sense that a lot of companies will be shut down, in that search for the best business model. One possible guess is: in this very competitive market it's really hard/expensive to get new customers. But here, UBER had a big advantage. Also, customers aren't loyal. But in the case of UBER, even if those customers change a virtual restaurant brand, they're very likely to stay in the UBER app, and UBER may have some power to guide them. And if many "virtual restaurants" share the same highly-efficient commercial kitchen, and aggregate their orders from suppliers - they still get most of the efficiencies of a large commercial kitchen.
tsumnia 8y ago
But I think that's part of the barrier of entry for a small restaurant. I enjoy supporting local food trucks, and while the food is good, the workflow is terrible. If you look at a quick service restaurant as a logistics company, they are successful at getting completing the transaction and delivery quickly. For a small restaurant to be successful, while quality is still a necessity, their pseudo "supply chain management" process needs to avoid as many bottlenecks as possible.

by petra 8y ago

1337biz 8y ago

I think the main advantage of small restaurants is the labor advantage. Owner, family, friends are willing to work at ridiculously low (no) wages until there is a decent profit.

Eridrus 8y ago

And yet, most of the centralised places have shut down. I'm thinking of Maple and others, which I enjoyed using in NYC, and yet they are gone now.

petra 8y ago
Since this new market is just being created, it makes sense that a lot of companies will be shut down, in that search for the best business model. One possible guess is: in this very competitive market it's really hard/expensive to get new customers. But here, UBER had a big advantage. Also, customers aren't loyal. But in the case of UBER, even if those customers change a virtual restaurant brand, they're very likely to stay in the UBER app, and UBER may have some power to guide them. And if many "virtual restaurants" share the same highly-efficient commercial kitchen, and aggregate their orders from suppliers - they still get most of the efficiencies of a large commercial kitchen.

tsumnia 8y ago

But I think that's part of the barrier of entry for a small restaurant. I enjoy supporting local food trucks, and while the food is good, the workflow is terrible. If you look at a quick service restaurant as a logistics company, they are successful at getting completing the transaction and delivery quickly. For a small restaurant to be successful, while quality is still a necessity, their pseudo "supply chain management" process needs to avoid as many bottlenecks as possible.