Case Study: Redheart’s Success Story with CloudKitchens
Meet Redheart: On a mission to build a health and wellness ecosystem in the heart of Cleveland. See how owners Michael Zhou and Danny Lee grew their food business with CloudKitchens.
Redheart scaled their food business with less risk and capital
Overview
After finding a need for a variety of healthy food at an affordable price, owners Danny and Michael launched Redheart Brands, offering new and unique flavors that support a healthier lifestyle. Danny and Michael always wanted to have their own business reinventing classic dishes to be healthier, without sacrificing flavor. With ghost kitchens, they've been able to launch a variety of food business brands all under one roof. With wings, tacos, and hotcakes, they're churning out unique dishes with Asian fusion.
One of their brands, Seoul City Wings, originated from their love for the variety of sauces offered during their travels in Asia, which brought the idea for them to bring these flavors back to the states. With chicken being a prominent ingredient in most of their healthy meals, they were determined to create a revamped chicken wing brand, with a healthier twist.
What made CloudKitchens the right fit for their restaurant brands?
Before ghost kitchens, Danny and Michael were searching for a low risk alternative to get their new brands up and running. Fast forward to their partnership with CloudKitchens, where they're operating multiple successful restaurant brands all out of one single ghost kitchen.
“Our business has been growing steadily since we started with CloudKitchens. We didn't expect instant success with promotions and advice, but we did think that our business could grow with time and effort."
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What is a ghost kitchen?
Ghost kitchens, also known as dark kitchens or virtual kitchens, are commercial kitchens built for food delivery. They’re located within the delivery radius of a high volume of online customers, rather than high foot traffic areas. With ghost kitchens, there’s no physical storefront or dining area, so you only need a few back-of-house staff members to fulfill online orders.
How does a ghost kitchen work?
In a ghost kitchen, your restaurant is focused on delivery rather than dine-in. When eaters order your food online, you’ll prepare it from your ghost kitchen, and hand it off to a fulfillment team to get the order over to the right delivery driver. This gives restaurateurs a low cost, high efficiency model to get the most out of delivery.
Are ghost kitchens profitable?
Yes. Ghost kitchens allow restaurateurs to increase profitability by maintaining the essential elements of a restaurant while cutting costs on labor, overhead, and wasted food while reaching a higher volume of customers ordering online. Plus, you can run multiple virtual brands out of a single ghost kitchen to increase revenue without the extra overhead.
Why are ghost kitchens so popular?
Ghost kitchens are rising in popularity because they’re a lower cost alternative to operating a traditional restaurant. They’re also focused on delivery, which has grown 300% faster than dine-in since 2014. That means restaurateurs are using ghost kitchens to future-proof their business and accelerate growth.
How does a ghost kitchen help your restaurant grow?
Ghost kitchens help restaurateurs grow their business by doing delivery right. The way we dine has changed, and ghost kitchens allow restaurant operators to capture food delivery demand without sacrificing their bottom line. They’re also a great way to expand to new markets without spending time and money on a traditional restaurant buildout. You can easily expand your restaurant brand to different cities across the country such as Los Angeles or New York.
How much do ghost kitchens cost?
The cost of ghost kitchens varies by market, space, and services. Compared to a traditional restaurant, they’re a much lower cost alternative on both upfront capital and ongoing operating costs. You can get started in a ghost kitchen with as little as $30K, instead of $1M+ for brick and mortar buildout.
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