Dive Brief:

• Bon Appetit launched a delivery-only virtual restaurant Tuesday in partnership with Grubhub called Bon Appetit, Delivered, according to a company press release. The concept will feature the most popular dishes from its magazine, website and Instagram feed.
• Multi-concept restaurant group Lettuce Entertain You Enterprises will provide a virtual storefront.
• The offering will be available exclusively in Chicago and features lunch and dinner options.

Dive Insight:

Bon Appetit’s decision to tap Lettuce and Grubhub for its restaurant debut will provide it with a low-risk, streamlined way to see whether there is a sufficient market for its retail food offerings. Ghost kitchens lack the serious overhead costs that opening a full brick-and-mortar restaurant carries, and spreads some of the risk among the other parties involved.

Making its dishes available through Grubhub and a ghost kitchen also provides Bon Appetit with a readymade customer market that's already eager to try innovative food offerings in lieu of having to launch its own standalone marketing initiative. If the business doesn't quite hit the initial projections or if it turns out that consumers aren't hungry for Bon Appetit's fare, the endeavor could be wound down and filed away as a limited-time offering.

Lettuce has also recently partnered with Grubhub and Whole30 to provide the first Whole30 branded restaurant. The establishment is also located exclusively in Chicago. Meanwhile, Grubhub competitor Uber Eats is investing in virtual restaurants as well, and restaurant group Green Summit Group is experimenting with the ghost kitchen concept in New York and Chicago. Kitchen United received a $40 million investment last week that will help it enter into New York City and beyond. 

Grubhub appears to be placing strong bets on the virtual restaurant segment. It shared a blog post this summer highlighting how partner restaurants can boost sales and test new menu offerings through ghost kitchens, while also inviting them to test the concept on its platform. This marks a transition from food delivery providers simply providing last-mile logistics to acting more as partners with the restaurants that they service. The shift could be part of the ongoing competition among delivery companies and their continued efforts to differentiate with new offerings and greater convenience for customers. On the other hand, this move also has worried some restaurateurs concerned that third-party delivery apps are using customer data to create banded restaurants that compete against them. 

Next to ghost kitchens, stand-alone pick-up locations could be another front runner in the next generation of restaurant experiences. Starbucks recently announced the upcoming launch of a pickup-only location in New York City. The new express concepts won't replace traditional cafes, however. Depending on how the pilot goes, the coffee retailer could expand the concept to other densely populated areas like Chicago, Seattle, San Francisco, Boston and Los Angeles. Chick-fil-A also has a new storefront kitchen concept that focuses solely on catering and delivery.