Dive Brief:
- Kroger on Friday announced the opening of its latest in-store ghost kitchen — a Kitchen United Mix location inside a Los Angeles Ralphs that serves meals from 10 different restaurants for pickup or delivery.
- Customers can order meals from multiple restaurant brands and have everything delivered together for one delivery fee.
- Kroger and Kitchen United first announced their tie-up last summer and plan to open additional in-store ghost kitchens in Texas later this month.
Dive Insight:
Kroger is testing out a few ghost kitchen models as it eyes the best ways to elevate its menu and digital meal ordering options.
Beginning in 2019, the grocer offered meals for delivery through Midwest operator ClusterTruck. The next year, Kroger discontinued the delivery-only service and moved ClusterTruck ghost kitchens inside two stores — one in Indiana and one in Ohio.
Unlike the ClusterTruck locations, which serve items ranging from salads to Cuban sandwiches under a unified brand, the Kitchen United Mix spot serves up offerings from multiple restaurants, including Wild Rice Asian Kitchen, Dog Haus and Fresh Brothers. Customers order using the Kitchen United Mix platform or app, as well as an in-store kiosk.
The value of the model is in drawing shoppers to Kroger stores and earning revenue from its partner restaurant brands. It’s similar to some of the ghost kitchens Walmart is hosting inside its locations, which feature brands like Quiznos and Saladworks.
Ghost kitchens offer a way for grocers to stay relevant with the growing ranks of shoppers who have made digital meal ordering a regular habit. They also offer a way for retailers to compete with restaurants, which have greatly elevated their takeout and delivery game during the pandemic, for share of stomach.
Grocers are serving up a variety of restaurant options at their stores as they try to elevate the food shopping experience, including dine-in spots and food halls. Kroger has dabbled in both of these options, with a food hall at its flagship store in Cincinnati offering three restaurant brands.
Because managing restaurants is a complex business, grocers are increasingly turning to partnerships with companies like Saladworks and Kitchen United that specialize in the channel. Started in 2017, Kitchen United offers ghost kitchen services to restaurants and now has more than a dozen Mix locations in places like New York, Chicago, California and Texas.
Kitchen United was an early innovator in the ghost kitchen space, and its partnership with Kroger signals an evolution in the segment. Kitchen United operates twelve ghost kitchens according to its website. The ghost kitchen company mostly operates large kitchens focused on digital sales and off-premise channels, with limited seating. The Kroger deal shows Kitchen United's willingness to diversify its model and build locations that rely more on foot traffic than delivery or takeout sales.
The Ralph's location, and Mix sites under development with Kroger, offers partner brands like Fresh Brothers Pizza, access to new consumer locations.
Kroger didn’t offer any details on the upcoming Mix locations in Texas, but according to the “coming soon” locations listed on Kitchen United’s site, there will be two spots opening in a Kroger later this month, one in Houston and another at a Dallas location.
