Dive Brief:

• Panda Express will open Panda Digital Kitchen, its first delivery-only location, in mid-March in San Francisco, the company said in an email to Restaurant Dive.
• With the addition of Panda Digital Kitchen, the company said it will be able to enter new markets and create spaces where its associates can focus on food orders. Customers will be able to order from Panda Delivers or through third-party aggregators, the company said. 
• Since the start of the pandemic, Panda Express has more than tripled its delivery business following an increase in demand from consumers, the company said. Last year, it launched its own delivery platform, Panda Delivers, where consumers can order directly from restaurants instead of on third-party delivery aggregator sites.

Dive Insight:

The delivery-only kitchen is the first step in the chain's plans to offer faster dining solutions for guests on-the-go, and the company will continue testing different concepts in 2021 to tap into this trend, Panda Express said. Associates will be able to complete orders more efficiently for takeout and delivery customers with this specialty kitchen, the company said. 

Panda is also considering additional markets and developing more restaurant concerts with new innovative menu items to deliver food to customers on the go, and the company said it will share more info around these launches later in the year. 

The company also set out to hire 30,000 employees last year when dining rooms started to reopen for takeout to help restaurants with contactless services, curbside orders, drive-thrus and expedited to-go and online orders alongside following new health and cleanliness procedures, according to Nation's Restaurant News.  

Digital is becoming a big business across the QSR segment, with Wingstop surpassing $1 billion in online sales last year while Chipotle reached $2.8 billion in the same period. Wendy's is on its way to having 10% of its sales come from digital. Both Wingstop and Wendy's have been expanding their ghost kitchen footprints as well. Wingstop has about 13 ghost kitchens with plans to expand in the U.S. in key markets. 

Ghost kitchens can allow chains to rapidly expand without having to invest heavily in real estate. Nathan's Famous and Wow Bao have quickly grown their footprints using a host kitchen model where they partner with other operators to create virtual-only kitchens in unused kitchen space. Nathan's, which has partnered with Franklin Junction and Reef in the past, opened its 100th kitchen in February less than a year after it began exploring the model. Wow Bao expects to reach 1,000 locations by the end of this year through its partner kitchen program, compared to 150 locations in 2020.