Dive Brief:

• Reef has acquired 2nd Kitchen, a virtual kitchen startup that allows hotels and other businesses to serve food without operating their own onsite kitchens, the company announced Tuesday. 
• 2nd Kitchen will be folded into Reef's existing branding and operate as part of Reef's hospitality division, but the 2nd Kitchen leadership team, including its three co-founders, will remain in place.
• This acquisition strengthens Reef's position in hospitality, and shows the company's expansion is still heating up. In October, Reef bought logistics partner Bond, which offers delivery and distribution center services to e-commerce brands. 

Dive Insight:

The 2nd Kitchen acquisition shows North America's largest parking lot and ghost kitchen operator is serious about expanding its food service business beyond its signature ghost kitchen vessels, which have faced serious health and safety concerns in recent months.

Reef's flurry of deals over the summer and fall saw the company commit to building thousands of ghost kitchens over the next five years. But Reef has also begun acquiring companies that align with its strategy, and 2nd Kitchen looks like an advantageous match. 

The company operates in a number of major markets, including Chicago, New York City, and Miami. 2nd Kitchen provides foodservice to more than 100,000 rooms and common areas, and works with a number of hotel brands, according to a press release. At businesses using its services, 2nd Kitchen handles the entire foodservice process, including menu setup, payment, order fulfillment and customer service. Together, Reef and 2nd Kitchen will allow businesses to offer foodservice without investing in physical infrastructure, per the press release. 

But 2nd Kitchen sees itself primarily as a technology company.

"At its heart, 2ndKitchen is a data company," Nick Anastasiades, CEO and co-founder of 2ndKitchen, said. "Our business' foundation is its highly differentiated technology that allows businesses to tailor their food experience to their exact needs."

Although the terms of the deal were not disclosed to the press, the statement by Reef said the founders of 2nd Kitchen will focus on the global expansion of Reef’s hospitality.

Reef has already targeted overseas growth. The company is backed by Mubadala, a sovereign wealth fund headed by Deputy Supreme Commander of the United Arab Emirates Armed Forces, Crown Prince Mohamed bin Zayed. In November, Reef acquired iKcon, a ghost kitchen company based in the UAE, to accelerate Reef's expansion through the Middle East. 

After several years of consistent growth, rival ghost kitchen operators like Kitchen United have begun buying up competitors and diversifying their offerings as well. C3, another major virtual player, has also diversified its business model, opening a large food hall in Manhattan to showcase its portfolio of brands.