- Thousands of virtual brands are flooding delivery apps like Uber Eats, DoorDash, and Grubhub.
- Some consumers mistake these ghost brands for real brick-and-mortar restaurants.
Man vs Fries. Mama Roma. El Taco Loco. The Salad Station. Pizza Mania. MrBeast Burger.
One might think these are niche concepts serving diners classic American staples in restaurants across the US.
But, consumers are not dining inside any of these restaurants. Instead, they're ordering takeout or delivery from them on apps like DoorDash.
Menus made in ghost kitchens have erupted on delivery apps over the past five years. Uber Eats, for example, first began helping restaurants develop delivery-only brands in 2017. By 2019, Uber had more than 3,000 virtual restaurants listed in its app in the US. Today, the company said its app hosts "tens of thousands of virtual restaurant storefronts." But it's difficult to know if you're ordering from one.
These 'virtual restaurant' menus typically hawk one type of dish, like chicken wings. And most operate inside established restaurants looking to boost sales by creating their own menus or licensing and selling one or two delivery-only brands. Some virtual restaurants operate in food trailers run by Reef Technology, ghost kitchens like Travis Kalanick's CloudKitchens, or food halls like Kitchen United.
According to a joint report by Grubhub and the market-research firm Technomic, 41% of independent restaurants are operating virtual restaurants. Many of those operators say they plan to add multiple virtual brands to their existing kitchens in the next 12 months.
When the delivery movement accelerated during the pandemic, virtual restaurants went from an innovative menu trend to a bonafide disruptive industry. The trend spawned virtual restaurant companies such as Nextbite, Virtual Dining Concepts, Absolute Brands, and C3. The segment has the potential to become a $ 1 trillion business by 2030, according to Euromonitor.
Many diners still want their food from a 'real' restaurant, though. According to the National Restaurant Association's latest "State of the Industry" report, 74% of the adults surveyed said it was important for their food to be delivered from a place with a physical location that was accessible to the public.
But how do delivery users know when they're ordering from a virtual restaurant or a brick-and-mortar food joint?
Some concepts are easy to spot as they are well-publicized brands backed by celebrities, such as Packed Bowls by Wiz Khalifa, DJ Khaled's Another Wing, Guy Fieri's Flavortown Kitchen, and Mariah Carey's Cookies.
Still, some with generic names like The Chef Burger or Plant B are easy to mistake for brick-and-mortar restaurants.
Here are some tips on how to discover if a restaurant you're ordering from is a virtual brand:
DoorDash
Of the three major apps, DoorDash is the most transparent when it comes to identifying virtual brands.
DoorDash has been labeling virtual brands on its app for more than a year.
"Beyond disclosing the address where meals are prepared, DoorDash has labeled virtual brands with a standalone store page banner since March 2021," the company said.
The label typically appears at the top of the restaurant's page before the menu.
For example, DoorDash labels MrBeast Burger as "A concept from MrBeast. Brought to you by Virtual Dining Concepts."
Virtual Dining Concepts is a company that creates delivery-only brands and licenses them to ghost kitchen operators like Reef Technology. MrBeast Burger is one of the company's most successful virtual brands, delivering from more than 1,000 locations, according to the BBC. MrBeast Burger opened its first brick-and-mortar restaurant in September to throngs of fans.
DoorDash provides a "learn more" section for virtual brands, calling them "stores created exclusively for delivery or pickup through services like DoorDash."
"They may be owned by or closely affiliated with an existing company. They may also prepare their menu out of another store's facilities or in a kitchen without a storefront. We'll clearly label virtual brands, so you always know when you're ordering from one."
Uber Eats and Grubhub
Uber Eats and Grubhub do not label virtual brands.
"These brands are labeled as restaurants in the Uber Eats app. Our perspective is that a virtual restaurant is a real restaurant," Uber Eats told Insider.
With a bit of sleuthing, there's still a way to determine if you're ordering from a ghost restaurant from these apps.
All three delivery providers disclose the addresses of restaurants on their app – virtual or brick-and-mortar.
Using a MrBeast Burger in Orange, California, on Grubhub as an example, here's how I determined that it was a virtual restaurant.
Plug the address on Mr. Beast's listing into Google Maps. In this case, the address is 1500 East Village Way. There's a Red Robin restaurant that shows up with the same address on Google. I called the restaurant to double-check, and an employee confirmed that the chain sells MrBeast as a delivery-only menu. It is unavailable to order for dine-in or on Red Robin's app.
On Uber Eats, it works the same. For example, a MrBeast Burger in Houston, Texas, has the same address as Kroger.
With help from Google, I learned the supermarket chain has a Kitchen United ghost kitchen inside the store.
Another tip? The Miami address for the virtual brand Sam's Crispy Chicken is listed as "MIA07-2" on the Uber Eats app. Whenever you spot an abbreviated city or landmark location like that, it means the menu is prepared inside one of Reef Technology's food trailers. The ghost kitchen, which has struggled with operations over the past year, works with virtual brands and chains like Wendy's.
Are you a delivery app insider with insight to share? Got a tip? Contact this reporter via email at nluna@insider.com or via Signal encrypted number 714-875-6218.