The business shutdowns during the pandemic created a lot of idle commercial kitchen space, which created an opportunity for Viggnesh Kandasamy and Vijayaraj Gopinath, cofounders of MayaEats, which has pioneered the virtual and ghost kitchen industry in the United States.
Ghost kitchens are one step further than the traditional digital advancements in the hospitality industry. Digital menu boards are among the most popular types of digitization. Ghost kitchens are a fast and efficient way of opening a restaurant business without any major overheads.
Just as Uber allows people to make some money with their car, MayaEats helps restaurant owners to establish or use a ghost kitchen, there by generating revenue from the vast number of underutilized kitchens, and kitchen staff, during the pandemic.
MayaEats recently launched its new One Stop Kitchen (OSK), which partners with under-performing restaurants. OSK renovates and digitizes those restaurants, converting them to fast casual restaurants and fulfillment centers with investment. OSK currently has 10 centers in the San Francisco Bay area and plans to expand into Los Angeles, Chicago and other U.S. cities.
We asked Viggnesh Kandasamy and Vijayaraj Gopinath about what changes to the restaurant business over the past two years are likely to last, and how the growth of ghost kitchens into an industry is creating new revenue for restaurants that two years ago feared for their survival.
Let’s start by defining some terms. What is a “virtual restaurant” and what is a “ghost kitchen,” and what does one have to do with the other?
Vijayaraj Gopinath: Glad you asked, there is so much misconception and confusion around these terms, so let’s break it down.
Virtual restaurants are food concepts which have delivery only menus and are prepared out of an existing restaurant kitchen. For example Fire Biryani is one of the very popular virtual brands created by MayaEats and has over fifty locations. It is hosted inside an already existing restaurant brand and provides spicy, tasty & local south Indian flavors of biryani for delivery only.
Ghost Kitchens are spaces rented by people who want to launch a food concept mostly targeted for delivery purposes. For example, if you have a new food concept idea you can rent a kitchen from Cloudkitchens, Kitchen United, etc. and it can go live in less than a month. We are innovating this model using OneStopKitchen which utilizes the existing kitchen space similar to AirBnb and Uber to build ghost kitchens which allows it to be decentralized, distributed and scaled faster.
The Covid-19 pandemic has, as is well known now, hammered the restaurant industry, yet it was during the pandemic that you got the idea for Maya Eats. What was it about the crash in business and all that underutilized kitchen space that inspired your startup vision?
Viggnesh Kandasamy: Our journey began with our digital order aggregation software product OOMS (Online Order Management System). During March 2020, at the beginning of the pandemic, we were making door-to-door sales for OOMS. We had visited at least a thousand restaurants in the South Bay area. This allowed us to learn more about how the pandemic made running an already difficult business, such as restaurants, even more difficult. That’s where this idea of starting a virtual restaurant company started. When a distressed restaurant owner wanted to launch a new concept but was afraid of bringing it to life due to logistics, we knew we could step in. With full pride, I would say, MayaEats was founded by our restaurant partners, and run by us. We started helping this owner with his new menu, and recipes, and launched it on all delivery platforms, ran a digital marketing campaign, and saw huge sales. MayaEats’ biggest achievement came when we paid $100,000 to a few restaurant partners during the peak of the pandemic, which was a great motivation for our entire MayaEats team to work even harder.
For as bad as the pandemic has been on restaurants, that is a very tough business even during boom times. One party of four cancels at the last minute and you’ve lost money on the night. Will Maya Eats still have a mission when, and if, people resume something like their pre-pandemic dining habits?
Vijayaraj Gopinath: I do believe the dining experience at some point in the future will catch up with the pre-pandemic rate. It is far-fetched for me to think that people are going to primarily get food delivered to their homes, but the habits and comforts of on-demand food have certainly increased during the pandemic and are here to co-exist. Having said that, the nature of the restaurant business doesn’t allow you to over optimize, like you said, a party of four cancels at the last moment, and you have lost that money unless you are a red hot restaurant and have a big waitlist every night. How we are helping an underutilized kitchen using MayaEats and OneStopKitchen (OSK) is to expand their offerings in the off premise sales with the exception of OneStopKitchen, which targets walk-in customers as well. Overall, our goal is to push the utilization rate of all our restaurant partners by x% by launching new niche virtual concepts. Take for example The Vegan Lasagna Garden. It is not easy to find a vegan lasagna in the market, but many in the vegan community are looking for such novelty concepts. Now though a partnership with MayaEats, The Vegan Lasagna Garden are pushing their utilization rate up. Currently MayaEats is preparing to launch our next vegan concept Mac & Vegan (a true vegan Mac & Cheese).
Tell us more about your ghost kitchen concept, OneStopKitchen. What does it offer to a restaurant that is breaking even, at best, and needs a new source of income?
Viggnesh Kandasamy: Given our experience of running MayaEats for several years now, we have received many inquiries from our restaurant partners. For example, we’ve had requests to help set up kiosks, restaurant websites, and some restaurants even wanted us to help them to expand to new locations. They gave so many ideas on how we could help them. That’s how OneStopKitchen came alive. I call One-Stop Kitchen a restaurant/retail infrastructure as a service (RIAS), which is highly scalable at low cost. Think of it as a true Airbnb for the restaurant model. We use this infrastructure to launch as many food concepts as possible. It can be our home brands or it can be any of the top brands who want to scale at zero cost. There are three parts to the OneStopKitchen platform.
- Restaurants who have a physical location (this could be brick and mortar or a food truck) and want to be a OneStopKitchen fulfillment center. Once they partner, we invest in them by building the complete infrastructure which allows us to launch any brands in that center. Many of our current OneStopKitchen centers are in a downtown area with high foot traffic and open very late, until 3 AM.
- Top brands who want to scale up to multiple locations at zero cost. On average, it takes a minimum of $300,000 to start a decent sit-down restaurant. However, by partnering with OneStopKitchen, we can take their food to multiple locations at zero cost.
- With the above-mentioned setup, OneStopKitchen lets you mix and match food from top local restaurants into a single order. Now, a family or friend who wants to order different cuisine at the same time is possible with OneStopKitchen. Someone can get Mexican, Thai, Mediterranean, or any other cuisine all in a single order. For consumers, OneStopKitchen functions as a virtual food hall.
With 50% month on month growth, OneStopKitchen is considering launching retail products sold via these centers which will have rapid delivery since we have many centers closer to densely populated neighborhoods.
There is a lot of speculation about what pandemic habits will stick. My guesses are take-out cocktails and heated outdoor dining spaces are here to stay, but what do you see as likely permanent changes to the restaurant business as a result of the pandemic?
Vijayaraj Gopinath: Over the last decade, we have enjoyed the comfort of on-demand services from various industries, such as Netflix for on-demand movies, YouTube for on-demand video entertainment, and Uber for on-demand rides. However, on-demand food services have been available for a long time but haven’t fully caught up. Thanks to DoorDash and UberEats, along with others who have built a robust delivery infrastructure, customers’ adaptation rate for on-demand food has exponentially increased due to the closure of indoor dining during the pandemic. Different age groups varying from senior citizens to millennials were forced to order via apps or restaurant websites during the peak pandemic. But similar to how people still enjoy movies in theaters and Netflix at home, we believe that in the post-pandemic world, the habit of on-demand food ordering is here to stay and will coexist with on-premise sales.
Any points you think we should address that I haven’t asked about?
Vijayaraj Gopinath: We would like to share a few success stories.
Walia Ethiopian opened its door in 2011 With a mission to provide quality and authentic Ethiopian food to San Jose. This family owned establishment has garnered a mass following and the highest rating on Yelp and Michelin Star rated for its consistent food and service. Famous founders such as Mark Zuckerberg and Larry Page have frequented the restaurant.
As with any other restaurant, the pandemic took a great toll on them and they no longer offered dining-in and instead focused solely on delivery. When their sales went down, they partnered with OneStopKitchen. We quickly identified that their food is amazing and the best Ethiopian food as you can find. OneStopKitchen helped them to expand their amazing Ethiopian foods all over the Bay area. Within a month of this partnership, we scaled Walia from one location to 10 locations starting from South Bay to San Francisco at zero cost for Walia.
OneStopKitchen received numerous calls from customers sharing their happiness that now they can eat Walia everyday. Walia boasts an incredible 4.8 stars on DoorDash and is a beloved restaurant. OneStopKitchen brought new life to the Walia brand. This Walia and OneStopKitchen partnership has created great momentum and led to many innovations since the Walia founders Ftsum and Ephrem Joseph are now building an automatic Injera machine just to keep up with the high demand. With this, they started working on building the Bay Area’s first injera bakery as well. Their current sales grew multi fold and OneStopKitchen alone contributed about $400,000 additional yearly sales. OneStopKitchen considers this its biggest success story and an incredibly proud moment.
Viggnesh Kandasamy: Here is a OneStopKitchen fulfillment center partner success story. We partnered with a small deli shop in Redwood City and converted them into an OneStopKitchen fulfillment center. After our partnership, we completely transformed their look and feel into a next-generation type of restaurant. Since the store is located in a prime downtown location with significant walk-in traffic, we installed outdoor facing TVs with digital content to attract customers into the store. The strategy was a success and converted lots of walk-in traffic into customers.
We also replaced their traditional menu board with digital TVs with a OneStopKitchen menu and Broadway sandwich menu. Additionally, we installed a kiosk which allows customers to mix-and-match and order from the OneStopKitchen menu. Inside the kitchen, we also installed new advanced cooking equipment which helped them to increase their cooking efficiency and overall process.
Vijayaraj Gopinath: The key take away is that OneStopKitchen is bringing a new revolution using the tested RIAS model to democratize retail business. Now anyone who has a great product idea can bring their product to thousands of OneStopKitchen locations in matter of weeks to reach millions of people (both digital and walk-in customers), and anyone who has additional underutilized space (be it a restaurant, food truck, garage, or even a room) can partner to become our next OneStopKitchen centers and earn additional income.