Business

Kroger partners with Kitchen United to phantom kitchens in their boutiques

A return of a Kitchen United space in a Kroger supermarket

Source: Kroger

Kroger, the nation’s largest supermarket chain, and phantom kitchen start-up Kitchen United have teamed up to prepare ready-to-eat food and snacks at some of its grocery stores.

The collaboration on Wednesday announced Kitchen United’s goal of aggressively expanding with Kroger customers ’demand for fresher prepared meals.

Both companies have seen an increase in demand during the pandemic, but now they face challenges as consumers return to eating out in restaurants. Industry experts predict slowing delivery sales, which could lower the desire of restaurants to partner with Kitchen United, while Kroger and its brand portfolio could see consumers reduce food costs.

Phantom kitchens, called cloud, commissary or dark kitchens, allow restaurants to prepare food strictly for delivery, sometimes with more brands under one roof sharing a kitchen. The models are touted as more efficient and reducing labor and rental costs for restaurants. The pandemic delivery boom has stimulated investor and operator interest in phantom kitchens, but some experts have grown concerned about increased competition and oversaturation.

The first kitchen center under the partnership will open at a Ralphs location in Los Angeles this fall, with other sites planned for the rest of the year. Kroger’s extensive portfolio includes Harris Teeter and King Soopers.

The kitchens will feature a mix of up to six local, regional and national restaurants. Customers will be able to order their food for return or delivery.

“Our work together provides access to participating restaurants to millions of Kroger customers and the ability to better respond to off-premises demand in a convenient supermarket format – a frequent destination for most consumers,” he said. said Michael Montagano, CEO of Kitchen United.

Kitchen United has raised $ 50 million in funding since its founding in 2017 and counts Alphabet’s Google Ventures among its investors. So far, it has opened six locations across the country, with plans to open its first New York City kitchen in midtown Manhattan this fall.

Kitchen United’s footprint already includes an agreement with another retail company. Earlier this year, the Westfield Valley Fair shopping center in California said it will use Kitchen United’s technology to help facilitate departure orders. Other malls have also turned to phantom kitchens as a way to increase pedestrian traffic and increase restaurant sales. In 2020, mall operator Simon Property and Accor, the hotelier, have teamed up to launch C3, a virtual kitchen company.

Similarly, this is also not the first partnership Kroger has with a phantom kitchen company. In 2020, it made an agreement with ClusterTruck, which has a different business model from Kitchen United, to open on-site kitchens in Kroger locations. Other investments in bringing fresh food to its customers include its 2018 acquisition of Home Chef and an agreement to bring a handful of Saladworks restaurants into Midwestern stores.

Kroger shares have risen 34% this year, giving the company a market value of $ 31.8 billion.


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