Cloud Kitchen Platform with Ashley Colpaart

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Ashley Cole Part. Welcome to software and Jiang daily. Thanks for having me. There are a variety of ways that I can order food on my phone these days. I've got UBEREATS and Jordache Post mates and these. Apps first came out six or seven years ago and I was just ordering food from normal restaurants. A courier was picking up the food from the restaurant but today the market has matured. And it's gotten more sophisticated. How has the world changed due to the fact that there is so much volume going through food delivery APPS? I don't I don't know if I even have the answer to that. It's like there's more on demand couriers and workers that are able to kind of make their own hours set their own hours and work when they feel like it. And there's more people that are able to you know get a pizza or a sandwich or Sushi. Brought to them at any place in their community without having to leave their office or the park or wherever they are so. It's more like it's a convenience economy and people are able to just get get what they need when they wanted. And that's the biggest change I think. That's that's the society's feeling. Could you explain the term cloud kitchen? Sure so like you mentioned in the in the question. Is You know people. Typically restaurants would produce food for delivery and it would be kind of coming directly out of their restaurant kitchen but with a rise in delivery and the rise with demand in delivery restaurants are feeling strapped and constrained by that rise because most restaurants are not designed for delivery designed for in restaurant dining. It's just a different model. So the idea of a cloud kitchen is to really centralize the production of food producers. So that it's easier for delivery drivers to pick these things up and deliver them direct to consumer so a lot of the Times. The larger companies are playing with data. They're seeing a large demand through these delivery. Apps for specific types of food in their able to cater to that demand by creating what they call virtual restaurant concepts that may exist only in the cloud. They may just be a brand that exists only in the cloud that delivers food and or they could be a restaurant that needed to expand into delivery and so decided to rent a kitchen space. Off-site off premise. From their restaurant they keep the same brand. They optimize their menu for delivery. But they're doing that. Production in a large facility. Can you kind of think of a warehouse that has multiple kitchen units in it and you can imagine multiple brands making multiple types of food under one roof? These kinds of giant industrial warehouse. Kitchens where today there could be multiple virtual restaurants existing in them. Did these kinds of warehouse sized kitchens exist before there were food delivery apps and the desire for these cloud kitchens. Yeah I think that the original version of this concept was the mall food court where you could bring a family of five to the mall. Food Court in your daughter wants a hot dog and you want chicken tenders or Mexican food or or whatever and you're able to kind of get all of those slices from one food court. It's a little similar to that except for that the pickup option tends to not be existent in these in these facilities. So I would say that was like the first version of that and it's also funny you know having a new term coined by the industry so the cloud kitchen or the ghost kitchen or or virtual restaurant like technical branded terms for something that's existed a long time which is the idea of commissary kitchen which is just a centralized location for mass food production when those of existed since we started having the necessity for licensed commercial spaces that are you know licensed by the health department. Can you tell me about the business model of these warehouse? Kitchens Shire so there's there's a couple of different models that are trying to gain some market traction right now one would be the the warehouse model where there's again multiple brands under one roof. But they're renting out these spaces to an existing brand and the brand rents the space and access to the distribution channels and technology. Just so they have a turnkey situation for which sell this food as an extension of their existing brand another model that is emerging is the facility itself is in Unbrella Company for their own brands. So you might have kind of a a wing shop in a burrito place at a Sushi restaurant but they're all owned by the same kind of restaurant group or LLC that oversees the facility and they are optimizing their menus and optimizing their production and menus based on the concept that they have under that roof some of the food that I might order on from a food delivery APP. Some of it might come from a virtual restaurant that runs entirely out of these warehouse. Kitchens when did we start to see virtual restaurants start to appear on? These APPS. Like Uber Eats. When did it start to to be the case that I am not necessarily ordering from a restaurant? This is somewhat of a new phenomenon. This is kind of more in the last three to five years. I think New York City was the first place that it saw the rise in in the ability to do this and to optimize for it and since then you know as the VC money starts flowing in in the concept starts to gain traction within the business world you start seeing them popping up kind of all over the place the problem is or concern is to the consumer. It's difficult to tell where your food is coming from. In this is kind of at odds with the consumer demand of wanting at the same time to have more knowledge about where their food comes from so that disentanglement and not knowing is coming from an existing restaurant is coming from a commissary kitchen. Is this coming from a cloud kitchen or frankly is this coming from. Somebody's home kitchen where they're just producing it home. And then hopping on one of these delivery APPs. It's Kinda hard to tell. We don't really know that there's a lot of looseness happening with it. So let's say I want to set up my own virtual restaurant today. So let's say I have an idea for a restaurant that serves exclusively toast. It serves Geez. Toast cinnamon sugar toast French toast. I WANNA get started immediately. I want to start as fast as I can today to start selling my toast. What's required to set up a virtual restaurant for me? So the first thing you'll need is a business license or an LLC to kind of operate legally you then as a producer. If you're going to be the one that's going to be preparing the food you'll need to get food handler card and be legally. Have the adequate food service training that your health department requires you then need access to a licensed commercial kitchen space and so an existing kitchen that is licensed to produce food. You could oftentimes folks would like Kitchen space from an existing restaurant that had time when it wasn't operating or you can use what's called shared use kitchens where the business models to rent out space so commissary kitchens shared use kitchen's kind of the same thing but they're allowed to rent hourly through monthly plans and then you can access that space you'll then want kind of optimize your menu and figure out where you're going to buy your food from have that food delivered to the kitchen on hand so that when you are ready to operate it there and then you you know hop on one of these sites and you create an account with the delivery APP so that you can post your menus and poster hours and then sit around and wait for folks to find you if you haven't you know. Put in a lot of the legwork to have built your brand up so that folks know who you are what you are so the value that these aggregate irs bring to a new brand that might be trying to gain. Traction is visibility to a broad base of consumers that are hungry. So when you know you're searching for something to eat and I see you know you're toast company and I'm hungry and I was craving toast. I can search for toasted and find you. And what kind of deal does my virtual restaurant make with the warehouse kitchen so oftentimes are going to be like long term leases where they're leasing space for their production so there's usually a monthly lease bannon. There's oftentimes a lease or some sort of contract around the data and the access to the platforms as well. And what about with the food delivery APPS? What kind of relationship do I have is a virtual restaurant with food delivery APP companies? I don't know if I know the answer to that. I think they're all changing. They're all trying to optimize that relationship. And so I think you're using a third party application to mar essentially market your your brand through their APP. And then there's a percent of anything that kind of flows through that that you're paying to APP for them connecting you with the consumer demand. You run a company and you make software called the food corridor. This software for shared kitchen management. Explain what your software does sure so we are essentially a an ERP for the shared kitchen industry. So as I mentioned earlier the idea of a shared kitchen is not a new phenomenon. These types of kitchens have been operating for for decades based on the idea that in order to sell food to consumers you need to produce it in a license commercial facility. Oftentimes these can cost over fifty thousand dollars to build on your own or outfit and if you are just getting started as a food business or or or seasonal food business. It doesn't really make sense for you to to pay for that type of capital infrastructure. Meant so the idea shared spaces much like the co working spaces that you share the cold storage. You share the Freezer Space. You share the docking. You should the dry storage and you're renting the facility in booking time in that kitchen when it's available in new operate during those times so what? Our software does is kind of manages the back end relationship between the owner of the kitchen and the food businesses that rent from them so we essentially allow for scheduling and booking we do compliance document management for managing the business license the insurance in the food handler card of all the renters. We also manage the billing and allow for monthly plans and added fees in storage so that they can manage that relationship. Kinda get out of the office in back into the kitchen to support those food business. In in the businesses that are operating out of the facility. So the customer is the warehouse kitchen itself. Yeah the customer is the shared kitchen themselves. Yeah the owner operator up. The

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