Kroger partners for ‘ghost kitchen’ meal delivery

Stewart Samuel
Program Director - Canada

Date : 02 December 2019

Kroger is partnering with ClusterTruck to offer a meal delivery service, Kroger Delivery Kitchen.

Tech-driven solution to meal delivery

ClusterTruck is a software platform that powers profitable, vertically integrated delivery-only kitchens. Founded in 2015, the company operates kitchens in Indianapolis, Columbus, Denver, and Kansas City. The kitchens offer multiple cuisines, with products cooked to order and delivered by its own team of couriers. This ensures that nearly every order is in the hands of the customer within seven minutes of the meal's preparation. The average time between placing an order and a customer receiving their food is less than 30 minutes.

Source: ClusterTruck

Joint kitchen development

The two companies will initially roll-out the service,, in Carmel, Indiana, where they are jointly opening a kitchen. The service will also be offered in Indianapolis, and Columbus. In Denver, it will operate under the King Soopers Delivery Kitchen brand. Using the ClusterTruck platform enables Kroger to offer a wide range of cuisines, beyond what it offers in-store.

Source: ClusterTruck

Kroger’s food-to-go capabilities

The development of this service builds on Kroger’s foodservice capabilities. Its recently opened flagship store in Cincinnati showcases the breadth of its offer, with a second-floor food hall offering a range of its in-house developed brands and third-party foodservice operators. It has also recently opened its third standalone restaurant, Kitchen 1883. The retailer has also been piloting an order ahead app for its prepared foods offer in selected stores. Several retailers are expanding their operations into the foodservice channel given the strong growth out-of-home eating continues to experience.

’Ghost kitchens’

‘Ghost kitchens’ have grown in popularity, enabling existing restaurant operators and new companies to operate without the costs associated with physical sit-down locations. They can also be opened in industrial units, where the leasing costs are lower compared to street-facing outlets. In part, this has been enabled by the emergence of on-demand delivery platforms such as Uber Eats, Postmates and DoorDash. UberEats has also been able to optimise its data capabilities to suggest new concepts to existing restaurant operators, helping them to tap into unmet demand within specific catchments. Ghost kitchens also enable companies to more easily experiment with different cuisines and move quickly to close or scale-up as appropriate. In a new development which creates a different business model, last month, DoorDash, an on-demand delivery service, opened a ghost kitchen in California which allows five restaurants to share the space for their delivery businesses.

Different approach to meal delivery

Korger's approach contrasts with that of several grocery retailers which have partnered with third-party on-demand delivery platforms. Working with these types of companies, retailers have aimed to optimise their existing kitchen operations through driving additional volume within their stores. Although customers appreciate the convenience of ordering different cuisines within a single delivery order, the ClusterTruck operated service will be competing with well-established platforms that have quickly developed a high level of brand recognition. However, another key point of difference for the service is that delivery will be offered for free.

Source: ClusterTruck

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