10 votes

Why is Kellogg’s Diner selling food under eighteen different restaurant names on delivery apps?

7 comments

  1. [7]
    drannex
    Link
    Illusion of choice.

    Illusion of choice.

    1 vote
    1. [6]
      cfabbro
      (edited )
      Link Parent
      Not really. Read the article. IMO, it's actually pretty interesting and not nearly as nefarious or underhanded as I was expecting. Other companies create and manage these virtual brands, set their...

      Not really. Read the article. IMO, it's actually pretty interesting and not nearly as nefarious or underhanded as I was expecting. Other companies create and manage these virtual brands, set their menus, and then contract with various local restaurants, bars, and diners, who usually don't have an online presence of their own, to execute the recipes and package the orders.

      2 votes
      1. [5]
        drannex
        Link Parent
        It's definitely as nefarious as it sounds, there are also the likes of ghost kitchens that operate in the same way, and are often related to the ones from the larger brands.

        It's definitely as nefarious as it sounds, there are also the likes of ghost kitchens that operate in the same way, and are often related to the ones from the larger brands.

        1 vote
        1. [4]
          cfabbro
          (edited )
          Link Parent
          IMO, at least in this case, they're not. Read the article. They talk about all that, including ghost kitchens and how these virtual brands are different from them. How they're beneficial for the...

          IMO, at least in this case, they're not. Read the article. They talk about all that, including ghost kitchens and how these virtual brands are different from them.

          At first glance, the businesses tied to Kellogg’s might resemble ghost kitchens, but they’re actually part of a newer class of online restaurants called “virtual brands,” according to Scott Landers, co-founder of delivery consultancy Figure 8, whose clients have included restaurant chains like &Pizza and Mexicue.

          While ghost kitchens operate out of separate commercial spaces that don’t have a physical dining room, virtual brands operate out of brick-and-mortar restaurants that already exist. Companies come up with the brands — which usually consist of just a logo, a name, and a short menu — then license them out to restaurants and bars, who execute the recipes and package them for takeout and delivery.

          How they're beneficial for the restaurants involved:

          For a restaurant like Kellogg’s, which serves hundreds of items across a menu with more words than some privacy agreements, signing on was a no-brainer. “We were looking for ways to pick up our delivery business,” says Irene Siderakis, owner of Kellogg’s. So far it’s working.

          Siderakis partnered with Profit Cookers in February, running 18 of the company’s virtual brands out of the 24-hour diner. Since signing on, she’s already posted around $40,000 in additional sales, according to Mauriello, in part because the brands operate with expanded hours and delivery radiuses. Kellogg’s stops taking orders on its personal delivery apps after midnight, as the restaurant uses its own delivery drivers.

          Its virtual brands accept orders around the clock, and she credits the new business as one reason the restaurant has been able to stay open 24 hours, while so many other late-night businesses have had to scale back their hours during the pandemic. “It’s bringing in revenue that we need to survive right now,” she says.

          And also some of their potential problems too:

          The brands are putting money into the pockets of restaurant owners at a time that’s sorely needed, Siderakis says, but they come at the cost of some transparency for consumers, who may think they are placing an order from a physical establishment. Across Uber Eats, Grubhub, and Doordash, only the latter app notifies customers when they are ordering from a virtual restaurant. A disclaimer can be found at the top of the ordering page — “This is a virtual brand” — although it’s located on slide three of a four-slide carousel with promo codes for discounted delivery. There’s no additional context about how the virtual brands operate.

          “There are real concerns with traceability and accountability,” Landers says. “Who owns that order? Is it the restaurant that made it? Is it the [company] that created the brand? Is it Grubhub who delivered the order?”

          2 votes
          1. [3]
            drannex
            Link Parent
            I have. I also know that this an act of giving the illusion of choice and flooding delivery apps with multiple options to coax customers into choosing an option they normally either steer clear...

            I have. I also know that this an act of giving the illusion of choice and flooding delivery apps with multiple options to coax customers into choosing an option they normally either steer clear from, or wouldn't want to be served by for any reason.

            Those brands appear on multiple delivery apps and have their own logos, but outside of the branding there is nothing to distinguish them from Red Robin. They offer virtually the same menus and have the same addresses as any other Red Robin.

            But at first glance, a customer would be unlikely to recognize that the brands are just offshoots of the national chain.

            ... But she said she is also wary of how quickly the ghost kitchen model is growing and evolving and how little consumers often now know about the meals they are ordering online. She said large corporations are taking advantage of the app ecosystem to flood the market with their various brand concepts.

            “It disgusts me,” Lam said. “They are trying to saturate the algorithms so that way when you’re looking at these sites, you’re seeing five of the same product from one location in the same pool as one restaurant with one page.”

            Red Robin’s ‘ghost kitchen,’ masquerading as separate restaurants, highlights fears over dine-in’s future

            Not only does it saturate the listing, it also allows restaurants to spin off a "new" restaurant and ignore any bad press or reviews while offering the exact same materials without any clear indication of who it comes from.

            5 votes
            1. [2]
              cfabbro
              Link Parent
              Fair enough, that does paint a less flattering picture of the business model. But I still think that they're not wholly bad or all necessarily nefarious either. Many restaurants simply don't have...

              Fair enough, that does paint a less flattering picture of the business model. But I still think that they're not wholly bad or all necessarily nefarious either. Many restaurants simply don't have the tech savviness required to market themselves effectively online, nor are they able to tailor their menus and pricing for that market, so I can see how the owners of such restaurants would benefit from working with these virtual brands. But I definitely think more criticism should be directed at the app developers for not making things clearer to consumers.

              3 votes
              1. Greg
                Link Parent
                That’s pretty much my view. They irritate the hell out of me because they use food-styled images of the best possible iteration of what you’re ordering (see perfectly charred, wood fired pizza -...

                That’s pretty much my view. They irritate the hell out of me because they use food-styled images of the best possible iteration of what you’re ordering (see perfectly charred, wood fired pizza - get a generic premade base that’s been through a conveyor oven) but in the scheme of my life it’s no more than a moderate inconvenience if I happen to miss one. For now, as someone who cares, I find it fairly easy to spot the way they brand things and avoid them - but I’d prefer an explicit flag.

                Conversely, I have zero problems with dark kitchens as a concept. Restaurants get lower overheads, I get equal quality food but faster and more accessible. Absolute win-win.

                2 votes