How Virtual Restaurant Brands Use Market Data Analytics to Operationalize Independent Kitchens

With no physical location or pick-up spot, a virtual restaurant brand is a food concept designed to prioritize convenience and quality. During the pandemic, virtual brands gave struggling restaurants the opportunity to sell additional simple menu items, allowing them to quickly and cheaply increase sales and maximize profits. In stressful times, customers turned to comfort foods like burgers, wings, and pizza being delivered to their homes – and this is exactly what virtual brands provided.

It’s 2022 and customers have returned to in-person dining – what’s the deal with virtual brands now?

Despite the comeback of in-person dining, virtual brands are continuing to expand and develop. Although we may not be seeing the same rapid proliferation we saw mid-pandemic, it appears that virtual brands are becoming more mature and targeted.

Restaurants, especially independents, are still not out of the thick of it – the industry is currently suffering from supply chain issues, inflation, and labor shortages – and virtual brands are a solution to many of these uncontrollable external factors. In the current state of the industry, and with all of the benefits they offer, virtual brands are certainly more than a passing trend.

Although chain establishments may have better-known virtual brands, independents are also choosing to operate virtual brands. In fact, 41 percent of independent restaurants now offer a virtual brand, according to a report from Grubhub and Technomic. For virtual brands looking to operationalize independent kitchens, restaurant data and analytics (like what we offer at Brizo…) can be used to find the perfect fit.

Benefits of virtual brands for independents

Virtual brands are far less expensive and risky than the traditional restaurant model and offer a way to test the waters with a new restaurant concept. In this current economic landscape, virtual brands are a logical and safer business decision for independent establishments looking to expand or experiment. Independents do not have the financial security that chains do, and therefore, expansion and experimentation are typically risky and tedious processes for them.

Here are just a few of the many benefits of operating a virtual restaurant brand:

• Makes use of space already being used by a restaurant, therefore taking full advantage of overhead costs and maximizing profits.
• Can be used to take advantage of off-hours, like lulls, early mornings, or late nights.
• A restaurant’s existing staff can be used, therefore eliminating the need to hire more individuals and spend extra time and money on training (also, finding and keeping staff right now is tricky due to labor shortages!).
• Can use existing ingredients a restaurant would already have; creating a brand new menu with new ingredients is a pain right now due to supply chain issues and inflation.
• Reach new customers with new concepts and menu items.
• 75 percent of independent restaurant operators already offer online ordering via a third-party marketplace – a restaurant can dominate in the delivery space by offering multiple brands.
• Limit waste (and save money) by using multiple brands to optimize your existing inventory
• Test out new ideas and dishes without changing the image/familiarity/brand of your existing restaurant

Why virtual brands need restaurant data

Virtual brands must understand the marketplace when looking to open new concepts. What are white spaces in certain geographical regions? What competition already exists for your concept? Is the area you are considering a good fit for your concept? With the rise of virtual brands in the past few years, doing due diligence and competitive market research is more important than ever.

Restaurant data can save a great amount of time and energy when conducting market research. Here are a few examples of questions you might consider when doing market research for your virtual brand (the answers are provided by Brizo’s data platform!):

Q: How many delivery-only concepts that serve chicken wings exist in the U.S. and Canada already?

A: 3,026

Q: How many Mediterranean restaurants offer plant-based menu items?

A: 6,640

Q: Where is the highest concentration of independent BBQ establishments in the U.S. and Canada?

A: Texas and California

If virtual brands are looking to operate out of existing kitchens and restaurants, research is needed to determine who would be a good partner. It would make the most sense to operate out of an establishment that offers a similar cuisine with ingredients found in your menu items. Additionally, it is crucial to consider factors like geographical regions, area demographics, and operating hours.

For example, if you have a virtual brand that serves exclusively tacos, it would make sense to partner with independent Mexican establishments. Or, a late-night food virtual brand would likely want to operate out of a restaurant that does not currently offer a late-night menu.

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