retail news in context, analysis with attitude

by Kevin Coupe

Bloomberg reports that TV chef Rachael Ray is opening her first restaurant - a virtual establishment that will operate in 13 cities through the end of the year, powered via a partnership with Uber Eats.

"There will be no brick and mortar Rachael Ray to Gos," the story says, but rather will be ":a network of independent, delivery-only kitchens (that) will prepare the meals. If you want her pulled buffalo chicken chili with ranch, you have to order it via Uber Eats."

Expect Ray to promote the enterprise on her daytime TV show at the same time as she promotes a new cookbook that is coming out. It is a way for her to enter the restaurant business in a relatively unconventional way after a career built on cookbooks and TV shows.

"The Rachael Ray to Go menu will include around 11 options, many of which are in her cookbook, including the pulled buffalo chicken chili with blue cheese ranch, one of Ray’s most downloaded recipes. Also on the menu: a dozen spiced fried chicken drummettes, jalapeño popper grits and tagliatelle with Bolognese." the menu will be available via mobile app to customers in New York, Los Angeles, Baltimore, Austin, Dallas, Houston, Minneapolis, Portland, Seattle, Miami, Fort Lauderdale, Chattanooga and Toronto.

And, Bloomberg writes, "Rachael Ray to Go also marks an unconventional path for Uber Eats in the increasingly crowded, and profitable, online food delivery market: Tapping notable food professionals who don’t have restaurant spaces to create dishes for delivery, from restaurateurs to authors, like say, Chrissie Teigen.

"Online food delivery is projected to be worth $161.7 billion globally by 2023. Uber Eats generated $3.39 billion in gross bookings in the second quarter of 2019, up 91% from the second quarter of 2018. The company’s first virtual restaurants opened in Chicago in early 2017; they now have more than 5,500 globally and over 2,100 in the U.S. and Canada. But they’re not the biggest players: in August 2019, Door Dash represented 36 percent of meal deliveries in the U.S.; Uber Eats stood at 15 percent."

What strikes me as the Eye-Opener here is how it illustrates how easily - and "easily," I grant you, is a relative term - new competitors can get into the food space. Companies don't have to invest in the traditional infrastructures in order to launch a business. In this case, Uber is providing the delivery mechanism and Ray is providing the recipes and the brand - she's not actually going to be in these kitchens making the food.

The competitive landscape has the potential to be changed significantly by concepts like ghost kitchens or dark stores, which can bring new energy to their spaces and new danger to traditional businesses. Attention must be paid.
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