Ghost, or virtual, restaurants are all the rage as businesses turn to online ventures to help them close sales gaps created by COVID-19 restrictions
ROCKFORD — Last weekend, Mexican restaurant owner Joshua Binning made 25% of his sales from pizza while Scott Frank, owner of Ciao Bella Italian Kitchen, sold enough chicken wings to nearly double his payroll.
As bars and restaurants across Rockford and the nation struggle to bring patrons back through their doors in limited numbers because of the coronavirus pandemic, some business owners are turning to innovation to survive the beleaguered economics of the restaurant industry.
For longtime friends Binning and Frank, that has meant diving head first into the growing world of virtual restaurants.
Also known as “ghost” or “cloud” restaurants, virtual restaurants are just that — restaurants that exist only online, providing delivery or carryout meals with no in-person seating option.
They can be extensions of existing brick-and-mortar businesses or startups using rented kitchen space, and their popularity among consumers and entrepreneurs alike has made them a life preserver for businesses that have spent the past seven months fighting for their own survival.
“While the idea of virtual restaurants isn’t new to the industry, it’s really seen an uptick since COVID hit us back in the spring and as restaurants try to find new ways to supplement lost revenue,” Binning said. “Adding a new brand gives us another opportunity to connect with our guests without adding on significant business expenses like rent, insurance and utilities.”
For Binning, it was Ranchero Pizza, which launched from inside his Lucha Cantina kitchen on Oct. 6.
For Frank, it was Baked-Wings, which he opened in late September inside the Italian restaurant that he and his wife bought last summer.
“Had we have not come up with this idea, our future would have been really scary,” Frank said. “For the first part of the shutdown, it was just myself and my chef. Now, I have several people working.
“Everyone is fighting for their lives these days. … We’re trying to save our businesses for our families and for our staff.”
Industry sales plummet
According to the National Restaurant Association, the pandemic and its associated closures and operating restrictions cost the restaurant and bar industry nearly $150 billion in sales from March to August.
As sales took a nosedive, curbside carryout, delivery and drive-thru services expanded widely, with 67% of restaurants adding curbside pickup since the beginning of the pandemic, according to a restaurant association survey of 3,500 businesses.
The same late-summer survey showed 27% more restaurants using third-party delivery services and 17% adding their own delivery services.
The need to replace lost revenue combined with a greater emphasis on carryout as a way to sell food is what prompted Rockford businessmen Binning and Frank — and before them, downtown Rockford restaurateur Paul Sletten — to open ghost restaurants.
Sletten introduced Rockford pork lovers to Aww Shuck’s BBQ last spring, when many people were still spending much of their time at home as the state regularly tallied more than 100 COVID-19 deaths per day.
For those seeking an urban roadside barbecue experience, Sletten set out picnic tables in the alley between his two high-end restaurants — Abreo and the temporarily closed Social. The rest of the business was carryout, conducted primarily online.
“The concept was really born out of necessity,” Sletten said. “I had staff who needed hours. I had our hog farmer Joe at McKenna Farms who needed to sell pigs.
“It was less about making money and more about helping our staff. … Right now, everyone on my staff who wants to be working is working. We are about 15% smaller than before (the pandemic), but we have about 19 employees, and we have made work for all of them.”
Binning said he’s looking forward to the day when he can say the same.
He thinks he can get there with the Latin-inspired flavors of Ranchero Pizza.
Pizza accounted for 25% of his sales last weekend, he said, but more than that — it’s securing employment for his cooks and anyone else who wants to train in the kitchen or pitch in taking orders.
Binning said he started thinking seriously about Ranchero Pizza in May when the restaurant industry’s dine-in future grew more and more uncertain.
“I remember thinking back then, ‘Who knows where this is going to go?’” Binning said. “We need to get the ball rolling.”
Both Binning and Frank could see their ghost restaurants opened in traditional settings post-COVID-19.
“We would love it if Ranchero Pizza was a stand-alone someday or if there were a bunch of Ranchero Pizzas scattered across the region,” he said.
Frank said he’s enjoying his new clientele, although he still misses his Ciao Bella regulars, some of whom are reluctant to patronize his Loves Park dining room, especially as COVID-19 cases surge across the region.
With the financial support of Baked-Wings, Frank believes he can still be around to welcome them back when they are ready to return.
“There’s been an overwhelming amount of support,” Frank said about the wing business. “We’re reaching a different demographic. … We’re proud and excited.”
Rich and vibrant story
Some days, Sletten said, he feels like the restaurant version of an inflatable tube man — constantly waving his arms around, pitching new concepts and reinventing himself to stay afloat.
“We can’t just be a restaurant,” he said. “You can’t just sit back and open your doors and expect everything to be OK.”
For his next trick, Sletten said he plans to roll out a series of collaborations with area chefs, some involving his restaurants and some involving his food truck, Disco Chicken.
Coming up first, friend and fellow chef Patrick Alberto of Octane will join Sletten in the food truck on Halloween for Ka-Bao! — an afternoon of creative menu mash-ups featuring specialties from the two kitchens.
Sletten said he gives kudos to other restaurateurs who are doing everything they can to rebuild their businesses while maintaining safe, healthy dining environments.
“It’s a little like the wild, wild west out there,” Sletten said. “People like Josh and Scott are being creative. It’s not just about making a buck. It’s about keeping the excitement going and keeping your staff engaged.
“That’s what a lot of these ghost businesses are about.”
Rockford’s ghost restaurant rise is a testament to the ingenuity that exists among restaurant and bar owners, said John Groh, president and CEO of the Rockford Area Convention & Visitors Bureau.
“They’re utilizing their existing assets in a really strategic way,” Groh said. “Owners like Paul and Joshua and Scott are not only fighting for their survival, but they’re fighting for the future of our community.
“Restaurants tell a rich and vibrant story in any community. So much of our community’s image is tied to these places.”
Corina Curry: firstname.lastname@example.org; @corinacurry