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How no-store businesses are reshaping the hospitality experience

How no-store businesses are reshaping the hospitality experience

Ghost kitchens entered the national conversation long before the COVID-19 pandemic. Over the past decade, thanks to a newly established food delivery infrastructure, pizza delivery and frozen meal brands have been able to launch and thrive without expensive retail spaces. Companies like Cloud Kitchens and REEF were founded to help businesses get off the ground quickly and painlessly. 

When the pandemic shut down restaurant dining rooms in 2020, many operators pivoted their spaces and menus to delivery-only concepts for the first time. Some have stuck with it even since in-restaurant dining came back. Now, the coexistence between virtual and brick-and-mortar restaurants raises questions about the future of the industry: What do people want from the hospitality experience? And when it takes so much for restaurants to deliver on those desires — real estate and labor costs, for example — is community ultimately what we sacrifice?

News reports have sworn that ghost kitchens are both the wave of the future and decidedly not the future of restaurants. What’s perhaps closer to the truth is that there’s a place for both virtual and brick-and-mortar businesses — and by drawing attention to the many hurdles that food and beverage business owners face, virtual kitchens are forcing us to reimagine what hospitality spaces might look like.

From home cooking to community kitchen 

Doreet Jehassi opened The Ma’lawah Bar in 2019 out of her Palo Alto home, sharing the Yemenite-Israeli foods of her childhood (think flaky flatbreads with tomato and coconut-dusted semolina cakes). Her menu filled a niche for observant Jews in the area who struggled to find kosher options, and she prepared and delivered all of the food herself. 

Doreet Jehassi opened The Ma’lawah Bar in 2019 out of her Palo Alto home

Recently, however, an opportunity came up to join three other chefs in Palo Alto’s kosher-certified Jewish Community Center kitchen. Although she had planned to focus on delivery, Jehassi signed on and created a counter-service model where customers could buy meals to go or eat on-site. 

“It’s a little different [here], where customers are not familiar with my food,” she says. “Those who understand it order online, no explaining needed. Now, there’s a conversation happening.” 

That requires Jehassi to change the language she uses — to talk up the convenience and deliciousness of fried flatbread to a distracted teenager who stops by having never heard of Yemeni food, for example. She still offers delivery (now through DoorDash and GrubHub), but she sees her current location as a stepping stone to something bigger. That might mean growing the cafe with more staff, partnering with co-packers and distributors, moving to a commissary model, or selling frozen items in supermarkets. For Jehassi, the decision isn’t between a delivery-only business or a restaurant — it’s much more nuanced.

“All I want is to scale and grow,” she says. “I’m going to absorb what I can and make the best educated decision.”

Baking, biking, and building a sustainable business

Scaling and growing in a sustainable way — one that doesn’t result in excess waste — requires even more creativity. Chris MacLeod and Tiff Singh currently rent space from another bakery for Laune Bread, their primarily subscription-based bakery in Minneapolis. After the other bakery closes for the afternoon, the Laune duo takes over, meaning lots of time spent setting up and taking down each day they bake. 

Tiff Singh and Chris MacLeod created a subscription-based bakery in Minneapolis as part of their commitment to reducing food waste.

Like Jehassi, MacLeod and Singh have found ways to connect with customers without a physical location. They distribute bread via pick-up sites throughout the city and delivery, and with home delivery, MacLeod says, “kids will wait for us to drop off the bread in excitement.” 

They print zines to distribute with the bread and send out emails with educational information about the processes, ingredients, and growers. Transparency and honesty lead to positive relationships with customers. 

The pandemic highlighted the importance of that connection. “During COVID, we received a lot of feedback from our customers about the importance of bread in their lives,” says MacLeod. “Stuck at home, often without a general routine, ‘Bread Day’ (Thursday) became either something to look forward to or a reminder of what day of the week it was.” When the pandemic closed their pick-up locations, they transitioned fully to home delivery. “It was incredibly tedious and tiresome for us, but it meant that we could continue to provide all of our customers with hearty sustenance.”

To set a less restrictive schedule, increase capacity, and expand their bread and pastry offerings, Laune will open a bakery with a storefront location this fall — but a brick-and-mortar was never part of their original plan. In fact, they initially chose a subscription model over retail after working in restaurants and seeing the massive amounts of food waste produced. “Day after day, it is depressing and aggravating to witness dumpsters full of bread and food,” says MacLeod. “A subscription-based model allows us to know exactly how much product to bake every week. When we open our storefront, we intend to underproduce, or intentionally sell out, to further our commitment to reduce food waste.”

To expand their bread and pastry offerings, Laune will open a bakery with a storefront location this fall — but a brick-and-mortar was never part of their original plan.

Reimagining the future of retail

Like MacLeod and Singh, Michael Holland started small, making bread to sell at his friend’s farmstand at Germantown Kitchen Garden in Philadelphia. People kept buying it, and he kept making it, and Michael’s Bread was born. Eventually, Holland built a brick oven on the farm, and he started local delivery and subscriptions so he could keep selling in the fall and winter, when the farmstand is closed. 

“Technically I’m based at the farm, but it’s not a retail spot,” he says. “I don’t have enough capital to have a place. This is the new economy — I’m advertising on social media. It’s interesting to see how much the market for infrastructure has not kept up with this thing I’m doing.” 

Holland loves his customers, he says, but he compares a day of bread-making to running a marathon — there’s no energy for a sales interaction. Still, he does enjoy chatting with people as they stop by and hang out at the oven while he’s baking. An appreciation for slow, sincere, non-transactional community has made Holland consider how to evolve traditional models of a retail space. 

“I’ve been working on a fantasy production bakery place, mostly a production space for distribution,” he says. “You could go if you’re a customer, but not a retail bakery — more like a nice place for craftspeople. I don’t want to work in a big, loud, industrial bakery where I have to be the face of the business. I’m more interested in a philosopher’s bakery.” 

Mostly, Holland says, he’s fed up with the legacy barriers to entry in the food and beverage industry, where it’s hard to start a business and be profitable. Millennials like him are willing to experiment, cutting out expenses they don’t need, and solving old problems in new and creative ways. 

“It’s a fun adventure, but it’s nerve-racking,” he says. “It’s exciting to imagine how those models will mature.”

Michael's Bread started at his friend's farmstand in Philadelphia.


How no-store businesses are reshaping the hospitality experience

How no-store businesses are reshaping the hospitality experience
by
Soma Amir
by
Doron Segal
by
Tomer Molovinsky
by
Olivia Terenzio
by
Jessica Buckley
by
Ashley Rodriguez
March 25, 2020

Ghost kitchens entered the national conversation long before the COVID-19 pandemic. Over the past decade, thanks to a newly established food delivery infrastructure, pizza delivery and frozen meal brands have been able to launch and thrive without expensive retail spaces. Companies like Cloud Kitchens and REEF were founded to help businesses get off the ground quickly and painlessly. 

When the pandemic shut down restaurant dining rooms in 2020, many operators pivoted their spaces and menus to delivery-only concepts for the first time. Some have stuck with it even since in-restaurant dining came back. Now, the coexistence between virtual and brick-and-mortar restaurants raises questions about the future of the industry: What do people want from the hospitality experience? And when it takes so much for restaurants to deliver on those desires — real estate and labor costs, for example — is community ultimately what we sacrifice?

News reports have sworn that ghost kitchens are both the wave of the future and decidedly not the future of restaurants. What’s perhaps closer to the truth is that there’s a place for both virtual and brick-and-mortar businesses — and by drawing attention to the many hurdles that food and beverage business owners face, virtual kitchens are forcing us to reimagine what hospitality spaces might look like.

From home cooking to community kitchen 

Doreet Jehassi opened The Ma’lawah Bar in 2019 out of her Palo Alto home, sharing the Yemenite-Israeli foods of her childhood (think flaky flatbreads with tomato and coconut-dusted semolina cakes). Her menu filled a niche for observant Jews in the area who struggled to find kosher options, and she prepared and delivered all of the food herself. 

Doreet Jehassi opened The Ma’lawah Bar in 2019 out of her Palo Alto home

Recently, however, an opportunity came up to join three other chefs in Palo Alto’s kosher-certified Jewish Community Center kitchen. Although she had planned to focus on delivery, Jehassi signed on and created a counter-service model where customers could buy meals to go or eat on-site. 

“It’s a little different [here], where customers are not familiar with my food,” she says. “Those who understand it order online, no explaining needed. Now, there’s a conversation happening.” 

That requires Jehassi to change the language she uses — to talk up the convenience and deliciousness of fried flatbread to a distracted teenager who stops by having never heard of Yemeni food, for example. She still offers delivery (now through DoorDash and GrubHub), but she sees her current location as a stepping stone to something bigger. That might mean growing the cafe with more staff, partnering with co-packers and distributors, moving to a commissary model, or selling frozen items in supermarkets. For Jehassi, the decision isn’t between a delivery-only business or a restaurant — it’s much more nuanced.

“All I want is to scale and grow,” she says. “I’m going to absorb what I can and make the best educated decision.”

Baking, biking, and building a sustainable business

Scaling and growing in a sustainable way — one that doesn’t result in excess waste — requires even more creativity. Chris MacLeod and Tiff Singh currently rent space from another bakery for Laune Bread, their primarily subscription-based bakery in Minneapolis. After the other bakery closes for the afternoon, the Laune duo takes over, meaning lots of time spent setting up and taking down each day they bake. 

Tiff Singh and Chris MacLeod created a subscription-based bakery in Minneapolis as part of their commitment to reducing food waste.

Like Jehassi, MacLeod and Singh have found ways to connect with customers without a physical location. They distribute bread via pick-up sites throughout the city and delivery, and with home delivery, MacLeod says, “kids will wait for us to drop off the bread in excitement.” 

They print zines to distribute with the bread and send out emails with educational information about the processes, ingredients, and growers. Transparency and honesty lead to positive relationships with customers. 

The pandemic highlighted the importance of that connection. “During COVID, we received a lot of feedback from our customers about the importance of bread in their lives,” says MacLeod. “Stuck at home, often without a general routine, ‘Bread Day’ (Thursday) became either something to look forward to or a reminder of what day of the week it was.” When the pandemic closed their pick-up locations, they transitioned fully to home delivery. “It was incredibly tedious and tiresome for us, but it meant that we could continue to provide all of our customers with hearty sustenance.”

To set a less restrictive schedule, increase capacity, and expand their bread and pastry offerings, Laune will open a bakery with a storefront location this fall — but a brick-and-mortar was never part of their original plan. In fact, they initially chose a subscription model over retail after working in restaurants and seeing the massive amounts of food waste produced. “Day after day, it is depressing and aggravating to witness dumpsters full of bread and food,” says MacLeod. “A subscription-based model allows us to know exactly how much product to bake every week. When we open our storefront, we intend to underproduce, or intentionally sell out, to further our commitment to reduce food waste.”

To expand their bread and pastry offerings, Laune will open a bakery with a storefront location this fall — but a brick-and-mortar was never part of their original plan.

Reimagining the future of retail

Like MacLeod and Singh, Michael Holland started small, making bread to sell at his friend’s farmstand at Germantown Kitchen Garden in Philadelphia. People kept buying it, and he kept making it, and Michael’s Bread was born. Eventually, Holland built a brick oven on the farm, and he started local delivery and subscriptions so he could keep selling in the fall and winter, when the farmstand is closed. 

“Technically I’m based at the farm, but it’s not a retail spot,” he says. “I don’t have enough capital to have a place. This is the new economy — I’m advertising on social media. It’s interesting to see how much the market for infrastructure has not kept up with this thing I’m doing.” 

Holland loves his customers, he says, but he compares a day of bread-making to running a marathon — there’s no energy for a sales interaction. Still, he does enjoy chatting with people as they stop by and hang out at the oven while he’s baking. An appreciation for slow, sincere, non-transactional community has made Holland consider how to evolve traditional models of a retail space. 

“I’ve been working on a fantasy production bakery place, mostly a production space for distribution,” he says. “You could go if you’re a customer, but not a retail bakery — more like a nice place for craftspeople. I don’t want to work in a big, loud, industrial bakery where I have to be the face of the business. I’m more interested in a philosopher’s bakery.” 

Mostly, Holland says, he’s fed up with the legacy barriers to entry in the food and beverage industry, where it’s hard to start a business and be profitable. Millennials like him are willing to experiment, cutting out expenses they don’t need, and solving old problems in new and creative ways. 

“It’s a fun adventure, but it’s nerve-racking,” he says. “It’s exciting to imagine how those models will mature.”

Michael's Bread started at his friend's farmstand in Philadelphia.


Soma Amir

About the author

Doron Segal

About the author

Hey I'm Doron, the co-founder & CTO of Per Diem — a mobile app platform for restaurants. I'm also a dad and a husband. I love to travel and meet new people.I love creating things, and see people using the stuff I built.Prior to Per Diem I worked at Saildrone, OpenTable, Apple, Beats Music, Siemens.

Tomer Molovinsky

About the author

A second time founder with a passion for building products at the intersection of hospitality and technology. I've had the pleasure of launching reservation systems, mobile payment solutions, and loyalty programs at OpenTable and Resy, and witnessed how operators were losing a direct connection with their customers online. We built Per Diem to strengthen the relationships that businesses have with those customers, and to ensure that local businesses can thrive in today's economy.

Olivia Terenzio

About the author

Jessica Buckley

About the author

Ashley Rodriguez

About the author

Ashley is a freelance writer and podcast producer based in Madison, Wisconsin. She hosts a podcast called Boss Barista and writes an accompanying newsletter with full transcripts of each episode and articles about coffee and restaurant work. You can check out her work here (ashleyrodriguez.work/).

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