There’s no denying we’re continuing a new era of food delivery, but how can we do it smarter and in a way that preserves both the brand and the hospitality diners crave? Kristen Barnett, founder and chief executive of Hungry House, Brooklyn, NY, is forging a new model for ghost kitchens, working with chefs to launch their signature menu items on the Hungry House platform, executed in the Hungry House kitchen.
Chefs earn a royalty on all sales of their menu items, while Hungry House takes care of real estate, procurement, labor, technology and operations. She shared her story and spoke about the future of food delivery at the Ideation Fresh Foodservice Forum, a post-show event of the New York Produce Show. Barnett, who is the former chief operating officer of Zuul, a food technology company recently acquired by Kitchen United, spoke with Susan Crowell, contributing editor at Pundit sister publication, PRODUCE BUSINESS magazine, to describe her cutting edge work in what she calls a “second gen ghost kitchen model.”
Q. The rise of food delivery has upended much of the restaurant and food industry as business models have shifted. So what DOES the food delivery business model shift mean for operators and menus, and the foodservice industry in general?
A. A lot of people, as delivery just took off, rethought a lot of their operations and menus to better service customers through that channel, given the constraints or considerations you have — from food traveling well, to packaging, to price points, to menu design and then presentation, the logistics and the entire customer interaction as it relates to how it’s facilitated with technology. So, it was like a holistic revision of the business that many restaurants had to consider. And part of it, too, was the rise of the dark kitchen model, where you were suddenly able to still interact with customers or sell food, but purely through a digital relationship and then fulfilled from any space that could have a kitchen to cook in. Every single part of the business was rethought and re-engineered to reach customers through this new channel.
Q. So where are we at in that process now?
A. Obviously, a lot of businesses are normalizing and probably handling pent-up demand from customers who are excited to dine in and visit an establishment. But, at the same time, it’s very clear the delivery business is not going away, and so it’s really understanding how that business looks alongside what might be a core pick-up/walk-in business, or whatever your bread and butter is.
Now, contained within this, I think, is also the realization that not everything as it pertains to ghost kitchens or food delivery is good. I think in the beginning, just any way of being able to sell food or reach customers was a good thing, with things so dire with a pandemic, but as things have played out, I think there’s a greater understanding that there are a lot of downsides to the model, especially when you’re reliant on third party platforms that inhibit your ability to actually reach customers and communicate to them, access to data, or do they drive any sense of hospitality? Not to mention the economics for many of these platforms that charge 30% commission on those orders.
I think now we’re entering in a phase of a reckoning — OK, this happened, and people use delivery now, and it’s widely accepted that it’s a way you can serve your customer. But how can we do it in a smarter way that preserves margins, brands and hospitality? And those are the hardest questions people are trying to answer as we shift into a new normal, and obviously questions that we’re trying to answer with Hungry House, as well.
Q. Hungry House literally just opened, and you’ve launched “Season 01” in your ghost kitchen location in the Brooklyn Navy Yard, featuring partnerships with chef-influencers and brands such as Woldy Kusina, The Food Sermon from Rawlston Williams, Apocalypse Burger from Martha Hoover and The Goods Mart. What has the initial response been both from chefs and from patrons?
A. It’s been incredible. We are constantly hitting sales targets in a week that I thought we’d hit in months later, and it’s just been amazing. From chefs, the reception has been like, “wow, tell me more.” I think our message is resonating with a really broad culinary audience, just given that we’re addressing, head-on, a lot of the drivers of skepticism in the ghost kitchen industry. I definitely have had plenty of conversations with chefs and people in the food industry, reporters or otherwise, that are just skeptical of ghost kitchens, like “does it really help,” and “who does it serve,” “how do the economics work,” “what about quality?”
Hungry House is seeking to flip the ghost kitchen narrative on its head, and help the next generation of chefs and culinary leaders really see that there is a way to leverage this model for good, and to make an impact, and scale your brand. Our strategy is to do that with intentionality, with a focus on supply chain and ultimately great execution — all further enhanced by a native platform, with control, end to end, over the guest experience and a sense of hospitality infused through all of it. Those are a lot of the things that actually matter to chefs. In many other ghost kitchen models, I think there are gaps in some of those key areas. We’re hoping that we can target partnerships that maybe otherwise wouldn’t think about those kitchens as something that would be a part of their business.
Q. You mentioned the supply chain. Let’s talk about what you’re doing to create partnerships throughout the supply chain.
A. One way to think about our approach to supply chain — and in many things that we do at Hungry House — is looking at the broader ghost kitchen industry and understanding what’s been happening there. Many of the virtual brands and kitchen initiatives that have launched recently, are the celebrity-backed brands that are launched across the U.S. in networks of independent restaurants that are looking to partner with an online brand to sell incremental menu items. Many of these brands that a restaurant can choose to partner with are often easy to execute, commoditize — so it might be chicken wings, or french fries, maybe some burgers, and there’s no problem with that.
But, from our point of view at Hungry House, it all felt the same. It really wasn’t moving the needle forward when it came to leveraging the ghost kitchen models, and push the edge of what’s possible in culinary. In our model, we are executing the food and because that is our No. 1 focus, we have a fully staffed culinary team in our restaurants that execute the menu that comes from our partnerships. And not only do we have control then over the quality versus this network of independent restaurants, but we also have control over the supply chain. So, because we don’t have to just think about what’s the easiest way to execute something, we can really take a dish and and think, OK, what’s the best supplier for this burger? I’m still hitting certain cost targets, but what’s going to be right for this brand? We have partnered with this amazing burger concept, the Apocalypse Burger, and we sourced the meat from Happy Valley Meat Company, because it’s a really important part of the Apocalypse Burger brand to have that high quality beef. That’s just one example where, because we have that edge over the value chain, you can make decisions that actually enhance each of these brand partnerships and meet their own goals when it comes to quality.
I don’t know that a typical chef looking at a ghost kitchen partnership would be able to maybe lean into supply chain, but my background is in supply chain and I love it, and I think it’s a really critical part of executing any meal.
Q. What else makes Hungry House unique?
A. There are a lot of ghost kitchens out there, a lot of people cooking other people’s brands or menus — we’re not necessarily unique in that regard. But we are very specifically focusing on what has been relatively untouched thus far, and that is unlocking the star power of culinary influencers and chefs who have built really successful followings online. We’re really focused on unlocking that pent-up demand for the most exciting food people that are leveraging the internet and media, to tell us stories and get customers really excited about food. We feel this is a very unique slice of the market to focus on and, ultimately, a huge opportunity.
Instagram started, I feel, with people taking photos of food, but there’s never been a way for culinary influencers to monetize it the way that a fashion influencer can slap a logo on a T-shirt. And also the stakes are much higher because you’re not eating that T shirt. It takes a certain type of operator and perspective to lean into the power of the creator economy, and I want to see that these new voices — that are clearly capturing the hearts and minds of so many people — are able to scale their businesses and do it in a strategic way with a partner that shares their values and allows them to continue the amazing work they’re doing with storytelling, partnerships, pop-ups, or other components of their business. We can be their partner in actually executing the food, setting up the supply chain, raising the capital, building the kitchen, and doing all of those things that if they had to do them alone would take them away from all the amazing work they’re doing online or otherwise. That’s really where we see our role and where we see our niche. Our whole operating system and model is designed to support that specific group of people that I truly believe are the future of food.
Q. I can tell you’re passionate about what you’re doing. Why is Hungry House important to you?
A. Food is super powerful, and it’s always been a passion of mine. My entire food career has been organized around the idea of “how do I make good food at scale?” So as I’ve seen ghost kitchens take off, and food delivery be an integral part of a customer’s life, I’ve been seeing all these virtual concepts scale, and ghost kitchens grow as a model. And I felt like we were leaving behind chefs and ways of doing business when it comes to sourcing and producing food that I truly believe are incredibly important to our future.
I wanted to create a ghost kitchen model that could support high quality ingredients and powerful storytelling as a way of acquiring digital real estate for the future and making sure that when people are interacting with food online and buying food online, they’re doing it in a way that supports a great future for all of us, and those critical storytelling and hospitality-driven elements, any experience that you would value with the brands. It’s literally a dream to build this company. I feel so honored to have this shot and work with incredible people that I truly admire.
Q. What do you feel was the big message that you hope the foodservice industry at large will glean from your presentation at the Ideation Fresh Foodservice Forum?
I’m really interested in the ways in which Hungry House can also support strong storytelling when it comes to the supply chain. I am constantly looking at how to highlight great partners of mine that are doing really incredible work in the supply chain, for example, I’m always highlighting Burlap and Barrel and Happy Valley Meat Company. I think there’s a lot of room for really innovative, supply chain partnerships as we move forward, because someone can bring to market a new product with Hungry House. We’re so focused on storytelling and content, and we could be a big part of a rollout of something really special. I always ask any audience I speak to, “what’s the coolest thing that you’re doing or you’ve heard of” and, “how can Hungry House potentially help you tell that story and increase access to that product or that person?” That’s one thing that I think was definitely an exciting thought exercise for this audience, as it is for many of your readers.
So, if you want to feel you haven’t made the most of your life, spend a little time with Kristen Barnett. While in college at Cornell, she served as President of Mountains for Moms and led a 13 person trip to the 19,341-foot high summit of Mount Kilimanjaro while raising money to combat obstetric fistula, a debilitating injury for moms. Shelater founded the Dyson Symposium on Women in Leadership and, in her spare time, was President of Delta Sigma Pi, the business fraternity.
Starting out her career at The Boston Consulting Group, in a profusion of jobs, she quickly wound up as Chief Operating Officer of Zuul, a ghost kitchen operator that was acquired by Kitchen United, and now she is at the intersection of food and technology at her entrepreneurial venture, Hungry House. Just describing the whirlwind that is Kristen Barnett gets us hungry.
If anyone doubts the value of the Ideation Fresh Foodservice Forum, well, what can we say but she gave the group an MBA in food and entrepreneurship in one single session. What a tour de force!
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Many thanks to Kristen Barnett for inspiring us all to step it up a notch… or fifty!