Kroger Is the Latest Entrant in the Rapidly Growing Ghost Kitchen Segment

Kroger, the largest supermarket chain in the U.S. and second largest food retailer, is expanding into the ghost kitchen category, going up against a field of startups and delivery service providers including DoorDash.

The company today announced the launch of two on-premises kitchens at locations in Indianapolis and Columbus, Ohio, in partnership with ClusterTruck, a tech startup that operates delivery and in-store pickup restaurants.

“Kroger remains focused on providing our customers with fresh food and experiences enabled by industry-leading insights and transformative technology,” said Dan De La Rosa, Kroger’s vp of fresh merchandising, in a statement.

Here’s how it works: Kroger is carving out about 1,000 square feet at each of the stores for ClusterTruck staff to prepare meals. The ghost kitchen, a term used to describe professional cooking facilities built for delivery-only meals, will provide a variety of on-demand menu items with no delivery or service fees. Customers can order from a menu offering more than 80 meals.

De la Rosa calls the kitchen “an innovation that streamlines ordering, preparation and delivery, supporting Kroger as we meet the sustained customer demand for quick, fresh restaurant-quality meals, especially as we navigate an unprecedented health crisis that has affected every aspect of our lives, including mealtime.”

This is in line with grocery chains’ ecommerce evolution, which has helped deliver 127% digital sales growth in the second quarter.

As for its partner, ClusterTruck is building a software system that creates custom algorithms to optimize kitchen and delivery operations while removing the “pain points” of third-party delivery to ensure all meals are delivered to customers within seven minutes of their preparation and, on average, less than 30 minutes of ordering.

“ClusterTruck combines leading software, high-quality ingredients, and delicious variety to elevate the prepared food delivery experience,” said Chris Baggott, ClusterTruck co-founder and CEO, in a statement. “As the prepared food delivery category continues to explode, we’re thrilled to play such a pivotal role in Kroger’s fresh and forward-thinking meal delivery strategy.”

The insights Kroger gains from the first two kitchens will inform its future expansion plans, according to a company spokesperson.

Source Article