We are in the midst of wrapping up an engagement on offsite commissaries (also called central kitchens) that provide prepared foods to foodservice segments such as prepared salads, deli sandwiches, pasta salads and baked goods. What we have uncovered in this latest study is the blurring of third-party central kitchens and shared kitchens. We hope to bring some clarity in this piece so that readers can take advantage of the explosive demand for this emerging value chain partner.

Image result for central kitchen

Image source: World Central Kitchen, Inc./globalgiving.org

In a nutshell, shared kitchens can house a number of different clients — caterers, bakeries, QSRs, culinary students, etc. Central kitchens, on the other hand, tend to be independent bakeries, delis or sandwich assemblers that provide all or some of their business to other businesses — such as c-stores, supermarket, vending or micromarkets.

Central kitchens can be either owned by the operator (QT Kitchens) or simply outsourced to provide say, a sandwich program to Kroger’s grab and go case or 7-Eleven’s prepared foods. Convenience stores (and vending — not shown) have long been the heaviest users of third-party commissaries/central kitchens.

 

Chart showing an older model of prepared-food preparation for commissaries/ Central Kitchens

 

Shared kitchens are often different than even “cloud kitchens” as shown in the table. Using Applebee’s as the example, a kitchen operated by the chain is considered both a central kitchen and a cloud kitchen. However, if Applebee’s outsources its business to say, Kitchen United (as it reported), they are then using a shared kitchen (sharing the space with other QSRs, entrepreneurs, students, etc.) 

Table showing the evolution of commissaries to cloud and shared kitchens

 

The key to this piece is not to confuse food executives, but to drive the point that mobile phones have created a window to just-in-time delivery, which means brick and mortar locations (e.g., restaurants) are being replaced by production centers not open to patrons. With delivery on the rise, traffic down and real estate at a premium, look for central production centers — whether a cloud kitchen or offsite kitchen to continue to expand well into this decade.

 

Looking for deeper insights around foodservice commissaries and central kitchens? Check out brand new report Selling to Offsite Kitchens 2020, available for purchase today!

 

Tim Powell is a Managing Principal of Foodservice IP. His responsibilities include recommending and developing business strategies, market sizing, designing qualitative and quantitative research methods, strategic planning and project management. Tim serves as a trusted foodservice adviser to management at several food companies.