Comment by dragontamer | Hacker News Reader

Comment by dragontamer | Hacker News Reader

Parent Full thread

> The four-year-old company has largely pivoted to an enterprise model where it works with restaurants that have no storefront and prepare their food in shared centralized kitchens, or “cloud kitchens”; with delivery providers like DoorDash and Postmates; and with existing pizza companies to build a hub-and-spoke model for the entire delivery industry. The company has been trying to morph into a data and logistics provider, part of an effort by founder Alex Garden to become “the Amazon of food.”

So they want to become... a commercial bakery? https://www.youtube.com/watch?v=3UjUWfwWAC4

Once again proving that SV companies do no market research before making their ideas...

I'm not in the food industry. I've talked to a couple of food engineers though, and its apparently a very difficult space to work in, with a variety of safety regulations to prevent disease (and if disease does break out, provide a mechanism to track where it came from).

Ignoring that, the space of commercial kitchens / commercial bakeries already produces tons of bread for a variety of companies. From my understanding, these commercial bakeries are flexible enough to change the recipe and create different breads / doughs for a variety of companies. That is to say: commercial bakeries are already "hub-and-spoke" models that centralize production for McDonalds / Burger King / Grocery Stores / etc. etc.

-------

If you're entirely focused on logistics / sales of products from a kitchen to a variety of restaurants, that job is called a Food Broker (http://www.foodbrokers.org/). Its kind of the opposite of a commercial kitchen: if a small kitchen makes a particular food that probably has mass-appeal, a food-broker will distribute that food in a wide area. Food broker work for many kitchens, delivering food to many commercial locations.

In effect: the food industry is already filled with "hub-and-spoke" style businesses. Food Brokers, Restaurants, commercial kitchens, etc. etc. Ever think why your cheap chinese food all tastes the same despite coming from 10 different restaurants?

Cloud kitchen? Are you serious?

Is Silicon Valley now at the point where they are inventing things that already exist, but they aren't yet aware of because of the bubble they are stuck in?

And that is why it is a bubble!

SV VCs are throwing money at everything they can, even bad ideas or things that already exist. I wasn't around for the dotcom bubble but I heard it was exactly the same way.

Difference is the dotcom bubble wasn't rat fucking the rest of the economy.

Some people call them "dark kitchens" or "ghost kitchens" instead.

It's what Travis Kalanick is up to these days, incidentally. Saudi Arabia's sovereign wealth fund has supposedly put 400MM into his new company at a 5B valuation.

I think next big thing will be 'Dish as a service' where one does not have to know how kitchen works, or the quantities of ingredient combined in what proportion. One can just order a sandwich platter or a pasta tray for 100 people without ever being bothered about how it is done. Now that would be revolutionary.

Catering?

It's been a while, Soylent for a while existed for a very long time to feed tube fed patient and other people unable to consume solid food, made by Nestlé and othjer giants. The "genius" was in the marketing to convince people able to eat real food they actually wanted that.

"Cloud", in this case, is a buzzwordy but brief way of saying "capacity quickly scalable up and down, with fixed costs mostly replaced by variable ones".

The new "cloud native" model that's popping up in places like NYC is one where restaurants will farm out their delivery orders to a commercial kitchen. This commercial kitchen may make the delivery orders for 50+ restaurants, some of which have no physical storefront. Delivery drivers just go to a warehouse somewhere instead of the main storefront and the customer is none the wiser.

Most takeout / delivery places have been reduced to a menu and a handful of recipes by services like GrubHub and Postmates, so I guess this isn't surprising.

I was at a brick-and-mortar restaurant in a good location ordering and saw that 90% of their orders were going to GrubHub and Postmates. It seemed silly to pay of the downtown overhead and make the courier deal with parking for something that could be done out of a warehouse. So part of this model I get.

Until these Vc funded delivery services go belly up because the business model isn’t sustainable without subsidized prices. Then restaurants that got rid of their restaurants will have no business at all.

Not sure that matters much; 80% of restaurants in NYC don't last more than 5 years anyway.

And I'm not sure the business model is unsustainable either -- food delivery existed profitably long before GrubHub.

It is the echo of WeWork "disrupting" office rentals.

Can't audit a cloud kitchen! It's everywhere man!

Reply on news.ycombinator.com