Ghost Kitchens and Hospitality with Bill Stavrou
Bill Stavrou, Zack Oates
Bill Stavrou (preview)
Even if the food’s great, the space is beautiful, all of the above. When it’s all said and done when you leave there, the thing you remember is how you were treated. What was that overall experience? That’s what really typically resonates with a consumer.
(Intro) What’s up? Zack Oates here – author, entrepreneur and customer relationship guru. Welcome to Give an Ovation: Growth strategies for restaurants and retailers, where we find industry leaders to share their secrets to grow your business. This podcast is sponsored by Ovation, the actionable guest feedback tool that works on or off premise and is easy, real-time, and actually drives revenue. Learn more at Ovationup.com.
Welcome to another edition of Give an Ovation. I am joined today by Bill Stavrou, who is the founder of Foodhaul. Now, this guy, he’s really interesting. I’m glad that we were able to get him onto this podcast. And I’m really excited for you guys to listen to his experience because he owns a restaurant group in Chicago. It’s a family business been around for 50 years, he has spent 30 years in the brick and mortar business, and now he’s using that experience in this industry to help others with branding, staffing, distribution and costing for their kitchens. Bill, so glad that you’re joining us today. We’ve got a lot to unpack here, man.
Yeah, glad to be here. Thanks for having me, Zack. I appreciate it.
Absolutely. So first of all, Bill, tell us a little bit about Foodhaul. What was the gap that you saw running these brick and mortar businesses for 30 years? I mean, and then you founded foodhaul – What was the gap that you saw in the marketplace?
So really, it was born from just watching food delivery and the the growth trajectory of food delivery starting back in 2014 and 15. When we started implementing it into our into our businesses–
I thought that all this stuff started in 2020. It started before that??
It did believe it or not. Yeah, we started to see tremendous growth even way before that, right? The last 12 to 14 months have just been a huge accelerant to that space. But it was already, I mean, double digit growth year over year in that space. There’s no question. This is something that had already begun to be a part of the industry. And there was already a lot of players playing in the game. Right? So cloud kitchens, kitchens united… The whole idea of food delivery was something that was already really being addressed in the industry. It’s just, it all just really moved a lot quicker once once everybody got shut down and the pandemic hit. It was an accelerant in some ways. It was, challenges and others but you know, it’s been an interesting year and everybody in food services has gone through a fun year for sure.
Yeah. So what exactly does Foodhaul do?
So what Foodhaul does is we provide under capacity kitchens, typically in second and third tier markets, meaning kind of underserved markets from a higher-end culinary perspective. So we provide those underutilized kitchens with ghost concepts that are chef-created by typically notable celebrity chefs. We have Fabio Viviani, Rick Tramonto, we have some great chefs that are Top Chef award-winning chefs. Fabio Viviani is a celebrity here locally in Chicago and somewhat nationally. We create those concepts, we license them to these under capacity kitchens around the country, and they fulfill that niche, that need (we believe we’ve proven at this point) for those consumers in those markets. So we’re regional in the Midwest right now. I’ll give you a great example. So like Brown Deer, Wisconsin, right now is our number one location right? Where they don’t have access necessarily to come to Chicago or you know, that immediate access anyway to order from a Sienna Tavern in Chicago, or Rick Tramonto in Chicago, or Dirk Flanigan Flanagan in LA, and on down that list. And those are, that’s all part of our model, is really creating unique access, while supporting these local businesses and helping them with their sourcing and processes and so on to execute all these concepts.
Now, historically, if you had an underutilized kitchen, you just reduced headcount, right? And now, there’s kind of a newer opportunity out there. How do you recommend that restaurants go about evaluating how underutilized their kitchen is, and to assess, “Should I do a ghost kitchen? Should I not?”
Yeah, so that’s, you know, obviously the last year or so. So one of the things that we talk about is we always use the term “kitchen” because it’s not just the restaurant industry. So we have hospitality in our in our portfolio, we have sports management in our portfolio, contract food service in our portfolio, and clearly we have the restaurant industry in our portfolio of licensees. But you know, it’s an interesting dynamic, if you’re in the industry, you typically, I mean, if there’s downtime in your kitchens…
Capacity is a unique thing. We’ve we found that restaurants and customers who didn’t even know they had capacity brought us in and found ways to create excess capacity or, create new capacity just to meet the needs of a consumer. I mean, there’s a lot of elasticity in the restaurant industry. We find ways to bring in more revenue when we need to. And our marketing and our entire – the whole package that we bring to the table drives revenues, at times when perhaps it’s not as typical to be at your highest revenue point.
So our marketing tries to drive early revenue, predictable revenue, so that orders will be funneled through pre-shift so that you know that you’re going to have 10 orders tonight, for discount. Or, by Fabio Viviani, these other times they’re going to come in, and therefore be able to give some more predictability to it so that the access or excuse me, the capacity doesn’t necessarily have to be as readily available, or as obviously available, I guess, is the best way to put it. But it’s really capacity in labor and in facilities. If you have both of those, we can create really compelling revenue for that licensee.
Because, you know, working in the restaurant industry myself, it’s like, you know, I have, I have friends who their restaurants, they would rent out in the mornings, right, like a steak house, they rented out in the mornings to a bakery. And so, before 2020, that was kind of like, Hey, I’m being smart and getting more bang for my buck here. But you’re saying that even during the day, right, even during night, like these ghost kitchens that you can supplement in in with revenue that you wouldn’t have otherwise gotten? Or even known about.
Right? And, and, you know, one of the things that I’ve seen a lot of, is this whole concept of celebrity chef with these ghost kitchens. Why do you feel like that’s an important aspect of doing a successful ghost kitchen?
Well, so we believe that part of it’s a celebrity chef – it’s really about a brand story. So we do anything from celebrity chefs to brands. So we’ve proven that the revenues in a ghost kitchen that are backed by a story. So like I said, really, we’re all about access. So when we can tell someone in a market who doesn’t typically have access to notable chef concepts that you would in one of the big cities, right? So if you’re in Chicago, New York, LA, San Francisco, etc., that brand story really speaks well to them. And the processes, the sourcing, the recipes, the entire, the whole piece of the whole puzzle, so to speak, is something that we bring to the table that the average owner of that kitchen, in most cases, restaurants, wouldn’t necessarily be able to do themselves. In the cost of doing it through us, as opposed to doing it themselves from a startup standpoint, from a risk standpoint, significantly less with us. And from an ongoing standpoint, slightly higher, because we leverage our scale with third party last mile delivery players to bring that cost down so that our licensing is actually really just filling that gap of what they may have done on their own.
So it’s really about brand story, it’s about having something that’s compelling to that consumer, we see a ton of ghost kitchens out there, and there’s some other players doing what we do that provide concepts that that, you know, they’ve scaled, and I think they’re doing just fine, but they’re concepts that are kind of made up if you will, right. And so they don’t really have a story behind them. Yeah, I mean, I you know, like most restaurants who could find a way to come up with, you know, a new wing concept or a new grilled cheese concept on their own right?
What we bring to them is a Sienna Tavern from Chicago, you know, a menu that’s a list of pastas or a Richard Tromonto from Chicago or Daniel Hines from LA and on down the list. They’re really lending this expertise to these kitchens to reproduce respect and I think that’s what’s most compelling. I don’t know too many that are really doing the celebrity chef game. A lot of a lot of them are doing the celebrity game. Yeah. And so there’s – we see a big differential there. We’re really focused on it being celebrity, our notable chefs that have a real story about the food and, and really lend a process and recipes and an IP to these under-capacity kitchens. I think the the idea of just celebrity is one that is proven to be a little bit problematic in the brick and mortar space. And I think eventually that the brick and mortar space and the ghost space-they’re going to be very similar at some point in the near future.
Now, why do you feel like that story is so important with a ghost kitchen? Because, you know, you have these like really clever names, these like fun logos. And I feel like or in your case, like, you know, these really notable chefs, who have these great reputations behind them. Why is this story so important with these ghost kitchens that maybe might not have been with a normal brick and mortar on Center and Main Street?
That’s a great question. So really, what it comes down to is, is that’s who we’re competing with, right? So when the consumer is pretty attached in their own geographical area, right, so I’m here sitting here in the suburbs of Chicago, I know the restaurants in my area. If I’m looking for delivery tonight, and I go on one of the third party apps in search of that, what’s gonna compel me to look at a concept? What’s going to compel me to think of something new and different, outside the realm of what I’m already used to doing?
And so if it’s just a made up name, not sure that it does. I think that the fact that here I am sitting in the suburb of Chicago, and there’s a great notable chef that maybe I’ve heard over, maybe we do a good enough job, telling the story of, that’s based in New York, or based in Salt Lake or, you know, etc. We, in telling that story of access that, hey, you’re kind of transformed tonight, you get you get through by supporting local, I’m still supporting my local business, because that’s who’s actually producing the product, I get access to something that traditionally I’d have to fly somewhere or drive somewhere far away to get. And I think that’s what’s really kind of a unique experience.
Yeah, because it’s got to have something to make me stop scrolling, right? I mean, yeah, it’s nowadays, when we’re so inundated in a hearing, and with my thumb, just flipping up, scrolling down looking for something to eat. It’s like, what’s going to catch my eye? And I like the way you’re talking about that. It’s, it’s got to have that, you know, that grand brand story, but it’s also got to be, you got to tell that story in a really pithy way. Otherwise, if you can’t get it out concisely and compelling, like you said, then I keep scrolling. Right?
Yep. Yeah, it’s, that’s a unique point. And it’s something we talk about a lot internally is how different our world is. That’s the biggest difference between brick and mortar. And this, this virtual space, if you will, is that a consumer can roll through menus, if you walk into a restaurant and sit down, the odds of someone getting up and leaving, because they just something what didn’t catch their eye – It’s pretty slim, right?
I did it with a very large pancake shop. I sat down there, and I was like, “Wait, I used to come here??”
That’s really funny. Yeah, I think maybe everybody’s done it once. But in the virtual world, it’s done constantly. I mean, it’s almost, you almost like FOMO if you take the first menu you look at right? like wait a minute, there has to be something better actually to look at. So we need to be, we need to give them some level of, of reason to be there. And it’s been, it’s been a great experience, we’ve helped a lot of current kitchen and restaurant owners create really, really unique revenues for them. And we’ve set it up in a way. And I think this comes from my background, and the traditional brick and mortar that, that it’s really been always about clearly building a business that on our end is profitable. But really knowing this, the way that this is going to be sustainable is when these partners, these fulfillment partners have to be profitable. It has to be, it has to be a solution, not a problem for them.
And I think we’ve all heard the, you know, the years of rumbling about third party platforms, and how they’ve been a problem, not necessarily a solution for brick and mortar. And I think the big difference for us is that it’s non-cannibalizing this revenue. And that’s the big differentiator, right? We’re not taking current customers out of those restaurants, and turning them to Foodhaul. We’re taking customers they otherwise wouldn’t have had and bringing them through Foodhaul.
Yeah, I think that’s a great differentiation. And spending so many years in brick and mortar. It’s gotta feel a little bit weird, Bill, like as far as the guest experience goes, right? You can’t go up and, you know, shake your guests hand. You can’t go up and do that table touch. How do you maintain a brand a relationship with your guests? When everything’s been taken away from the restaurant like that? Where it’s not happening in your dining room, it’s happening in their living rooms?
Yeah, that’s a great question. I wish, I wish I had a magical answer to that. Because one of the things that we really do talk about as kind of our just.. a vision that we have is, “How do we bring a level of hospitality to this process?” Even through packaging, through some level of engagement, with follow up emails, with our chefs reaching out. And and we’re working tirelessly on that. That’s, that’s kind of our biggest, what we believe in the end is going to be a big differentiator for us is really engaging that customers, so they feel like they’re part of something. Or that when they have food delivered to their home, which is what we’re all about, that they have that experience, at least close to or in some way. An experience where they feel that level of hospitality that I think has always been, at the end of the day, the biggest part of almost every restaurant success, even if the food’s great. Space is beautiful. All of the above. When it’s all said and done, when you leave there, the thing you remember is how you were treated. What was that overall experience? That’s what really typically resonates with the consumer.
Absolutely. By the way, we need to talk. Because I think I think you’re absolutely right. The most, the most significant human desire is to feel important, right? And you could have great food, you could have great service. But I’m sorry, sir. Ma’am. That is table stakes. Like, you’re not going to grow an incredible business off of good food and service. You you grow it because you build loyalty, you build hospitality, and you create a brand that people can attach to and they resonate with. It’s, you know, Apple created a brand based off of a philosophy and that resonated with people. Yes, the products are good, right. If their products were crap, no one would be talking about Apple.
That’s understood, right?
Yeah, exactly. So and I feel like a lot of times, it’s been really easy to kind of rest on your laurels. I’ve got good food, decent service, good location. So I’m okay. Like, nope, 2020 happens!
Well, yeah, and it’s a never ending battle, right. I mean, like, you know, you said earlier, we’ve been at this for – our family business is 52 years old. Our original location. We have others that aren’t quite as old. But that’s been always – our focus has really been about that consumer experience, knowing who our customer is, making sure that they feel important. Clearly they have to be or else we won’t be successful. And trying to implement that into this, we do have some things we do differently. And it just triggered a thought. So one of the things that we do is we really do work with our fulfillment partners to create a level of transparency to the consumer.
And I think that’s another challenge in the ghost world, that hasn’t really been talked about much, but one that I think is going to be spoken about the near future, is the fact that the consumer really has no account of-there’s no accountability to the consumer in the traditional ghost space where, like kitchen a that no one knows where it is, and where it’s coming from is producing the product that comes to your door. If that experience isn’t, you know that there’s really just the the best way to put – there’s no accountability. There’s really no one responsible for that experience. And so we partner with each kitchen that we do business with. They market with us, we still – we select who’s going to fulfill these orders with us carefully. We work with broadline distributors to help us select who they are, we scrape, you know, review sites, we scrape the third party platforms to find who has the highest ratings, who’s the pillar of that community, that would be a great representation of us. And that’s what we go to. And we give them the opportunity to monetize that, that asset that they’ve created, which has a good reputation, and so on.
And then that consumer then I think, we believe again, it’s been proven some of these things we, we’ve tried, we iterate, we try again, and we keep going over the course of the last two years in this business model. And we really learned that that’s where we get the most lift is when people truly feel comfortable with where their products are coming from. And and so it’s brand story. It’s that they’re comfortable with their products coming from somewhere reputable and local because they want to support local. And that combination has been really fruitful for us.
Love that. What would be, Bill, your final piece of advice to kitchens listening?
Oh, I think you know, I’m not great at giving advice. I just think that if it’s -I think that the biggest key is is that the world has definitely changed over the course of the last 12 to 14 months. It was already changing. It just really sped up. So my only recommendation: anybody out there, because the industry has a tendency to be a little archaic in nature, is to make sure you’re looking at future trends. Make sure you’re you’re utilizing every asset you can to its fullest. Because I do believe that that’s going to be the part of the future of the business. You know, downtime. And just maximizing every bit of labor and facilities is really going to be the key to success going forward. But I think brick and mortar is here to stay. It’s not going anywhere. I’m not, I’m not here to say that it’s a, it’s a dead business. We just covered why hospitality is such a great thing. And it can’t be replicated. Simply put, so I’m bullish on that as well. I think that they can coexist.
I’m with you. I’m not as confident in the traditional early 90s malls, but I believe that the brick and mortar is here to stay. I think you look forward to the year, you know, 3001 and there will be people in some capacity gathering together to eat food in groups. Now, I would like that
They’ll have a martini in front of them, right?
Yeah, exactly. So anyway, here are my key takeaways, Bill.
Number one, leverage your underutilized kitchen space.
Number two, ghost kitchens are really about finding a grand brand story to compel a consumer to stop the scroll. There’s a lot of alliteration and a couple of rhymes. But I think that kind of like summarized what you’re saying.
Number three, you need to make people feel the love, especially with hospitality. Even virtually.
Number four, be transparent with ghost kitchens. As Sean Walchef, our dear friend at Cali BBQ, likes to call it – be a friendly ghost kitchen.
And then lastly, the world has changed. So change with it. Bill, how do people find you/follow you?
So we’re Foodhaul.com or @foodhall_chi on Instagram. And that’s Bill Stravrou on LinkedIn.
Awesome. Well, Bill, for helping distill your 32 years of experience down to 20 minutes of an awesome podcast, today’s Ovation goes to you. Thanks for joining us.
Thanks for having me, Zack, I appreciate it. Nice to meet you.
(Outro) Glad you were with us today. And thank you! Thank you to the risk takers, the troublemakers, the crazies who are keeping this world clothed and fed. You’re the ones who deserve an Ovation. Again, this podcast was sponsored by Ovation! To see how we can help you grow your business, go to Ovationup.com. Don’t forget to subscribe, and as always, remember to give someone in your life an Ovation today!
Find out how the founder of Foodhaul keeps hospitality alive through ghost kitchen concepts.
FREE E-Book Download
The Off-Premise Restaurant
by Restaurant Experts
No, the title is not an oxymoron. Bill Stavrou is the founder of Foodhaul, a Chicago-based restaurant group that provides under-utilized kitchens with ghost concepts created by notable chefs. Bill’s family business has been in operation for over 50 years, and he’s now bringing his 30 years of hospitality experience to help restaurants with branding, staffing and costing!
Bill has seen success by delivering hospitality off-premise and shared some of his thoughts on the topic this episode. Here are some of the main topics he discussed with host Zack Oates:
1) Leverage Your Under-Utilized Kitchen Space
In the past, un-used space just meant cutting team headcounts. But ghost kitchens provide a different option. Should you create make one? Bill says anyone with extra capacity in labor and facility can create really compelling revenue.
2) Ghost Kitchens Are About Stories
Because of the low switching costs of DSP’s like Doordash, ghost kitchens need a compelling story to stand out and grab attention (something more than just another grilled cheese or wing concept.) That’s why Foodhaul uses notable chefs and brings rare menus to regional areas.
3) Hospitality Means Love, Even Virtually
Bill doesn’t have a magic answer to the question of how to deliver hospitality off-premise, but he does believe you can show love through packing, engagement, and follow-up emails. No matter how good your food is, in hospitality, people remember how they feel. Even off-premise.
4) Be A Friendly Ghost Kitchen
One way to build loyalty is to build transparency. Bill has found that customers are more comfortable with ghost kitchens when they know exactly where the food is coming from. Help them understand that it’s local – people love supporting local.
5) The World Has Changed, So Change With It
The industry was moving before COVID, but it has accelerated in the last year. If you tend to be a little archaic like much of the industry, look at future trends. Utilized every aspect of your restaurant to the fullest!
For more from Bill, you can find him on LinkedIn as Bill Stavrou or visit foodhaul.com or @foodhaul_chi on Instagram.
Thanks for reading! Make sure to check out the whole episode, as well as other interviews with restaurant gurus by checking out “Give an Ovation: A Podcast For Restaurants” on ovationup.com/podcast or your favorite place to listen to podcasts.