[ti:Online Food Ordering Gives Rise to ‘Virtual’ Restaurants]
[00:00.04]When it comes to eating, more Americans are ordering in instead of eating out.
[00:07.28]In some restaurants, cooks make food for other online restaurants at the same time.
[00:17.00]Like at Frato's Pizza, a family restaurant in Chicago.
[00:23.46]In the kitchen, the cooks make pizza.
[00:27.16]But they also make chicken, salmon and even frozen milk drinks
[00:34.47]—all of which can only be ordered online.
[00:40.72]Frato's owner, Michael Kudrna, launched the online-only businesses
[00:47.52]earlier this year to keep up with new eating trends.
[00:52.59]He says one third of his sales come from people using third-party apps on their cell phones.
[01:02.20]But those sales also cost him.
[01:06.57]Third-party apps can charge as much as 30 percent
[01:12.24]to manage the ordering and delivering of the food.
[01:18.20]David Portalatin is a food industry adviser for the NPD group.
[01:24.76]He says the $26.8 billion online ordering market
[01:31.86]is the fastest-growing source of restaurant sales in the U.S.
[01:39.24]Online orders are only 5% of all restaurants orders,
[01:45.08]but they are growing about 20% each year.
[01:51.88]The number of restaurant visits remain unchanged.
[01:57.80]The increase in online ordering in the U.S.
[02:01.88]has created openings for new kinds of businesses.
[02:07.72]One is called Kitchen United.
[02:10.54]It builds kitchens for restaurants that want to enter delivery or take-out markets.
[02:18.22]Chick-Fil-A, The Halal Guys and Dog Haus all have opened kitchens through them.
[02:27.12]Another company, DoorDash, delivers food to customers who order online.
[02:35.48]Fuad Hannon is the head of new business at DoorDash.
[02:40.68]He told the Associated Press that the industry is still young.
[02:47.20]It may be too soon to know how it will grow, he said,
[02:52.40]"but what we know is that people love to get their favorite restaurants delivered."
[03:02.04]Two other businesses, Grubhub and Uber Eats,
[03:06.47]say their virtual restaurant programs help small businesses compete.
[03:13.11]Both reach out to restaurant owners with suggestions for online restaurants
[03:20.05]based on data from customer searches.
[03:24.38]This information helps owners think about everything from
[03:29.64]how people get their food to what should go on the menu.
[03:37.00]Kristen Adamowski heads Uber Eats.
[03:41.00]She says they have helped launch 4,000 virtual restaurants worldwide,
[03:48.60]about half of them in the U.S. and Canada.
[03:53.84]Virtual restaurants have the benefit of testing new ideas without
[03:59.98]taking on expensive leases or employing more workers,
[04:06.24]said Rick Carmac, with the Institute of Culinary Education in New York.
[04:14.52]But he said small restaurants should look at the risks
[04:19.32]before starting an online restaurant suggested by third-party app businesses.
[04:27.38]Those businesses offer no training for kitchen staff to get used to making new foods.
[04:37.20]Other things to consider: whether their delivery containers are right for new dishes,
[04:44.44]or whether they want to increase their dependence on outside delivery drivers.
[04:53.40]Those are not small or easy things, said Carmac, who has worked with Uber Eats.
[05:01.72]He expressed concerns about the company's method, saying,
[05:06.48]"They give you the data, and then they leave."
[05:11.52]I'm Anne Ball.