Food delivery services make way for Baltimore's first 'ghost kitchens'

Diners craving Korean eats from Haenyo can’t stroll into a storefront and sit down for a meal. But they can have the eatery’s rice bowls, dumplings and soups delivered to their doorsteps.

Unlike the other delivery options, Haenyo isn’t a restaurant. Founded as a pop-up last year, the operation is among Baltimore’s first “ghost kitchens,” dishing out meals from a commissary kitchen via Uber Eats. It’s an emerging model that keeps overhead costs low in a time when it’s increasingly risky to open a brick-and-mortar restaurant.

Cities like New York and Washington have already had a wave of delivery-only eateries crop up. And as services like Uber Eats proliferate, Baltimore could be next.

“There’s a booming food scene, but some of that real estate is really, really expensive. And to enter into the industry in a place with a lot of foot traffic ... that can be incredibly, incredibly expensive,” said Bill Gibbons, a spokesman for Uber.

It doesn’t help that Baltimore’s restaurant industry has grown fiercely competitive. Paired with the rise of convenience-seeking consumers, delivery services have laid the foundation for kitchens without retail spaces, said Brandon Chicotsky, a faculty member at the Johns Hopkins University Carey Business School.

“That combination has created a trend that will likely further evolve into a heavy market share of convenience versus dine-in,” he said.

And because food costs are relatively low compared with restaurant prices, customers have more room to pay for added services, such as delivery, he said.

Haenyo is the first ghost restaurant in Baltimore to partner with Uber Eats, which shares the food delivery market with DoorDash, Grubhub and others. (DoorDash and Grubhub were not immediately available for comment.)

Haenyo’s founders, Collin Morstein and Irvin Seo, plan to use sales generated through Uber Eats to cover rent at Share Kitchen, a commissary in Locust Point. Haenyo joined Share Kitchen Jan. 1 after operating out of restaurant kitchens during their off hours, and began offering delivery by the end of the month.

“The reason that we decided to pursue this was to have a little bit more control over our time,” Morstein said. “With Uber Eats, we’re not reliant on restaurant owners’ schedules so much; we can decide when we want to be available” and adjust delivery hours as needed.

Each dish has an estimated preparation time, giving Uber Eats drivers a sense of when they can expect to pick up orders.

“It’s a really good thing for us broadly,” Morstein said. “We get to continue our mantra of limiting overhead and attempting to feed more people.”

Haenyo follows in the footsteps of eateries like D.C.’s Republic Taco, a ghost kitchen, and its sister bakery Republic Kolache, whose ownersworked with Uber Eats while testing the market for a permanent restaurant.

“We realized we were headed in the direction of a brick-and-mortar and thinking about what [customers] would look at,” co-founder Chris Svetlik said.

Their forthcoming restaurant, Republic Cantina, is slated to open later this year in D.C.’s Truxton Circle neighborhood, and Svetlik said delivering food without a traditional storefront helped them gauge patrons’ interest in certain menu items. It also helped broaden their customer base.

“Having our brand recognition go as wide as possible is certainly an asset,” Svetlik said.

That was the case for Lindsay Goldin when she launched the Cookie Jar DC — an edible cookie dough company — two years ago. She signed up for every delivery app available, including Uber Eats, Postmates, DoorDash and Grubhub. The services helped customers discover her sweets when they were searching for desserts.

”We were the second dessert restaurant on Uber Eats in D.C., and so we were getting a lot of orders from the get-go,” she said. “If you’re just sitting at home on a Friday night and you wanted cookie dough … Uber Eats made it possible for people to get it.”

Last June she opened a weekly pop-up at Rise Bakery in Adams Morgan, and she’s pursuing a brick-and-mortar shop now. She also sells her dough online and in about 40 local shops.

But delivery-only businesses come with inherent challenges. For one, they’re weather-dependent and counter-cyclical to brick-and-mortar eateries.

“Cold days, rainy days are great for us,” Svetlik said.

And although Uber Eats provides access to potential customers, it can be tough to build relationships.

“You lack a face-to-face exposure, so there’s definitely a buffer between you and customers that maybe limits the types of feedback that you would get,” Svetlik said.

Morstein said that’s been a strange reality of launching Haenyo’s delivery operation.

“The weird thing is … we don’t actually see our customers,” he said. “It’s almost like you’re sending them a package.”

Building a customer base can be further complicated by Uber Eats’ delivery radius, which spans two miles from Haenyo’s Locust Point digs. A number of customers from Haenyo’s previous pop-ups — in neighborhoods like Mount Vernon, Station North and Charles Village — live outside the delivery zone.

“Hopefully this will give us the impetus to grow,” Morstein said.

smeehan@baltsun.com

twitter.com/sarahvmeehan

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