More Ghost Stories

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A couple of issues ago, I wrote about OMG BBQ LOL, one of the “facility brands” of City Storage Systems’s CloudKitchens. That’s the new venture from Uber co-founder Travis Kalanick, who secured a $400 million investment from Saudi Arabia’s sovereign wealth fund and is aiming for global dominance in the so-called “ghost kitchen” market.

These operations have no physical location for on-premise dining. Instead, they prepare meals in shared commercial kitchen spaces and sell them exclusively via app-based delivery services like Seamless, GrubHub, and Uber Eats, appearing side by side on the apps with traditional brick and mortar restaurants. Like Uber with its “subcontractor” drivers, CloudKitchens doesn’t actually put cooks and restaurant managers on their payroll but instead leases out kitchen space to independent operators who are looking to launch their own businesses.    

In the first installment I explored the CloudKitchens facility in Tempe, Arizona, where, while waiting for their commercial kitchen to be built, the company has engaged a dozen or more food trucks to post up in their parking lot and prepare food to be picked up by delivery drivers. These operators have their own brands and have built a following through social media, but in exchange for an extra 10% commission they can also fulfill orders received under the various “facility brands” that CloudKitchens uses around the country, like OMG BBQ LOL.

These brands’ click-baity names are designed to stand out on the apps and divert orders away from real restaurants. While trying to track down which food trucks or ghost restaurants were actually fulfilling the orders for OMG BBQ LOL in Tempe, I was troubled by the fake branding and all the secrecy with which CloudKitchens is surrounding itself. I noted last time that my exploration into other cities turned up some other interesting stuff. Here it is.

If you look up the addresses for other “locations” of OMG BBQ LOL or Smokey’s BBQ Sandwiches (another CloudKitchens facility brand), you’ll find that some are housed in converted warehouse-like buildings like the one in Tempe. Oddly, though, you’ll also turn up others located in an apartment complex, like Central Park Apartments in Atlanta or Davie Junction, a neighborhood of “upscale boutique townhomes” in Davie, Florida.


The Davie, Florida, location of OMG BBQ LOL is apparently somewhere in Davie Junction Townhomes 

Other addresses for OMG BBQ LOL are even more unusual, like 576 Haight Street in San Francisco. That’s also the address for Memphis Minnie’s, the city’s longest continuously running barbecue restaurant. GrubHub and Door Dash show that the OMG BBQ LOL in Detroit is located at 7444 Beaubien St, which just happens to be the building occupied by Parks Old Style Bar-B-Q, which has been serving slow-smoked ribs since 1964.

OMG. What is going on here?

In its efforts to bootstrap its ghost kitchen operations, it seems, CloudKitchens is not just enlisting food truck operators looking to sell some extra barbecue at the end of the day. It is also going out and recruiting long-standing brick and mortar restaurants to sell under its brands, too, but exactly why is a little unclear. 

Matt Newberg of the HNGRY newsletter has been the best source for information on CloudKitchens and other virtual restaurant companies. Back in June he reported on how CloudKitchens is pursuing a second fork in its business strategy, In addition to signing up tenants for its ghost kitchen facilities, it is also enticing independent restaurateurs to use its software to act as “mini ghost kitchens” and sell CloudKitchens’ “delivery-optimized” brands out of their existing kitchens.

They’re not being at all transparent about it, either. CloudKitchens has apparently set up an operation called Future Foods, which promotes itself as “delivery consultants” and has a sales team that is aggressively courting restaurateurs. I have to trust Newberg’s reporting that Future Foods is actually an arm of City Storage Systems (CloudKitchens’s parent company), for nothing on the Future Foods website gives any indication who owns the firm or even where they are located.

The web site does make a compelling pitch, though. “Skyrocket your restaurant’s delivery sales,” it declares, offering to help clients “launch virtual restaurants from your existing kitchen so you can tap into new customers and increase your restaurant’s delivery sales.” Data-driven menus and marketing experts offering a risk-free service with no upfront fees: it sounds like a tempting deal, especially if you are an owner desperate for sales in the midst of a pandemic. 

According to Newberg, what that service gets you is a free tablet with CloudKitchens’ Otter software installed on it along with two dozen brands you can choose to sell food under. Most of the menu items sold by these “restaurants” are generic things that are easy for a restaurateur to make in his or her existing kitchen, like wings and burgers, or fit into a standard genre like Mediterranean food or barbecue. 

FutureFoods apparently sets owners up with templated permutations of dishes and provides the pictures that will appear online on the delivery apps. Newberg talked to some of the restauranteurs who signed up for the service, and he reports that “many seemed confused by what they actually signed up for and what the brands actually represented.” One restaurant owner in Philadelphia turned on the Otter tablet and got bombarded by dozens of orders that he wasn’t ready to fulfill and finally just shut the device off.

One can see why a barbecue restaurateur might give such programs a shot, since these days takeout and delivery sales are essential for just keeping the lights on. But it does put them in the odd position of competing with themselves in the apps. As a test, I went to Seamless and set a street address within a few blocks of Memphis Minnie’s, then typed in “BBQ” in the search box. Memphis Minnie’s appeared 24th in the list, putting it on the second page, where it’s sure to get no clicks. OMG BBQ LOL appeared 5th.

Selling via food delivery services is risky enough for restaurateurs, since many dishes don’t hold up well inside cardboard containers and operators lose control once the food leaves their kitchen. Selling under a different brand with stock photos supplied by a consultant seems to only increase the reputational risk. Memphis Minnie’s has undoubtedly picked up some extra sales under the commissioned facility brand, but it has also garnered them this review on Yelp: “Sort of confused why this is called OMG BBQ LOL on delivery apps. Photos on there looks so diff from posts on yelp.”

In the long run, none of this looks like a winning proposition for the restaurateur, and it isn’t exactly clear what CloudKitchens gets out of the deal, either. Future Foods licenses their social media-friendly “concepts” in exchange for a 10% commission, which comes on top of the standard 30% delivery fee charged by most of the app services like DoorDash and UberEats. That’s a pretty significant haircut for the restaurateur, but 10% doesn’t seem enough to support a big tech-driven company. (Even at a 30% commission, the app companies are bleeding money and have yet to turn a profit.)

Matt Newberg has noted that Future Foods seems to be targeting restaurants that are located in the same areas where it has ghost kitchen facilities under construction, and he speculates that the company is testing which type of tenants and brands will be most successful once the facilities open. If that’s the case, then existing restaurants signing up to sell the company’s brands are unwittingly paying their future competitor to perform market research.

It’s all very murky and mysterious, but in the end I’m not particularly worried that ghost kitchens and delivery apps are the future of barbecue. That would fly in the face of everything that makes barbecue so appealing to diners—a shared communal experience, devotion to a centuries-old culinary art, the appeal of story and tradition. 

More than anything, I just don’t see how a business based on misinformation and subterfuge can be viable for the long haul. But I suppose it will allow its founders to extract hundreds of millions of dollars from credulous sovereign wealth investors and get even richer in the process.

 

In last week's Cue Sheet, while discussing the recent American trend of fusing Asian flavors with traditional barbecue smoke, I also noted that American-style barbecue joints were proliferating in Hong Kong. Recent news has underscored that barbecue is a rising trend all across Asia.  

This week the Singapore news outlet Today profiled Chia Jue Mao, a 28-year-old pitmaster/chef who just launched a pop-up operation called S'Mao Barbecue inside of Casa Verde, an Italian restaurant in Singapore. He's got a pretty legit barbecue pedigree, too.

Mao graduated from the Culinary Institute of America’s campus in Singapore and worked in several high-end restaurants there before heading to the United States for a barbecue apprenticeship. He worked for a time at Hubba Hubba Smokehouse in Asheville, North Carolina, then headed down to Texas, where he spent a year working at the acclaimed Leroy & Lewis in Austin.

The pandemic prompted Mao to return home to Singapore in April, where he took a position with Les Amis Group, which owns Casa Verde. They decided to launch the three-night-per-week pop-up to test Singaporeans' appetite for Texas-style barbecue. Most American-style barbecue restaurants in Singapore, Today notes, use electric smokers with wood chips for flavor, but Mao is cooking his beef short ribs, pork ribs, and andouille sausage on an offset smoker fired with a mix of hickory and charcoal.

Over in Hong Kong, Andrew Sun has written several features for the South China Morning Post on the rage for American barbecue there. One of these notes, "Ribs low and slow, brisket rub – American smokehouse lexicon is on the lips and menus of chefs everywhere, Hong Kong included." Unlike Chia Jue Mao, though, most of the restaurateurs cooking barbecue in Hong Kong know American barbecue only from afar.

The chef at Smoke & Barrels, Miguel Gallo, is a Spaniard who grew up in Venezuela, and he's never tasted barbecue in the United States. Asher Goldstein, a native of Israel, got started in the Hong Kong market with a Middle Eastern restaurant named Francis before pivoting to barbecue with Mr. Brown in 2019. He's never been to the United States, either, but he did pick up a lot of grilling and smoking tricks while working in Australia. Englishman Nathan Green, the chef at Henry in the Rosewood Hotel, may not have visited America, but he does cook brisket, pork belly, bacon and Andouille sausage on an electric smoker, seasoning it with apple and almond wood and finishing it in a sous vide bath, which is about as traditionally American as you can get, I think.

The one American chef in the lot, Chris Tuthill, hails from the barbecue mecca of Albuquerque, New Mexico, and he leads the kitchen at Smoke & Barrel. (Yes, Hong Kong has one restaurant called Smoke & Barrel and another called Smoke & Barrels. Mind the 's'.) Tuthill imported a smoker from Heartland Cookers in Sikeston, Missouri, and he had to knock down and rebuild a wall to get it inside the restaurant. Tuthill has dubbed that pit "The Beast," though here in the U.S. we might call it a medium-sized rotisserie smoker. 


"The Beast", the wood-fired rotisserie smoker at Smoke & Barrel in Hong Kong (from Smoke & Barrel website)

Curiously enough, one of the things driving the interest in barbecue in these Asian cities is American streaming television services. In particular, two Netflix shows—Chef’s Table: BBQ and The American Barbecue Showdown—have really struck a chord with Asian viewers and are prompting them to seek out pit-cooked American barbecue. I expect we'll see a lot more offset pits and rotisserie smokers getting shipped east in the months to come.

 

This week QSR Magazine published an interview with Sam Jones of Skylight Inn and Sam Jones Barbecue fame, and it gives some inside scoop about how he's adapted operations in Ayden and Winterville and an update on the forthcoming second location of Sam Jones Barbecue in Raleigh.

Not much had to change at Skylight Inn when Covid-19 hit, though they have closed the seating area in the front dining room. At Sam Jones Barbecue in Winterville, Jones and his team retooled their drive-in to make it move more quickly. Jones estimates they are now doing 70% of their business through the drive-thru or curbside pickup, and sales are as strong now as they had been pre-pandemic.  

As for the pending Raleigh location, it's coming along slowly but surely. Before Covid-19, Jones and his team had been held up by permitting hurdles, and since then they've been dealing with equipment delays due to supply chain interruptions after so many appliance factories shut down in the spring. Jones also reports that he got a lot of resistance from city officials over his smokehouse plans, and he had to jump through "fiery hoops and alligator ponds" and ended up shelling out about $50,000 more than he had expected  just to get the smokehouse built.

This is consistent with what I've heard from some of the other restaurateurs trying to open new barbecue spots in Raleigh. One of them speculated that Raleigh officials want to act like they're running New York City—not a great stance for a city whose boosters are touting it as the next great American barbecue capital.

The last I heard from Sam he was hoping to get the doors open in Raleigh this month, but in the world of barbecue restaurants all opening dates are tentative. You can't rush good barbecue.

 

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