Nimbus was recently spotlighted by CNBC, discussing the past, present, and future of the ghost kitchen industry. The video highlights the struggles that many ghost kitchen operators have encountered due to various challenges inherent in this operationally demanding business model.

Off-premise kitchens are an incredibly viable business model, but we’ve seen three key problems hamper many of the well-capitalized players in the space: 1) exclusive focus on delivery operations; 2) hasty geographic expansion; and 3) premature vertical integration.  

Many operators are focused on providing kitchen infrastructure and services geared toward delivery businesses only, which overlooks a huge swathe of the food industry that is also in need of affordable and flexible kitchen space.

At Nimbus, we have diversified rental models that allow us to service a broader set of food businesses, including catering, meal prep, pop-up operators, and more, which gives us a wider TAM and hedges against delivery market fluctuations and changing consumer preferences.

While growth is essential, we’ve seen other operators enter new markets too quickly, which has strained operational capabilities, compromised service quality, and caused kitchens to open and close within only a few months. Commercial kitchen build outs require significant CapEx, so building facilities without understanding the nuances of local regulations and customer preferences can prove incredibly costly. 

We’ve taken a much more measured approach to growth, focusing on establishing a strong New York City presence before considering growth in other markets, which has allowed us to hone our operating playbook and give us confidence as we enter new markets.

Many well-capitalized players also prematurely vertically integrated; they built and operated commercial kitchen spaces, developed ordering platforms to drive demand to tenants, and launched or licensed virtual brands within their spaces. Commercial real estate, technology, and food businesses are three vastly different business models that require unique operational attention and specific capital sources. Many ghost kitchen operators have faced difficulties in juggling the intricacies of each of these unique business verticals.

In contrast, Nimbus has prioritized building a robust foundation with a laser focus on facility operations. By focusing entirely on efficiently managing kitchen spaces and ensuring seamless facility operations, we’ve positioned ourselves to navigate the complexities of the industry with precision before considering broader vertical integration.