February 26, 2021 • 20 mins
More vaccines could be approved very soon. One from Johnson & Johnson and another from a company called Novavax. If authorized, this vaccine could be one of the most potent weapons against the pandemic. Early data shows that it could be the first shot to slow down asymptomatic spread and potentially provide longer-lasting protection. The other part of this story is the company itself, Novavax was a small biotech company that had tried to develop an approved vaccine with no success. Gregory Zuckerman, special writer at the WSJ, joins us for how Novavax turned its company around to make and effective Covid vaccine.
Next, ghost kitchens or virtual restaurants have taken over America’s restaurants. The new world is search optimized and data-driven. Often these restaurants have no storefront and no place to dine-in. Instead, they can be found on food delivery apps like Uber Eats and GrubHub. Some experts say that these virtual restaurants will be a $1 trillion industry in the next ten years. At a time when restaurants are struggling due to the pandemic, this expansion can be a lifeline for many. Adam Chandler, contributor to Marker, joins us for the rise of ghost kitchens.
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Episode Transcript
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Speaker 1 (00:00):
It's Friday, February. I'm Oscar Ramirez in Los Angeles, and
this is the daily Dive. More vaccines could be approved
very soon, one from Johnson and Johnson and another from
a company called Novavax. If authorized, this vaccine could be
one of the most potent weapons against the pandemic. Early
(00:22):
data shows that it could be the first shot to
slow down asymptomatic spread and potentially provide longer lasting protection.
The other part of this story is the company itself.
Novavax was a small biotech company that has tried to
develop an approved vaccine with no success so far. Gregory Zuckerman,
special writer at The Wall Street Journal, joins us for
how Novavax turned its company around to make an effected
(00:44):
Bob vaccine. Next. Ghost kitchens, or virtual restaurants, have taken
over America's restaurant The new world is search optimized and
data driven. Often, these restaurants have no storefront and no
place to dine in. Instead, they can be found on
food delivery apps like Uber Eats and grub Hub. Some
experts say that these virtual restaurants will be a one
(01:05):
trillion dollar industry in the next ten years. At a
time when restaurants are struggling due to the pandemic. This
expansion can be a lifeline for many. Adam Chandler, contributor
to Marker, joins us for the rise of Ghost Kitchen.
It's news without the North. Let's dive in. I've been
accused of never having brought a product to market before
(01:29):
a little ol novac, it turns out, so just make
one to complish that. We have an incredible staff of
now seven people, and many of those seven other people
have brought many products to market. So it's not the company,
it's the people that bring up to market. Joining us
now is Gregory Zuckerman, special writer at the Wall Street Journal.
Thanks for joining us, Greggory. Of course, we've been talking
(01:52):
a lot about vaccines. Obviously, we have Fiser and Maderna
right now. We're hoping to get a few more approved
very soon. Johnson and Johnson is coming up. We're also
hearing very good things about Novavax, and part of this
whole story about the science and the companies behind making
these vaccines has just been so interesting to me. Obviously,
in Viiser and Maderna their vaccines, that technology had never
(02:15):
been proven before, and now those are the two that
we have approved here in the United States for Novovas.
They had such a roller coaster of a business history.
People called them at one point the little company that
couldn't because they never really produced the vaccine, but they
were trying so hard in a bunch of different avenues.
But now they're on on board and they could be
(02:35):
approved very soon. Their vaccine has some potential benefits that
others don't, and it's just an interesting story overall. So
Greg tell us a little bit more about Novavax, their
vaccine and their company. They're a little company outside Washington,
d C. And when you think about this whole period,
it's just shocked us in so many ways. How we've
(02:56):
paneled it. The companies have come to the rescue, and
there's really no one more surprised. And then this company,
Novavact I'm talking about the beginning of two thousand twenty.
They had about six months of cash left and they
were going to go out of business, and their employees
where they had one foot out the door, they were
looking for jobs. Stock was at four dollars of share,
it was under four dollars of share, So there really
(03:17):
was nobody less likely to come up with a vaccine
to save us. As this company, Novavac, they tried and
tried for years. At one point their only product was
this product cream for hot flashes for post menopauzzle women,
and even that thing did itself. So it was kind
of a loser company that had tried and tried and
failed and failed. And yet it's a real attribute to
(03:40):
the scientists there under the radar. They were plugging along
and making tweaks and improving this vaccine strategy they have
and lo and behold there like early next last year,
they're like, you know what, we think we have a
shot at coming out with a vaccine, and they succeeded.
It's not approved yet, but in the next few weeks
that likely will be tell us about their vaccine platform
(04:00):
because it's different from the m RNA one that we've
been hearing about. How does theirs work? So this one
is a little bit more traditional, not exactly the kind
of vaccine we all think of historically, which is sort
of you get the real virus and you, as they say,
kill it or water it down. It's not like that.
But it's called a protein subunit, which is basically they
(04:21):
create the spike protein outside the body in a lab.
It's actually using believe it or not, cells from insects
originally there with these army worms are called and they
use a virus that's actually a virus that affects animals
and affects insects, and they create that in the lab.
They create the spike protein in the lab and they
put it together with this adjument which is just sort
(04:42):
of like this substance that boosts the immune reaction to
the body. They put it together and they put it
in the vaccine and they put it in your arm
and basically it sends the spike protein into the arm
as opposed to, like you said, the m RNA, which
is a code which gives you instructions the body and auctions. Hey,
go create the spike protein the no VACS vaccine. It's
(05:04):
already been created shooting in your arm. And there's some people,
some scientists I will talk to, who believe it's it's
maybe the most durable of the ball and it's one
they want to take. So again, it's kind of diggy, unlikely.
Company may have, it's not clear yet may have the
best vaccine of the mall. I do love the kind
of history of the company the business history of the company,
because you know if they do have a successful when
(05:26):
this will be their very first successful thing. Basically, you know,
they were working on vaccines for HIV, stars mers, ebola,
the flu. Everything either didn't pan out in clinical trials
or whatever. The epidemic that they were working for, those
kind of EBB downs, so maybe their vaccine wasn't needed anymore.
Obviously the need is paramount with COVID nineteen, so it's
(05:49):
still here. But tell us a little bit more about
their ups and downs they I mean, they were their
shares were only a few cents at one point. Now
they're doing great. They were kicked off Wall Street of
the nas deck market at one point, so this is
really a comeback story for them as well. Yeah, it's
also a story about persistence and resilience and we um
(06:09):
I kind of focus on the aha moments and the
scientists and the breakthrough moments, but a lot of science
is just sort of slowly improving over the years. Whatever
you're working on and learning, just learning about viruses, learning
about approaches and tweaking things, and we don't give enough credits.
It's sort of like the long flawed the process and
(06:29):
it takes years and years, and these guys, they were
kind of seen as a loser company and they kept failing.
But when it comes to at least the biotech world,
you can fail with a drug or a vaccine and
still have some pretty good ideas that just some reason
it just didn't go right, and um, maybe the virus
dried up there like a Bowler merger or something where
you know you're working on and and it's not needed
(06:50):
by the time you put it together, or it just
doesn't meet the endpoint by a little bit. There are
all kinds of reasons why you can fail. And you know,
some of us on the outside see this company and
it's training at three dollars and they've never succeeded in anything,
and we dismiss it. There are a lot of people
a year ago who are just sort of mocking Novovacs
and who are these people to get money from the government,
because they've got billions from the government and from others,
(07:12):
from nonprofits, from the Gates Foundation, and people literally wrote stories, well,
there's got to be something nefarious going on, because who
are these people Novovaks to actually get money in support?
But sometimes they're serious scientists who just haven't had success,
but they are diligent and serious and they're making improvements
and it's a story about just resilience. I think there's
(07:34):
still a lot of difficulties coming up. You know, production
of the doses of vaccine will be difficult. I think
they had a factory that they had to end up
getting rid of at one point, so they had to
push back some things. You know, their clinical trials, things
have been pushed back because of these complexities. But they
have to get that in order to get approved, and
these are the next steps for them. They're not out
of the woods just yet. It hasn't yet been okayed
(07:56):
by the regulators, and they still have to produce a
lot of They've got agreement some place to manufacture them.
So it's still not clear yet though whether they've hit
their home run, but they're close and it is a testament.
It's a fascinating thing that the biggest pharmaceutical companies that
you would have expected to have saved us from this pandemic,
Companies like Mark who will produced the most vaccines. They
are the vaccine expert g sk All kinds of big companies.
(08:19):
They weren't there for us for various reasons. They either
tried and failed or they just weren't as focused on
on coronavirus. And yet it was like these unlikely characters
that that stepped up and getting us out as pandemic culturally.
Gregory Zuckerman, Special writer at The Wall Street Journal, thank
you very much for joining us. Great to be here.
(08:46):
If you open up any of your delivery apps and
see what restaurants are around you, you're gonna see a
lot of a lot of options that you've never heard
of before that are secretly or not so secretly being
run by restaurants that you may otherwise order from on
a regular day. Joining us now is Adam Chandler, author
of Drive Through Dreams, journalists based in New York and
contributor to Marker. Thanks for joining us, Adam, Thanks for
(09:09):
having me. I wanted to talk about a very interesting
thing that's been developing for a while, kind of accelerated
through the pandemic and looks like it could be an
important part of the future of the restaurant industry. And
we've talked about this before. Ghost kitchens, virtual kitchens, cloud kitchens.
It's got a lot of different names, but basically these
(09:29):
are kitchens and and so called restaurants that are popping up.
They don't really have a storefront. You can't go dine there,
but they're doing delivery, so you can find them on
door Dash, Uber Eats, grub Hub, things like that, and
they're catered specifically to the demands of the community there.
There's a lot of stuff that goes into this, and
(09:49):
it seems to be an increasing part of the restaurant
industry in the future of it. So tell us a
little bit more about this, Adam. It's an interesting development
for sure. What what dining has undergone the last few
years has been a real move away from in person dining,
like going into a store and being weighted on has
been replaced kind of in this Netflix and chill era.
(10:12):
And so what we've been seeing is people are ordering
out more, people are getting office catering more back when
we were going to our offices, and people prefer take
out to being out in the world, and so businesses
have invested a lot of money in creating an infrastructure
to cater to people who aren't going to go inside
and dine anymore. And obviously during the pandemic that's accelerated rapidly.
(10:37):
It's interesting that the really the only growth that has
happened in restaurants has been in food consumed away from restaurants. Obviously,
the pandemic accelerated all that stuff you made mention in
the article. It's kind of like if the US population
started ordering exclusively online dinner last year. That's not the
only piece alone. You know, there's small mom and pops
(10:58):
that are doing this. There's big chains like Applebee's that
are doing ghost kitchens. Restaurants are expanding, playing with the
possibility of different menus. There's a lot of different avenues
for available to restaurants. It's a surprising trend in that
it's so unexpected that this very personal and very transparent
(11:19):
food system that we've kind of been obsessed with. We've
been obsessed with being able to see when we go
to say Chipotle, our orders kind of made in front
of us and just have a kitchen visible. That's been
a big trend in food in the last ten years.
And now what we're seeing is that restaurants are moving
more I guess away from that in uh launching these
brands that don't really have any storefront presence and just
(11:42):
kind of exist online only, and it's a surprise. If
you really look into it, if you open up any
of your delivery apps and see what restaurants are around you,
you're gonna see a lot of a lot of options
that you've never heard of before, that are secretly or
not so secretly being run by restaurants that you may
otherwise order from on a regular day. Yeah, and as
you mentioned in the article, a lot of chicken wings. Well,
(12:04):
we'll get into that in just a moment. You mentioned
Chipotle they opened their very first ghost kitchen in New
York and you went out to go check it out.
How is that experience? Well, you know, it was a
funny trip north of New York City for about to
an hour to go to the ghost kitchen Chipotle. It
looks exactly like any other Chipotle, except nobody's dining inside
(12:25):
of it. So it's for a third party delivery platform
drivers to pick up orders and deliver them. It's for
catering orders to kind of enter a separate entrance and
pick up a huge order to go, and then it's
for people who are just passing by and ordered on
their apps. It doesn't accept cash. You can't order in
the store and you can't eat in the store, and
that's kind of what's surreal about it is that it's
(12:47):
the entire Chipotle experienced about eating inside of a Chipotle,
which you know it has always been its own kind
of special thing. It's very crowded in there. You go
through the line and you pick out exactly what you want,
so really is a diversion from their normal standard operating orders.
Let's talk about costs when things like this happened, because
opening a restaurant is expensive. We we've heard the stories,
(13:09):
we know that it's very expensive. But to do something
like this, a digital kitchen, a virtual restaurant, it's a
fraction of the cost, really. And let's say you already
have an existing kitchen, if you're you know, one of
these restaurants like an Applebe's or something, and maybe you're
branching off into something else. I mean, the cost of
opening a digital kitchen at that point is even less.
That's exactly why it's such an attractive proposition, is that
(13:32):
if you already have kitchen space and during off hours
or certain days of the week, you're not seeing huge
rush of people coming in to dine. And this has
happened a lot in the last two years. There's a
great opportunity in having your kitchen serve as another virtual
brand that generates profit by offering things that people want
(13:54):
to order and have delivered to their houses. Now, one
of the as I keep mentioning, you know, there's a
lot of bigger businesses that are getting on this train.
We heard last year about a place called Pasquale's Pizza
and Wings, only to realize that it ended up being
Chucky Cheese that was send selling out pizza and wings.
(14:14):
That was a pretty funny one. I mentioned Applebee's already
they're getting in on this game. I saw a story
just today, Guy Fieri is opening up a hundred Flavor
Town kitchens. He's calling them, you know, all across the country. Uh,
to get in on this virtual kitchen craze. One of
the other things that you did too was looking into
you know, you opened your apps and kind of did
some sleuthing just to see how many virtual kitchens they
(14:37):
might be out there. And there are a few telltale
signs of these virtual kitchens. As I mentioned, there was
a lot of chicken wings that you ended up noticing, right.
I know that chicken wings are a really popular ghost
kitchen concept because they don't really require a lot of
space in a kitchen. Um, you know, they're very popular.
They have high profit margins, and it's pretty easy to
(14:57):
transport buffalo wings in a you know, in a to
go container. It's not it's not a really delicate dish
that requires a lot of finesse. So that's one thing
about if that makes it popular. And so I decided
to open my seamless app and just look for wings.
And when I when I did that, I saw a
lot of listings around me in New York that were
(15:19):
a ton of places that I had never seen before
out in my neighborhood around me, And by looking at
their address, I could kind of sleep out which restaurants
were serving these wings. So one of them was in Applebee's.
One of them was a local diner that I go
to around the corner for me that has ventured into
(15:40):
a side hustle of serving wings. Another was a tavern
that probably doesn't have a lot of in person business
right now that's looking for a way to survive during
the pandemic. And then another one which I ended up
ordering from was Nathan Famous, which is the hot dog
chain that everyone knows from Coney Island. Uh has had
(16:01):
Wins on their menu for a long time, but decided
to spin off into another brand that serves out of
the exact same kitchen and deliver Sticken Wings. You know,
we're getting a lot of data from grub hub, ubert Eats,
all all the the ordering apps and everything that we
you know, sign over our data to obviously, but you know,
(16:21):
they're able to kind of pinpoint what the community wants
at that moment. If a neighborhood a couple of cities
very close to each other and keep looking for burritos,
let's say, well, they can then go to a company,
they can go to a restaurateurs somebody, Hey, maybe you
might want to think about opening a virtual kitchen that
just does specialty burritos because everybody is going to want
(16:44):
these in your area. Right. It's a full proof way
to kind of game the system using data, and it's
it's you know, it seems a little sinister, and it
feels a little sinister to some other people might think
of it as just a smart business. But the fact
that your data is kind of being used in this
way is effective for better and for worse. It's really
(17:06):
compelling to think if you are somebody who is looking
for vegan food or have a strict diet that needs
something specific, and enough people in your area are are
looking for vegan food, that might actually lead to the
development of an option in your neighborhood. If um, there
are enough people around you searching for something in the
(17:26):
right apps and someone minds the data properly and decides
to approach a kitchen that maybe doing something else and say, look,
there are a lot of people in your in your
zip code who have an interest in vegan food. Why
don't you open up a spinoff and see how it goes.
And it's proven to be smart. Specifically, Uber, their founder
(17:47):
has spent a hundred and thirty million dollars in the
past couple of years getting spaces to set up these
ghost kitchens. They have a startup. I guess it's called
cloud kitchens. They can even create their own restaurants just
hire a little bit of staf happened, you know, they're
just making more money for themselves. It's totally interesting the
way that happens. So the last thing I want to
ask you about is, well, what is the future of
(18:08):
these ghost kitchens? Now we're talking about how this trend
is just picking up so much. And I love the
line in your article Culinary innovation and experimentation ahead will
be digital. We're going to use all this data point
to what the community wants, and then you know, you're
off to the racist to develop the food for it exactly.
It really does kind of change the experience that we
(18:30):
know of. When you think about restaurants, you think about
the passing down of traditions, Um, what really someone is
passionate about cooking, maybe something they grew up with, maybe
something that they've developed over time, And it kind of
inverts that by saying, we already know what everyone in
your general vicinity wants to eat, why don't you just
make that. It really is turning what is kind of
(18:52):
a passion project into something that is kind of a
strictly business grab. And that's for some people. That's a
really smart way to take the risk out of a
really risky business. And that's kind of what ghost kitchens
come down to. Running restaurants is difficult. The real estate,
the labor costs, there's a lot of risk involved, and
so by taking the risk out of this, we may
(19:12):
actually be creating a more sustainable restaurant. It's just the
question of, you know, whether that's ultimately what we want.
Adam Chandler, author of Drive Through Dreams, journalists based in
New York, and contributors to Mark Or thank you very
much for joining us. Thanks for having me. That's it
(19:35):
for today. Join us on social media at Daily Dive
pot on both Twitter and Instagram. Leave us a comment,
give us a rating, and tell us the stories that
you're interested in. Follow us on I Heart Radio, or
subscribe wherever you get your podcast. This episode of The
Daily Divers produced by Victor Right and engineered by Tony Sartino.
Hi'm Oscar Ramirez and this was your Daily Dive Fast
It's Friday, February. I'm Oscar Ramirez in Los Angeles, and
this is the daily Dive. More vaccines could be approved
very soon, one from Johnson and Johnson and another from
a company called Novavax. If authorized, this vaccine could be
one of the most potent weapons against the pandemic. Early
(00:22):
data shows that it could be the first shot to
slow down asymptomatic spread and potentially provide longer lasting protection.
The other part of this story is the company itself.
Novavax was a small biotech company that has tried to
develop an approved vaccine with no success so far. Gregory Zuckerman,
special writer at The Wall Street Journal, joins us for
how Novavax turned its company around to make an effected
(00:44):
Bob vaccine. Next. Ghost kitchens, or virtual restaurants, have taken
over America's restaurant The new world is search optimized and
data driven. Often, these restaurants have no storefront and no
place to dine in. Instead, they can be found on
food delivery apps like Uber Eats and grub Hub. Some
experts say that these virtual restaurants will be a one
(01:05):
trillion dollar industry in the next ten years. At a
time when restaurants are struggling due to the pandemic. This
expansion can be a lifeline for many. Adam Chandler, contributor
to Marker, joins us for the rise of Ghost Kitchen.
It's news without the North. Let's dive in. I've been
accused of never having brought a product to market before
(01:29):
a little ol novac, it turns out, so just make
one to complish that. We have an incredible staff of
now seven people, and many of those seven other people
have brought many products to market. So it's not the company,
it's the people that bring up to market. Joining us
now is Gregory Zuckerman, special writer at the Wall Street Journal.
Thanks for joining us, Greggory. Of course, we've been talking
(01:52):
a lot about vaccines. Obviously, we have Fiser and Maderna
right now. We're hoping to get a few more approved
very soon. Johnson and Johnson is coming up. We're also
hearing very good things about Novavax, and part of this
whole story about the science and the companies behind making
these vaccines has just been so interesting to me. Obviously,
in Viiser and Maderna their vaccines, that technology had never
(02:15):
been proven before, and now those are the two that
we have approved here in the United States for Novovas.
They had such a roller coaster of a business history.
People called them at one point the little company that
couldn't because they never really produced the vaccine, but they
were trying so hard in a bunch of different avenues.
But now they're on on board and they could be
(02:35):
approved very soon. Their vaccine has some potential benefits that
others don't, and it's just an interesting story overall. So
Greg tell us a little bit more about Novavax, their
vaccine and their company. They're a little company outside Washington,
d C. And when you think about this whole period,
it's just shocked us in so many ways. How we've
(02:56):
paneled it. The companies have come to the rescue, and
there's really no one more surprised. And then this company,
Novavact I'm talking about the beginning of two thousand twenty.
They had about six months of cash left and they
were going to go out of business, and their employees
where they had one foot out the door, they were
looking for jobs. Stock was at four dollars of share,
it was under four dollars of share, So there really
(03:17):
was nobody less likely to come up with a vaccine
to save us. As this company, Novavac, they tried and
tried for years. At one point their only product was
this product cream for hot flashes for post menopauzzle women,
and even that thing did itself. So it was kind
of a loser company that had tried and tried and
failed and failed. And yet it's a real attribute to
(03:40):
the scientists there under the radar. They were plugging along
and making tweaks and improving this vaccine strategy they have
and lo and behold there like early next last year,
they're like, you know what, we think we have a
shot at coming out with a vaccine, and they succeeded.
It's not approved yet, but in the next few weeks
that likely will be tell us about their vaccine platform
(04:00):
because it's different from the m RNA one that we've
been hearing about. How does theirs work? So this one
is a little bit more traditional, not exactly the kind
of vaccine we all think of historically, which is sort
of you get the real virus and you, as they say,
kill it or water it down. It's not like that.
But it's called a protein subunit, which is basically they
(04:21):
create the spike protein outside the body in a lab.
It's actually using believe it or not, cells from insects
originally there with these army worms are called and they
use a virus that's actually a virus that affects animals
and affects insects, and they create that in the lab.
They create the spike protein in the lab and they
put it together with this adjument which is just sort
(04:42):
of like this substance that boosts the immune reaction to
the body. They put it together and they put it
in the vaccine and they put it in your arm
and basically it sends the spike protein into the arm
as opposed to, like you said, the m RNA, which
is a code which gives you instructions the body and auctions. Hey,
go create the spike protein the no VACS vaccine. It's
(05:04):
already been created shooting in your arm. And there's some people,
some scientists I will talk to, who believe it's it's
maybe the most durable of the ball and it's one
they want to take. So again, it's kind of diggy, unlikely.
Company may have, it's not clear yet may have the
best vaccine of the mall. I do love the kind
of history of the company the business history of the company,
because you know if they do have a successful when
(05:26):
this will be their very first successful thing. Basically, you know,
they were working on vaccines for HIV, stars mers, ebola,
the flu. Everything either didn't pan out in clinical trials
or whatever. The epidemic that they were working for, those
kind of EBB downs, so maybe their vaccine wasn't needed anymore.
Obviously the need is paramount with COVID nineteen, so it's
(05:49):
still here. But tell us a little bit more about
their ups and downs they I mean, they were their
shares were only a few cents at one point. Now
they're doing great. They were kicked off Wall Street of
the nas deck market at one point, so this is
really a comeback story for them as well. Yeah, it's
also a story about persistence and resilience and we um
(06:09):
I kind of focus on the aha moments and the
scientists and the breakthrough moments, but a lot of science
is just sort of slowly improving over the years. Whatever
you're working on and learning, just learning about viruses, learning
about approaches and tweaking things, and we don't give enough credits.
It's sort of like the long flawed the process and
(06:29):
it takes years and years, and these guys, they were
kind of seen as a loser company and they kept failing.
But when it comes to at least the biotech world,
you can fail with a drug or a vaccine and
still have some pretty good ideas that just some reason
it just didn't go right, and um, maybe the virus
dried up there like a Bowler merger or something where
you know you're working on and and it's not needed
(06:50):
by the time you put it together, or it just
doesn't meet the endpoint by a little bit. There are
all kinds of reasons why you can fail. And you know,
some of us on the outside see this company and
it's training at three dollars and they've never succeeded in anything,
and we dismiss it. There are a lot of people
a year ago who are just sort of mocking Novovacs
and who are these people to get money from the government,
because they've got billions from the government and from others,
(07:12):
from nonprofits, from the Gates Foundation, and people literally wrote stories, well,
there's got to be something nefarious going on, because who
are these people Novovaks to actually get money in support?
But sometimes they're serious scientists who just haven't had success,
but they are diligent and serious and they're making improvements
and it's a story about just resilience. I think there's
(07:34):
still a lot of difficulties coming up. You know, production
of the doses of vaccine will be difficult. I think
they had a factory that they had to end up
getting rid of at one point, so they had to
push back some things. You know, their clinical trials, things
have been pushed back because of these complexities. But they
have to get that in order to get approved, and
these are the next steps for them. They're not out
of the woods just yet. It hasn't yet been okayed
(07:56):
by the regulators, and they still have to produce a
lot of They've got agreement some place to manufacture them.
So it's still not clear yet though whether they've hit
their home run, but they're close and it is a testament.
It's a fascinating thing that the biggest pharmaceutical companies that
you would have expected to have saved us from this pandemic,
Companies like Mark who will produced the most vaccines. They
are the vaccine expert g sk All kinds of big companies.
(08:19):
They weren't there for us for various reasons. They either
tried and failed or they just weren't as focused on
on coronavirus. And yet it was like these unlikely characters
that that stepped up and getting us out as pandemic culturally.
Gregory Zuckerman, Special writer at The Wall Street Journal, thank
you very much for joining us. Great to be here.
(08:46):
If you open up any of your delivery apps and
see what restaurants are around you, you're gonna see a
lot of a lot of options that you've never heard
of before that are secretly or not so secretly being
run by restaurants that you may otherwise order from on
a regular day. Joining us now is Adam Chandler, author
of Drive Through Dreams, journalists based in New York and
contributor to Marker. Thanks for joining us, Adam, Thanks for
(09:09):
having me. I wanted to talk about a very interesting
thing that's been developing for a while, kind of accelerated
through the pandemic and looks like it could be an
important part of the future of the restaurant industry. And
we've talked about this before. Ghost kitchens, virtual kitchens, cloud kitchens.
It's got a lot of different names, but basically these
(09:29):
are kitchens and and so called restaurants that are popping up.
They don't really have a storefront. You can't go dine there,
but they're doing delivery, so you can find them on
door Dash, Uber Eats, grub Hub, things like that, and
they're catered specifically to the demands of the community there.
There's a lot of stuff that goes into this, and
(09:49):
it seems to be an increasing part of the restaurant
industry in the future of it. So tell us a
little bit more about this, Adam. It's an interesting development
for sure. What what dining has undergone the last few
years has been a real move away from in person dining,
like going into a store and being weighted on has
been replaced kind of in this Netflix and chill era.
(10:12):
And so what we've been seeing is people are ordering
out more, people are getting office catering more back when
we were going to our offices, and people prefer take
out to being out in the world, and so businesses
have invested a lot of money in creating an infrastructure
to cater to people who aren't going to go inside
and dine anymore. And obviously during the pandemic that's accelerated rapidly.
(10:37):
It's interesting that the really the only growth that has
happened in restaurants has been in food consumed away from restaurants. Obviously,
the pandemic accelerated all that stuff you made mention in
the article. It's kind of like if the US population
started ordering exclusively online dinner last year. That's not the
only piece alone. You know, there's small mom and pops
(10:58):
that are doing this. There's big chains like Applebee's that
are doing ghost kitchens. Restaurants are expanding, playing with the
possibility of different menus. There's a lot of different avenues
for available to restaurants. It's a surprising trend in that
it's so unexpected that this very personal and very transparent
(11:19):
food system that we've kind of been obsessed with. We've
been obsessed with being able to see when we go
to say Chipotle, our orders kind of made in front
of us and just have a kitchen visible. That's been
a big trend in food in the last ten years.
And now what we're seeing is that restaurants are moving
more I guess away from that in uh launching these
brands that don't really have any storefront presence and just
(11:42):
kind of exist online only, and it's a surprise. If
you really look into it, if you open up any
of your delivery apps and see what restaurants are around you,
you're gonna see a lot of a lot of options
that you've never heard of before, that are secretly or
not so secretly being run by restaurants that you may
otherwise order from on a regular day. Yeah, and as
you mentioned in the article, a lot of chicken wings. Well,
(12:04):
we'll get into that in just a moment. You mentioned
Chipotle they opened their very first ghost kitchen in New
York and you went out to go check it out.
How is that experience? Well, you know, it was a
funny trip north of New York City for about to
an hour to go to the ghost kitchen Chipotle. It
looks exactly like any other Chipotle, except nobody's dining inside
(12:25):
of it. So it's for a third party delivery platform
drivers to pick up orders and deliver them. It's for
catering orders to kind of enter a separate entrance and
pick up a huge order to go, and then it's
for people who are just passing by and ordered on
their apps. It doesn't accept cash. You can't order in
the store and you can't eat in the store, and
that's kind of what's surreal about it is that it's
(12:47):
the entire Chipotle experienced about eating inside of a Chipotle,
which you know it has always been its own kind
of special thing. It's very crowded in there. You go
through the line and you pick out exactly what you want,
so really is a diversion from their normal standard operating orders.
Let's talk about costs when things like this happened, because
opening a restaurant is expensive. We we've heard the stories,
(13:09):
we know that it's very expensive. But to do something
like this, a digital kitchen, a virtual restaurant, it's a
fraction of the cost, really. And let's say you already
have an existing kitchen, if you're you know, one of
these restaurants like an Applebe's or something, and maybe you're
branching off into something else. I mean, the cost of
opening a digital kitchen at that point is even less.
That's exactly why it's such an attractive proposition, is that
(13:32):
if you already have kitchen space and during off hours
or certain days of the week, you're not seeing huge
rush of people coming in to dine. And this has
happened a lot in the last two years. There's a
great opportunity in having your kitchen serve as another virtual
brand that generates profit by offering things that people want
(13:54):
to order and have delivered to their houses. Now, one
of the as I keep mentioning, you know, there's a
lot of bigger businesses that are getting on this train.
We heard last year about a place called Pasquale's Pizza
and Wings, only to realize that it ended up being
Chucky Cheese that was send selling out pizza and wings.
(14:14):
That was a pretty funny one. I mentioned Applebee's already
they're getting in on this game. I saw a story
just today, Guy Fieri is opening up a hundred Flavor
Town kitchens. He's calling them, you know, all across the country. Uh,
to get in on this virtual kitchen craze. One of
the other things that you did too was looking into
you know, you opened your apps and kind of did
some sleuthing just to see how many virtual kitchens they
(14:37):
might be out there. And there are a few telltale
signs of these virtual kitchens. As I mentioned, there was
a lot of chicken wings that you ended up noticing, right.
I know that chicken wings are a really popular ghost
kitchen concept because they don't really require a lot of
space in a kitchen. Um, you know, they're very popular.
They have high profit margins, and it's pretty easy to
(14:57):
transport buffalo wings in a you know, in a to
go container. It's not it's not a really delicate dish
that requires a lot of finesse. So that's one thing
about if that makes it popular. And so I decided
to open my seamless app and just look for wings.
And when I when I did that, I saw a
lot of listings around me in New York that were
(15:19):
a ton of places that I had never seen before
out in my neighborhood around me, And by looking at
their address, I could kind of sleep out which restaurants
were serving these wings. So one of them was in Applebee's.
One of them was a local diner that I go
to around the corner for me that has ventured into
(15:40):
a side hustle of serving wings. Another was a tavern
that probably doesn't have a lot of in person business
right now that's looking for a way to survive during
the pandemic. And then another one which I ended up
ordering from was Nathan Famous, which is the hot dog
chain that everyone knows from Coney Island. Uh has had
(16:01):
Wins on their menu for a long time, but decided
to spin off into another brand that serves out of
the exact same kitchen and deliver Sticken Wings. You know,
we're getting a lot of data from grub hub, ubert Eats,
all all the the ordering apps and everything that we
you know, sign over our data to obviously, but you know,
(16:21):
they're able to kind of pinpoint what the community wants
at that moment. If a neighborhood a couple of cities
very close to each other and keep looking for burritos,
let's say, well, they can then go to a company,
they can go to a restaurateurs somebody, Hey, maybe you
might want to think about opening a virtual kitchen that
just does specialty burritos because everybody is going to want
(16:44):
these in your area. Right. It's a full proof way
to kind of game the system using data, and it's
it's you know, it seems a little sinister, and it
feels a little sinister to some other people might think
of it as just a smart business. But the fact
that your data is kind of being used in this
way is effective for better and for worse. It's really
(17:06):
compelling to think if you are somebody who is looking
for vegan food or have a strict diet that needs
something specific, and enough people in your area are are
looking for vegan food, that might actually lead to the
development of an option in your neighborhood. If um, there
are enough people around you searching for something in the
(17:26):
right apps and someone minds the data properly and decides
to approach a kitchen that maybe doing something else and say, look,
there are a lot of people in your in your
zip code who have an interest in vegan food. Why
don't you open up a spinoff and see how it goes.
And it's proven to be smart. Specifically, Uber, their founder
(17:47):
has spent a hundred and thirty million dollars in the
past couple of years getting spaces to set up these
ghost kitchens. They have a startup. I guess it's called
cloud kitchens. They can even create their own restaurants just
hire a little bit of staf happened, you know, they're
just making more money for themselves. It's totally interesting the
way that happens. So the last thing I want to
ask you about is, well, what is the future of
(18:08):
these ghost kitchens? Now we're talking about how this trend
is just picking up so much. And I love the
line in your article Culinary innovation and experimentation ahead will
be digital. We're going to use all this data point
to what the community wants, and then you know, you're
off to the racist to develop the food for it exactly.
It really does kind of change the experience that we
(18:30):
know of. When you think about restaurants, you think about
the passing down of traditions, Um, what really someone is
passionate about cooking, maybe something they grew up with, maybe
something that they've developed over time, And it kind of
inverts that by saying, we already know what everyone in
your general vicinity wants to eat, why don't you just
make that. It really is turning what is kind of
(18:52):
a passion project into something that is kind of a
strictly business grab. And that's for some people. That's a
really smart way to take the risk out of a
really risky business. And that's kind of what ghost kitchens
come down to. Running restaurants is difficult. The real estate,
the labor costs, there's a lot of risk involved, and
so by taking the risk out of this, we may
(19:12):
actually be creating a more sustainable restaurant. It's just the
question of, you know, whether that's ultimately what we want.
Adam Chandler, author of Drive Through Dreams, journalists based in
New York, and contributors to Mark Or thank you very
much for joining us. Thanks for having me. That's it
(19:35):
for today. Join us on social media at Daily Dive
pot on both Twitter and Instagram. Leave us a comment,
give us a rating, and tell us the stories that
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Daily Divers produced by Victor Right and engineered by Tony Sartino.
Hi'm Oscar Ramirez and this was your Daily Dive Fast
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