FOR IMMEDIATE RELEASE:
Friday, July 19, 2024
MEDIA CONTACT:
Bethany Khan: bkhan@culinaryunion226.org ▪ (702) 387-7088
Culinary Union launches “Ghost Kitchen Report” about Sam Nazarian’s C3 and ghost kitchen trends
Las Vegas, NV – The Culinary Union has launched a new website, GhostKitchenReport.org, covering C3, REEF Technology, TriArtisan Capital Advisors, and other companies involved with the ghost kitchen industry. The ghost kitchen industry boomed during the pandemic, but the business model and the industry’s rapid growth have posed regulatory challenges for state and local governments.
Sam Nazarian is the owner and founder of ghost kitchen brand C3, as well as SBE, which owns and operates Citizen’s Kitchen and Bar and other restaurants at Mandalay Bay Casino.
“Restaurant companies invested in ghost kitchens around the pandemic as smaller mom and pop brick-and-mortar restaurants struggled,” said Ted Pappageorge, Secretary-Treasurer for the Culinary Union. “The restaurant industry grew rapidly, but it’s hard to keep track of how quickly this industry is changing and what’s really happening. For example: Ghost kitchen company C3 said it would open 12,000 kitchens globally by 2023. Currently, there are no kitchens available on C3’s mobile ordering platform, Go by Citizens.”
State and local health officials have noted that the ghost kitchen model raises particular food safety concerns and concerns about finding violations or tracing illnesses back to shared facilities. Virtual restaurants are subject to applicable permitting and inspection requirements. The National Association of County and City Health Officials said in a statement to the Boston Globe: “But, the difficulty lies in identifying the operations.”
“There is uncertainty about how this business model fits into existing systems for regulating food and occupational safety in restaurants, and how ghost kitchen operations affect communities. Investors poured a ton of money into virtual ghost kitchens, locations started popping up, and just as quickly, began to close. The industry has undergone a lot of change in a very short time,” continued Pappageorge.
Notable events and reporting regarding ghost kitchens:
*In February 2020, Sam Nazarian’s hospitality company, SBE Entertainment Group, announced the launch of C3, a ghost kitchen venture that would “introduce to the world a revolutionary way to approach food halls, ghost kitchens and mobile delivery.” According to a July 2021 press release, C3 planned to have more than 1,000 kitchens by the end of 2021 and was on track to have 12,000 kitchens by 2023.
*According to Restaurant Dive, C3 stated that it had “over 500 digital kitchens” as of October 2023.
*C3 announced in July 2021 that “virtual restaurant” company REEF Kitchens committed to carrying C3 brands in 500 locations across the US and in November 2021, REEF issued a press release announcing that C3 and Reef had partnered “to open 800 virtual restaurants through 2025.” Commenting on the partnership, C3 CEO Nazarian said, “We are thrilled to expand our incredibly successful partnership with REEF which has helped our ecosystem of brands to flourish. As we expand our operations REEF continues to be our choice for technology, supply chain and operations.”
*In 2021, Wendy’s and REEF announced they would open 700 ghost or “delivery kitchens” globally by 2025. The next year, Wendy’s scaled that number back to 100 to 150 locations. In May 2023, the Washington Post reported that Wendy’s would close the U.S. ghost kitchen operations launched with REEF.
*In April 2023 the Virginia Mercury reported that “local and state officials are struggling to keep tabs” on Virginia ghost kitchens.
*Gary Coggins is an environmental health manager with the New River Health District, one of 35 local health districts that makes up the Virginia Department of Health. Coggins oversees restaurant inspections in the district. Only 30 of 665 food establishments in Coggins’ district are permitted as ghost kitchens but he told the Virginia Mercury that he suspects the actual number of ghost kitchens is “way underreported.” Coggins reportedly said, “Local and state officials are struggling to keep tabs on the kitchens due to the sheer amount of them popping up across the state.” The Department of Health “usually becomes aware of ghost kitchens during inspections of existing businesses or through foodborne illness complaints.”
*On February 16, 2024, CNBC reported that in 2020, market research firm Euromonitor International estimated that the ghost kitchen industry could reach a market size of $1 trillion by 2030. Deloitte restaurant food and service leader Evert Gruyaert told CNBC that there’s been a “decline in ghost kitchens” and that “[i]t is clear that the impact of ghost kitchens was overestimated."
Learn more and see updates about companies who operate ghost kitchens at: GhostKitchenReport.org.
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ABOUT CULINARY UNION:
Culinary Workers Union Local 226 and Bartenders Union Local 165, Nevada affiliates of UNITE HERE, represent 60,000 workers in Las Vegas and Reno, including at most of the casino resorts on the Las Vegas Strip and in Downtown Las Vegas. UNITE HERE represents 300,000 workers in gaming, hotel, and food service industries in North America.
The Culinary Union, through the Culinary Health Fund, is one of the largest healthcare consumers in the state. The Culinary Health Fund is sponsored by the Culinary Union and Las Vegas-area employers. It provides health insurance coverage for over 145,000 Nevadans, the Culinary Union’s members, and their dependents.
The Culinary Union is Nevada’s largest Latinx/Black/AAPI/immigrant organization with members who come from 178 countries and speak over 40 different languages. We are proud to have helped over 18,000 immigrants become American citizens and new voters since 2001 through our affiliate, The Citizenship Project.
The Culinary Union has a diverse membership which is 55% women and 60% immigrants. The demographics of Culinary Union members are approximately: 54% Latinx, 18% white, 15% Asian, 12% Black, and less than 1% Indigenous Peoples.
Culinary Union members work as: Guest room attendants, cocktail and food servers, porters, bellmen, cooks, bartenders, laundry, and kitchen workers. The Culinary Union has been fighting and winning for working families in Nevada for 89 years.
CulinaryUnion226.org / @Culinary226
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