How Reef Technology Became a Major Disruptor

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In 2019, Reef Technology – formerly known as ParkJockey – was a parking facility company providing a digital solution to paper tickets for parking customers at 5,000 lots and garages across North America. Two years later, Reef has grown into one of the most recognized names in ghost kitchen technology.

Since Reef launched its virtual restaurant arm, Reef Kitchens, in late 2019, ghost kitchens have grown from a technological curiosity to a mainstay of the restaurant industry and a cheaper way to create and expand brands without the financial ties of a brick and mortar. presence.

While there are several virtual catering companies contributing to the massive growth of delivery-only restaurants, Reef has grown into one of the biggest names in the industry, using its extensive network of parking lots and garages to quickly expand a fleet. of over 5,000 ghost kitchens. “Vessels” in the nooks and crannies of large cities.

Reef started working with Milk Bar in August.

In the last quarter alone, Reef announced partnerships with six restaurant chains: Milk Bar and Wendy’s in August, the quick pizza chain 800 Degrees and Bennigan’s in September, and Del Taco and TGI Fridays in October.

With Wendy’s partnership, Reef will help open up to 700 delivery-only restaurants over the next five years in the United States, Canada and the United Kingdom, with 50 virtual restaurants to open before the end of the year. , as stated by Wendy’s CEO Todd Penegor. investors in August that the rapid service chain is “still very early in the non-traditional development journey.”

800 Degrees, meanwhile, uses a new network of ghost kitchens powered by Reef and Piestro’s automated pizza-building kiosks to expand its reach to 500 delivery points. Since it’s harder to virtually replicate wood-fired Neapolitan pizzas, both crusted and classic pizzas will be available through ghost cooking restaurants and robotic kiosks, while 800 Degrees brick and mortar restaurants will follow suit. will stick to its pizzas made using wood-fired ovens. .

800_Degrés.jpgMost recently, Reef’s partnership with TGI Fridays marks the leading global casual dining brand in the technology company’s growing portfolio. The casual dining chain is poised to launch 300 virtual restaurants internationally over the next five years, nearly half of its current portfolio of 700 restaurants. Roy Blanchette, CEO of TGI Fridays, described Reef as a “launching pad” to spread the Fridays brand to underserved markets.

But with thousands of virtual restaurants set to open under the Reef umbrella over the next few years, the question remains: how is it growing so fast?

“We don’t see ourselves as disruptors,” Alan Philips, Creative Director at Reef, told Nation’s Restaurant News. “When we partner with brands, we help that brand do what it does in the best possible way in this new world. … We have built a network of hundreds of ghost kitchens and hundreds of outlets. I don’t know of anyone who will be able to take brands and bring them to the platform and develop them in such an efficient and neighborhood-centric way.

One of the reasons Reef is growing so quickly is its ability to operate in unorthodox locations. While many virtual restaurants operate only from commissary kitchens or aft of pre-existing brick-and-mortar locations, Reef’s ships are large kitchen trailers the size of shipping containers that don’t are not bound by real estate limits. It is a hybrid of food trucks / carts and traditional restaurant operating models.

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This unique model is not without complications. Reef was recently reported by the New York City Health Department while operating in the murky area between the restaurant and the food truck / cart. Insider recently reported that Reef Technology has temporarily voluntarily suspended all operations of its ship galleys. The company was operating its kitchens – for which there is no type of New York health permit – with temporary food truck permits while in the process of securing long-term health permits for its modular kitchens. Reef’s physical locations are still active in New York City.

“Reef Kitchens operates under New York City regulations from fully licensed brick and mortar locations,” a spokesperson for Reef told Nation’s Restaurant News. “We continue to work with regulators on ways to enable our innovative model, which seeks to reinvent urban spaces in a way that improves cities and neighborhoods with modular structures. “

Although Reef claimed the company ceased operations of its modular kitchens before any reprimand from the New York City Department of Health, Insider obtained a statement from the Department of Health suggesting otherwise.

“The Department of Health has determined that several establishments operating under DBA (Doing Business As) ‘Reef Neighborhood Kitchen’ were in violation of numerous New York City health and safety requirements,” the Department of Health said. New York City in a statement, adding that the company had “agreed to cease operations” to ensure it complies with city regulations. The health ministry did not respond in press time to seek comment.

There is only one Reef Kitchen location listed in the New York City Department of Health Restaurant Inspection Ratings. Umami Burger, operated by Reef Kitchen, is listed as’ not yet classified ‘but has multiple violations of New York City health rules and regulations including’ food from an unapproved source ‘and’ personal cleanliness inadequate ”.

“Reef takes great pride in its record of serving safe food in a clean environment,” the company said in a statement. “If you look at the total score of violations received by Reef, we are a negligible fraction compared to most of the great restaurateurs in New York City. Our commitment to high standards is quite clear.

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Navigating local health service regulations is not a new operational challenge for Reef. The virtual catering business typically works with city regulators to figure out how to get around traditional permit and licensing regulations, which ignore its unique operating structure. In fact, Reef said other cities like Miami have already started working on new regulations to make room for ghost cooking containers and mobile kitchens. In New York City (as well as other markets), it was easier for the ghost kitchen business to enter the market using temporary seller licenses (which often have fewer regulations than long-term licenses. ).

Reef expects permits for its temporarily closed kitchen containers to be approved and closed locations to be operational again by the end of the year, pending any delays related to COVID-19.

Despite these growing challenges, Reef’s army of Kitchen and Mobile Kitchen Commissioners continues to grow rapidly. Calling its portfolio “an ecosystem of diversity” with room for various types of restaurant brands, Philips believes Reef is just getting started.

“I see our platform as a way for restaurateurs and brands to be as creative as possible,” he said. “We are just facilitators to help make those dreams come true. … We can scale physical businesses as well as digital businesses, like moving a brand from one location to 100 locations in less than a year. This is unheard of in the hotel industry.

So what’s next? While Philips won’t disclose upcoming partnerships, it does see independent restaurants as just as crucial to Reef’s future ecosystem as large restaurant chains with goals of more than 500 virtual locations. But as the concept of virtual restaurants continues to evolve, the definition of a virtual restaurant brand could change.

“Going forward, let’s say you sit down and watch a Netflix show and see John Favreau and Roy Choi making pizza on the screen, and you click on your screen, and then that pizza is delivered to you in 30 minutes or less. of the Reef platform, ”he said. “As market saturation intensifies, these capabilities will become real and the marriage between the world of digital and physical restoration will be extraordinary. “

Contact Joanna Fantozzi at [email protected]

Follow her on Twitter: @JoannaFantozzi

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