Inside New Zealand’s Ghost Kitchen Revolution: The Rise of Virtual Restaurants

You flick through Uber Eats, maybe Menulog. Order arrives. Job done.

But behind that seamless app interface, something profound is shifting in New Zealand's food scene. We're talking about 'ghost kitchens' – operations built purely for delivery, working away unseen by the dining public. They’re popping up everywhere, from Auckland's core right out to suburban spots like Papakura, maybe even making inroads in places like Timaru.

Sure, the pandemic threw fuel on the fire, but make no mistake, this shift is also driven by some pretty harsh economic truths and turbocharged by technology that’s completely changed how we all think about getting a meal.

Think about it: facing 20,000amonth for a decent Auckland restaurant lease versus maybe 5,000 for a slice of a shared ghost kitchen space (as Metro reported back in 2021) – the numbers alone tell a powerful story. As someone deep in the trenches of hospo recruitment here at Hospo HR, I see the appeal. This model promises efficiency, a way to reach customers without the crushing overheads. But I also see the complexities, the risks, and the very real human stories unfolding just out of sight.

Where it Began: a Spark in Ponsonby

This didn’t just appear out of thin air. Before 'ghost kitchen' was even a term most Kiwis knew, the pieces were falling into place. Delivery existed, yes, but Uber Eats landing in Auckland in 2017 was the real game-changer. By 2018, they were covering a massive 934 sq km footprint in the city, listing over 400 eateries and putting something like 24,000 menu items just a tap away (according to the NZ Herald).

That’s when Hot Lips made its move in 2018. Operating cannily out of the existing Ha! Poke kitchen right on Ponsonby Road, Conor and Tyler Kerlin took a calculated risk. They started selling Nashville hot chicken and cauliflower, only on Uber Eats, specifically because of Auckland’s notoriously "high cost of leases, staffing, and labor," as they told the Herald. They shared staff, shared equipment – pure hospo resourcefulness. Marisa Bidois over at the Restaurant Association called it an "exciting development" at the time, seeing exactly how it could work in high-rent zones. Hot Lips, operating under the touching name Saylor's Kitchen (for Kerlin’s late daughter), did more than just sell chicken; it showed everyone else it could be done here. Its own journey might be unclear now, but the ripple effect had begun.

Then, COVID-19 hit like a tidal wave. Lockdowns didn't just encourage delivery; they forced it. Suddenly, getting food dropped off wasn’t just handy, it was often the only option. Globally, digital ordering absolutely exploded – growing 300% faster than dine-in (as Hospitality Business noted in 2021), and NZ was right there in the thick of it. Ghost kitchens transformed from a potentially clever idea into a vital survival strategy for many. This intense period really cemented their place, making investors prick up their ears – case in point, that $12 million injection into a Christchurch-based ghost kitchen startup in 2022, aiming to build a whole suite of virtual brands (Food Ticker reported).

Inside the Engine Room

So, what does it actually look like inside one of these operations? It varies. You've got purpose-built hubs housing multiple brands under one roof. Or, you see setups like Hot Lips had, or how Epsom's One8Tea smartly runs its Loadedfriez brand – using slack time or spare space in their existing restaurant kitchen. The mantra is lean efficiency: smaller crews (maybe 5-10 people compared to 20+ for a similar traditional place, potentially slashing labour costs according to some analysts like NCR Greenhouse), slick tech systems like Oracle's Simphony POS managing the order flow, and just pushing the food out the door.

It’s common practice to run several ‘virtual restaurants’ from the one kitchen. Your sushi and your mate's burger might originate from the same set of pans, just branded differently online. Names like "Chur Burger" or "Pimp My Rice" feel almost like digital billboards – designed to catch your eye as you scroll, not necessarily build a lasting relationship.

But here’s the rub: the whole system hinges on those big delivery platforms. They give kitchens instant reach, handle the payments, sort the complex logistics – Paul Anakakul, running both At Bangkok and the virtual Arcade brand, admitted to Metro he appreciated how Uber "takes that stress away" from dealing with drivers or wrong orders.

Yet, these platforms take a hefty slice. Those commission fees – often cited between 15% and a painful 35% (Hospitality Business, 2021; Metro, 2021) – can really bite into already thin margins. David Fu from One8Tea wasn't shy about his dislike for Uber Eats' 30% exclusivity deal. It’s a constant tension – the platforms provide the oxygen, but they also charge heavily for it. It forces operators to chase volume or push prices up. Even Paul Anakakul conceded, for his business, "Dine-in is the priority," hitting pause on his virtual brand when the restaurant got busy.

Real Stories from NZ's Ghost Kitchen Scene

The promise of easy money in this space? It’s often just that – a promise. The NZ experience has already given us some stark lessons:

• Hot Lips:
  Important because it showed Kiwi ingenuity could make the model work locally.

• One8Tea's Loadedfriez:
  This is the sensible, pragmatic play we see more often. Use what you have, tap into the delivery trend, don't risk the whole farm. It’s diversification, not revolution, and apparently, it's working – still listed online in 2024.

• And then there’s Burgered.
  This Grey Lynn operation is a genuine cautionary tale for the whole industry. It had the backing (Delta Private Equity), multiple brands under its belt, and ambition to spare. Reports suggested impressive takings on peak nights – $3,000 even. But it crashed spectacularly, leaving a trail of debt and, unforgivably, unpaid staff (The Spinoff’s reporting laid it bare in 2023). What went wrong? A potent cocktail, it seems: potential overstaffing (as one chef, Taiko, bluntly put it: "The place was never busy. It was so weird. They pay you so good to do nothing."), punishing rent, and serious questions around management figures linked to past controversy. 'The initial pitch clearly felt off to some involved, like Hospitality Manager Tyrone O’Kieffe who reflected, "They were selling something that was too good to be true." The human fallout was devastating. Listen to Roberto, an experienced chef: "And on April 1, they didn’t pay us. They broke their promise to us." Chloe Ann-King from the Raise the Bar union didn’t mince words, calling the management "the most combative" she'd dealt with and the situation "massive wage theft," fearing recovering money would be tough and labelling the employers "the worst of the worst." Interestingly, accounts differed – Head Chef Adrian Managh felt manager Matt Young "was compassionate," while HR boss Gareth Needham hoped staff got "every cent," acknowledging their hard work. Meanwhile, key players like Matthew Young and Murray Osmond sought to deflect responsibility, with minor shareholder David Holland saying they’d been "kept totally out of the loop." Burgered isn't just a business failure; it's a stark warning about what can happen when hype, poor governance, and vulnerable workers collide in this new frontier.

The Ripple Effect

These hidden kitchens aren't operating in a vacuum; they're sending ripples across the entire NZ hospitality pond. On the plus side, they can bring more food choices to places often overlooked by diverse dine-in options. They offer chefs a relatively low-cost way to experiment – Hot Lips trying out Nashville chicken before it exploded locally is a perfect example. And let's not forget, during the worst of the pandemic, they were a genuine lifeline for many businesses.

But there’s a flip side, and it demands attention. That reliance on high-commission apps makes long-term profitability a constant battle. Building a real brand connection is incredibly tough when you're just a name on a list (does anyone feel loyalty to "Pimp My Rice"?). There are whispers about food consistency when there's no dining room accountability. And the Burgered disaster throws a harsh light on the potential for worker precarity – insecure jobs, pressure-cooker environments, especially impacting migrant workers. There's also that cultural question: Does the efficiency of anonymous delivery chip away at the community heart of Kiwi hospitality? Home cook Paulus Kasuma captured this sentiment perfectly when talking about his virtual Kasuma Kitchen: "I cook to see people enjoying my food, so when I can’t see them it’s… meh."

Established players wrestle with these dilemmas constantly. Renee Coulter from Coco's Cantina was refreshingly honest about their brief foray with ghost kitchen Pasta Pronto: "it was a hard call, because Uber is Uber, but it’s also a hard call being in hospitality. Everyone is hustling… the fear of having some backlash cannot outweigh what is good for the business..." It sums up the tightrope walk many operators face: balancing the books, platform power, and doing right by their brand and people.

What’s Next

Make no mistake, this isn't a passing fad. Forecasters like Statista see NZ’s online food delivery market ballooning towards US$1.91 billion by 2027, with close to two million Kiwis expected to be ordering meals online. Ghost kitchens are perfectly engineered to ride that wave. Industry watchers like Matt Newberg predict a future where dining splits – special occasion experiences in person, and everyday convenience dominated by delivery. Ghost kitchens own that convenience space.

But growth doesn't mean the road ahead is smooth. The power dynamics with delivery platforms, ensuring fair treatment for kitchen and delivery staff, building trust when you're literally invisible, maintaining food quality under pressure – these are ongoing hurdles. Our smaller NZ market also poses different scaling challenges than, say, the US or UK.

What's emerging is a fundamental shift. Ghost kitchens aren’t just changing logistics; they're testing our industry's values.

Can we embrace the efficiencies without compromising on fair work?

Can we deliver convenience without losing connection?

Can innovation thrive without exploitation?

As we look ahead, finding answers that work for operators, staff, and customers is critical. I’ve always been about supporting the talented people navigating this complex, fast-changing landscape is what drives us. These invisible kitchens should have all of us to really think about what comes next for hospitality in Aotearoa.

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About the Author
Joshua Thomas is the founder of Hospo HR, an experienced hotelier, and an advocate for New Zealand's vibrant hospitality sector. Always immersed in the latest hospitality trends, news, and updates, his passion stems from his lifelong love as a devoted foodie. Connect with Joshua and his community of hospitality professionals.