What Is A Central Production Kitchen, And Why Are Restaurant Brands Increasingly Adding Them To Their Operations?

Multi-unit restaurant operators are increasingly shifting towards a business model with a central production kitchen.

It helps them expand operations while keeping food quality consistent across locations and channels, and, equally important, keeping the overhead costs in balance.

A major reason for this remarkable shift is that more and more restaurant companies are moving away from the traditional location-based business model to a brand-driven one.

The brand acts as a hub for multiple expansions and extensions, ranging from franchise outlets, delivery, takeout, virtual restaurants, dark kitchens and even retail ventures.

With these expansions, the importance of the back-of-house is growing exponentially.

The thinking used to be 70% front of the house and 30% back of the house, but now some operators are saying it should be 30% max front of the house and 70% back of the house, hence the rise of centralised kitchens.

It enables restaurant businesses to grow faster, meet customer demand and develop additional revenue streams (or replace streams that are slowing down).

If you are running a growing food business with multiple locations and you are considering centralising all, or part, of production in one hyper-specialised kitchen, then this article is for you.

This blogpost covers:

What Is A Central Kitchen?

Medium-sized companies (5–20 units) are following suit to support expansion and keep costs under control.

A central kitchen is a commercial kitchen run by multi-location restaurants or hospitality groups.

Central kitchens are used to prepare meal components or entire dishes that are then distributed to all the restaurant’s units. That’s where the meals are finished, plated, and served to the customer (or prepped for delivery).

Central kitchens are commonly referred to as central production kitchens, centralised kitchens, central production units or CPUs, commissary kitchens, or prep kitchens. In this article, we’ll use these terms interchangeably.

Initially, central production units were primarily used by institutional and large-scale catering companies such as airline and cruise companies, hospitals, schools, and military kitchens. Their goal? Improving efficiency.

Today, more and more emerging and expanding restaurant players are setting up central production units for the same reason. And not just the big chains. Medium-sized companies (5–20 units) are following suit to support their expansion and keep costs under control.

Recommended read: Restaurant Expansion Strategy: How to Grow Your Restaurant Into a Successful Food Empire

Why Emerging And Thriving Multi-Store Restaurant Brands Increasingly Turn To Central Kitchens

There are many reasons for commissary kitchens’ growing success among F&B brands with multiple locations.

“Important for us are the economies of scale and the logistical simplicity. Because we have a centralised kitchen we can order larger amounts of ingredients at better prices and have everything delivered to one location”, says Jeremy Deane, operations manager at German-based Brammibals Donuts.

“It also concentrates our labour. There are less and less highly skilled confectioners and bakers, so having them all work in one location results in less labour overall.”

Here are the main benefits you should know.

Restaurant teams and franchisees can focus more on the guest experience.

Reduced overhead costs and increased profits

Most multi-property restaurants start looking into prep kitchens because they enable them to save on overhead and increase profit — the ultimate goal of any F&B operator.

Consolidating your kitchens into one central kitchen space can indeed slice your overhead costs, like salaries and wages, commercial rent, and operating costs.

Tobi Lukashek of Rocket Restaurants agrees: “Prep and par-cooking in batch comes with the advantages of streamlining various in-store operations to allow our restaurant teams and franchisees to focus even stronger on what is guest-facing hospitality and guest experience. Not least commercially too, a central production kitchen can make a lot of sense towards consolidating overheads and driving productivity.”

By setting up a CPU, your restaurant outlets will need to employ fewer kitchen staff because most of your food production will happen in the CPU. That also means you will have fewer raw product orders in each separate unit, allowing you to leverage better bulk prices for your large-batch central kitchen orders.

You can also save significantly on training and labour costs by moving your food prep away from your restaurant kitchens. Instead, you only need to hire and train skilled chefs for your central production kitchen.

Additionally, you’ll need to invest less in specialised kitchen equipment at your restaurant sites. Also, you’ll be able to rent (future) commercial properties at cheaper rates because they need less kitchen and storage space.

Better product consistency

Multi-unit F&B brands looking to scale their business use centralised kitchens to boost brand consistency across locations.

Consistency is a pillar of any successful brand with multiple units, and it is especially crucial for franchisors that want to build a sustainable restaurant franchise.

“A key driver for deciding to invest into a central production kitchen was to support our franchisees and our corporate stores with even greater produce, product & recipe consistently — by way of outsourcing some prep and detail heavy processes into one central location”, says Tobi Lukashek of Rocket Restaurants.

While extensive training programs and recipe sharing are essential to improving brand consistency throughout your restaurants, preparing food in a CPU is a sure-fire way to guarantee consistency of your end-product.

High-volume production rates

While commercial property rental rates are high, properties typically come with limited on-site kitchen space that is often too small to meet increased production demand. This limitation can prevent your brand from expanding and reaching its full potential.

That’s where central kitchens come into play. You can design your prep kitchen to suit high-volume production and grow your operation efficiently.

Ultra-efficient kitchen operations

Commissary kitchens allow multi-location brands to turn their kitchen into a hyper-efficient production unit.

Here are some back-of-house operations that benefit from greater efficiency when running a central kitchen:

  • By centralising purchasing into your CPU, you can order food and supplies in large batches, increasing your restaurant’s purchasing power.

Faster scaling

Efficient SOPs, lean HR processes, and trimmed training programs are some of the benefits of running a central kitchen. In addition, the need for fewer specialised chefs and the use of cloud-based central kitchen tech accessible to everyone turns new restaurant locations into plug-and-play units, enabling your brand to grow fast and intelligently.

Extra business opportunities

For Tobi Lukaschek, Business Development Manager for Irish-owned Rocket Restaurants, the central production kitchen is “the logical next step to expand our vertical integration and increase our businesses’ self-sufficiently”, he says, “as the CPU works complimentary with our already existing verticals of restaurants, off-premises food delivery, branded retail products and our own central distribution hub with a fleet of drivers & vans supplying our stores nationwide with produce and products.”

Moving the bulk of food production to a CPU enables opportunities to amplify your restaurant brand’s reach across multiple verticals, such as catering, retail collaborations and host kitchen partnerships.

Let’s look at some in more detail.

Catering

With your central kitchen producing high volumes of consistent food components and dishes, why not extend your operations beyond your restaurant locations? Like the Belgian multi-unit spaghetti restaurant BAVET.

Peter Van Praet, founder & concept guardian at BAVET: “Our production unit is an independent company run by its own manager. It focuses on the preparation of sauces and ready-made meals. 35% of the production goes to the BAVET stores, while the rest is exported to external companies. With a production of 15 tonnes per week, the production company is quite a substantial operation in itself.”

Retail

Developing and executing your signature dishes or components to perfection allows you to branch out more quickly and sell your products in retail outlets, making your brand more visible to different customer segments. Rocket Restaurants, for example, has a range of signature sauces available in supermarkets.

Host kitchens

Being a host kitchen is another opportunity for multi-property central kitchen owners.

Suppose you’re not using your CPU’s full potential (because your dinner services are much slower than lunch, for example). In that case, it becomes interesting to invest in a virtual brand franchise. This will allows your central kitchen to operate as a franchisee of the virtual brand to maximize and capitalize on kitchen downtime.

Admittedly, it’s far more likely, that you, as a central kitchen owner, are the franchisor rather than the franchisee of the virtual restaurant. The production kitchen allows you to manage supply chain and production efficiently and deliver finished or semi-finished products to your franchisees, aka the host kitchens. They only have to wait for the online order, assemble the meal and hand it over to the delivery driver.

What Tech To Invest in?

Apicbase streamlines orders with production and inventory.

Investing in central kitchen software is essential to ensure your central kitchen operations run smoothly. These software platforms integrate your restaurant’s operations with the prep kitchen, giving you a real-time overview of your entire F&B business.

Central kitchen software is your restaurant brand’s backbone, offering features that allow you to automate BOH flows and:

  • streamline internal ordering processing to eliminate mistakes;

What Is The Difference Between Ghost Kitchens, Shared Kitchens, And Central Kitchens?

Before diving into best practices for running a CPU, let’s take a step back. With so many new, and not-so-new, kitchen concepts making the headlines, it’s easy to lose track of what is what.

Ghost kitchens

A ghost kitchen, also known as a dark kitchen or cloud kitchen, is similar to a commissary kitchen. Both are highly-efficient central kitchen spaces where one or several menus are cooked.

However, the most significant difference is that ghost kitchens prepare food for delivery only. The meals they prepare are delivered directly to end consumers, not to other restaurant outlets. Operators, therefore, mainly use ghost kitchens to increase delivery volume.

Shared kitchens

Shared kitchens, on the other hand, accommodate multiple restaurant operators under one roof.

Shared kitchen providers like Karma Kitchen, CloudKitchens, and Mission Kitchen rent out commercial co-working kitchens to start-up F&B businesses or existing restaurant brands that don’t have enough kitchen space for their off-premise orders but aren’t ready (yet) to invest in a corporate dark kitchen.

Shared kitchen spaces offer a diverse range of equipment that caters to various foodservice brands’ needs. For example, some are equipped with a large communal prep area, while others have several separate cooking stations or an assembly line.

The biggest advantage of a shared kitchen is that you only pay for it when you need and use it, eliminating the need to invest in expensive kitchen equipment or commercial real estate. In addition, the shared kitchen model provides new and growing brands with an excellent opportunity to test their concept in multiple (new) markets at low risk.

Best Practices For Operating A CPU Kitchen

You can certainly benefit from opening a central production kitchen to grow your multi-location F&B brand and boost your bottom line in the process.

But if you decide to go this route, you need to ensure you run your logistics as efficiently as possible.

The central production kitchen of your restaurant brand needs to be a well-oiled machine so you can swiftly produce high volumes of food and distribute them to your outlets while maintaining high consistency and quality standards.

If you take the time to set up your central kitchen step by step, you can make sure you get things right from the start.

Produce and distribute high volumes without compromising quality.

Location, location, location

First, identify the right location for your commissary kitchen, depending on the restaurants or units you want it to serve. We recommend opening your central kitchen within a one-hour driving range from your outlets so that you can quickly deliver components, supplies, and dishes whenever needed.

Develop a central kitchen strategy

Keeping your ideal location in mind, start building a solid central kitchen plan to ensure you have everything covered to create a sustainable and well-performing CPU.

When developing your strategy, you should consider the following questions:

  • Does your expected workload justify setting up a commissary kitchen, or is it more logical to rent a shared or host kitchen first?

Kitchen layout and workflows are key

In order to fully exploit the efficiency gains of a centralised kitchen, there is no way around creating optimal workflows, and that includes designing a well-thought-out kitchen layout. What is optimal for your operation depends on the strategy your team outlined in the previous step.

To give you some guidance, we believe Stephan Leuschner’s example, TrendTalk Master at Rational AG, is a great place to start.

In his example, he views the central production kitchen in light of a hub-and-spoke ghost kitchen model but the underlying ideas are also applicable to central kitchens that support satellite kitchens in general.

Video credit RATIONAL AG #TrendTalk

Stephan Leuschner explains: “Producing a hundred portions of a particular dish is of course way more efficient than producing 10 times 10 portions. [In a CPU] workflows can be focussed on the relevant preparations to be efficient and to have high volumes produced at the same time, [which means] full loads, full utilisation of the machinery and equipment, and of course also full utilisation of the staff. This is only possible if you have planned the design of the kitchen to be optimal for the particular workflow from raw, to prep, to chill, to delivery in a clear, one-way process.”

Keep on top of maintenance and repairs

You could argue that this is a best practice for any commercial kitchen and you would be right, except that the consequence of equipment failure is much greater here. Jeremy Deane from Brammibals Donuts agrees: “Big kitchens mean more can go wrong, equipment breaks, your entire ability to generate revenue can be affected. So keeping on top of maintenance and repairs is a high priority for us. Another important challenge is solid stock management, which is why we chose Apicbase’s restaurant inventory management software.”

Central Kitchens Present Multi-Unit Restaurant Brands With Ample Opportunities

F&B brands with multiple locations can turn their kitchen operations more efficient, lean, and profitable by setting up a commissary kitchen. In addition, central kitchens offer operators business opportunities to amplify their reach in more markets.

It is important however to do your homework because the initial investment remains high. To get the most out of a central production unit, you need to develop a sustainable strategy and leverage central kitchen software to turn your CPU into a well-oiled production machine.

That’s where Apicbase comes in. Our platform monitors your outlets’ sales and stock levels, taking the guesswork out of internal orders and facilitating easy production, intake, and shipping procedures. Apicbase also allows you to generate central production plans for batch production, taking each restaurant’s orders into account.

Find Your Central Kitchen Partner

Are you ready for your restaurant business to excel and keep guests coming back for great food and experiences?

We’ll be happy to show you how Apicbase can become the software partner for your central production kitchen.

Yes, Show Me How It Works!

Originally published at https://get.apicbase.com on July 1, 2022.

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Geert Merckaert

Geert Merckaert

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I write about F&B Management Best Practices for Multi-Unit Food Businesses. My goal is to help you keep costs down, quality up and operations running smoothly.