Dive Brief:

• Saladworks will open 60 ghost kitchen locations in the U.S. and 30 in Canada, nearly doubling its footprint by the end of 2021, according to a press release. 
• Most of these new kitchens, which will roll out in partnership with Ghost Kitchen Brands, will be located inside Walmart stores, where there will be some seating available. All locations will offer carryout and delivery.
• Recently Saladworks has focused much of its expansion plans through grocery stores, opening locations in Kroger, ShopRite and The Giant Company in the last two years. In August, the company also partnered with Chowbotics to open in more nontraditional locations.

Dive Insight:

The latest announcement highlights the growing interest from grocers in ghost kitchen facilities that offer omnichannel meal fulfillment. Walmart began testing ghost kitchens in Canada earlier this month with various brands, including Saladworks, Taco del Mar and The Cheesecake Factory Bakery, while Kroger opened a ghost kitchen in October as part of its partnership with ClusterTruck. Ghost kitchens can bring in multiple brands to create one-stop-shopping to attract even more guests to order pickup or delivery. 

The current strategy at Saladworks also taps into a growing trend at grocery stores of adding more robust meal options for consumers. In-store dining options have closed down, but stores have seen increased foot traffic, offering the opportunity to introduce new offerings that look beyond packaged prepared foods while also appealing to the millions of shoppers that now regularly shop online.

Walmart is also adding more full-service Saladworks locations at a time when grocers are trying to meet demand for fresh, healthful meals outside of their salad bars and other self-service stations. These departments have begun to reopen in line with local restrictions, but safety concerns could push grocers into more full-service, online and tech-enhanced options.

Saladworks' growth over the last several years comes, in part, as a result of several partnerships, including with Ghost Kitchen Brands and grocery chains. Last year, Saladworks added 40 units, including ghost kitchens, with several at nontraditional locations such as universities. An additional 90 units would bring Saladworks' store count to over 220 units. 

Ghost kitchens specifically have proven to be an "economical and highly successful expansion tactic for us," Eric Lavinder, chief development officer at parent company WOWorks, said in the press release. 

For restaurants, ghost kitchen models can increase the pace of growth because they don't require significant investments in real estate. Nathan's Famous opened its 100th ghost kitchen in February after a few months with this new model, for example. Wow Bao expects to reach 1,000 locations by the end of this year using a host kitchen model, in which brands partner with other restaurants to facilitate the delivery-only kitchens.