Tag: REEF

Business Closing

Ghosted by Ghost Kitchens

In the summer of 2021, REEF Technology expanded its network of mobile ghost kitchens across Portland, adding one cluster in Montavilla along SE 82nd Avenue. The Miami-based company bet big on delivery-only food service, a decision that seemed prophetic during the pandemic. However, that early success did not last and was particularly unsustainable in Portland. Now all locations are closed, with most former sites cleared of the brand’s equipment. Only one ghost kitchen cart remains at 1133 SE 82nd Avenue. It is locked up, and the NBRHD.com website that once solicited new clients is offline.

REEF site at 1133 SE 82nd Avenue in 2021

As reported by Sophie Peel in the Willamette Week, REEF Technology recently ceased most, if not all, operations in Portland. Several years ago, the company’s business model was seen as the future of food service thanks to the popularity of app-based delivery services like Uber Eats, DoorDash, Grubhub, and Postmates. The company leveraged a nationwide network of parking lots into delivery service hubs that offered low rent and easy access. Each food cart ghost kitchen could prepare food under various brands, cutting labor costs and flooding delivery apps with an onslaught of culinary options. The December 26th cover story in the Willamette Week detailed the troubled Portland rollout by REEF Technology. That article noted that many large brands had recently severed ties with the ghost kitchen prover, including Jack in the Box, Burger King, and Popeyes. 

Ghost kitchens were not an invention of REEF Technology, nor are they likely to disappear entirely from the landscape of American dining due to this recent setback. A detailed analysis of this model will one day explain the rapid rise and fall of REEF Technology’s Neighborhood Kitchens brand. However, for now, most Portlanders selecting food for delivery will find they come from a brick-and-mortar restaurant.

By

Jacob Loeb

Internet Archive copy of nbrhd.com

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Community, Food and Drink, New Business

A Market Built for Delivery

Recently, a new market opened along SE 82nd Ave. However, it’s not designed for you to peruse their aisle or visit at all. REEF Technology opened this new location at 1133 SE 82nd Ave to host a collection of impulse-focused brands serving the growing online delivery market. These sellers advertise their products for quick local delivery through various app-based delivery services like Uber Eats, DoorDash, Grubhub, and Postmates.

Before the pandemic, Miami Florida based REEF Technology began developing their nationwide network of parking lots into delivery hubs and ghost kitchens. That business grew immensely during the pandemic, as customers moved to pick up and delivery services for their dining activities. According to the company’s website, “REEF helps property owners transform their parking assets into micro-distribution centers, in turn connecting the surrounding community with the goods and services they need.” This Montavilla location features a refrigerator trailer for ice cream and other cold packaged products. Next to that trailer is an unlabeled food cart that can provide cooked meals for a host of delivery restaurants under REEF’s NBRHD Kitchens program.

Unlike other customer-centric businesses, this location opened quietly. In late May, Portland City inspectors marked electrical permit 21-041316 as complete. It covered the installation of a new outdoor 200 amp electrical panel with service hookups for the mobile distribution center and food cart. Between the trailers, a portable toilet provides washroom facilities for the few employees working the site and the stream of gig-workers showing up to collect the outgoing deliveries.

REEF owns and operates Light Speed Market from this site, offering connivance store products exclusively through delivery apps. Other brands listed on the locations signboard are independent companies that sell directly to customers online or through regular grocery distribution. Their partnership with REEF allows them to advertise their products on delivery apps alongside local restaurants and more prominent brands. The growth of this model is an indication that it works for REEF’s partners. Less-known brands gain national exposure through the listings in delivery apps, and restaurants can launch in new locations without needing infrastructure or staff.

An environmental conservation argument could support this model as well. Micro distribution centers placed throughout a city will reduce the distance delivery drivers travel, decreasing greenhouse gasses generated by those vehicles. Additionally, shorter routes promote fossil-fuel-free delivery methods like bikes or electric scooters.

Despite the benefits, parking lot markets and unlabeled kitchens could potentially cause damages to a neighborhood. Established businesses in the area now have to compete against a brand with significantly lower costs. Rent on a shared kitchen is substantially less than staffing a dedicated restaurant. Additionally, these micro-distribution centers and ghost kitchens employ minimal staff and do not add to the vibrancy of the streetscape.

REEF has discovered a successful business model that feeds the growing appetite among customers for instant gratification with little effort. Demand may subside after the pandemic, but this type of delivery-only operation is likely here to stay unless people put away the delivery apps altogether.