As National Ghost Kitchen Companies Gain Prominence in Portland, Local Chefs Fight Back

In late February, Oregon reported its first confirmed case of COVID-19, in a Lake Oswego elementary school employee. Catherine Buford Pellegrin, a managing partner for restaurant group Chefstable’s catering company, was preparing for an event in Lake Oswego at the time, and she watched as clients canceled event after event. By March, she says, the catering company was essentially shut down. “We went into hibernation for a few months, and when we realized that the pandemic was going to be here to stay, we started exploring other options,” Buford Pellegrin says. “We thought about meal kits, which is what a lot of other catering companies were doing, but it never seemed viable. If you can spend $100 on a really great meal kit, you’re probably calling your favorite restaurant.”

As the Portland restaurant industry braced for the most challenging moment in its lifetime, one facet of that industry was faring relatively well: restaurant delivery apps, like Grubhub and DoorDash. Some delivery apps, still charging restaurants upward of 30 percent in commissions and listing some businesses without their permission, saw market shares climb upward and revenue double compared to the year before. Independent restaurants, on the other hand, were making a fraction of their usual numbers. The food businesses well suited to takeout and delivery, then, were uniquely prepared for the trials to come, and if there is one operation nimble enough to survive the nuclear winter of the coronavirus pandemic, it’s the ghost kitchen.

A ghost kitchen, also known as a cloud kitchen, is an incubator that houses a number of restaurants without traditional, front-facing brick-and-mortar locations. Located in commercial kitchens, food trucks, and trailers, a skeleton crew of food service workers serve as the kitchen staff of a number of different, online-only food businesses, which populate apps like DoorDash and Postmates. Customers place their orders and food service workers jump from sushi to fried chicken to burgers to accommodate the requests from different virtual restaurants.

Local restaurant owners, then, have been in a complicated position, competing with financially comfortable, low-overhead businesses that benefit from outside capital. Some industry members fought hard to put caps on delivery app commissions, to make the possibility of offering delivery and takeout more financially viable for struggling local businesses. But other chefs and restaurateurs looked at the industry at large, deeply aware that COVID-19 wouldn’t slink away anytime soon, and knew they had to figure out a delivery-centric business model to survive the months — and years — ahead. So, they adapted: Chefstable Catering, which had dropped from 75 employees to six, started creating its own delivery concepts, brainstormed by catering chefs. Chris Cha, the chef behind Smokin Fire Fish, landed in the kitchen of Tamale Boy so he could keep his restaurant alive, even if it was just for takeout. Countless chefs and bakers started delivery-only concepts via Instagram, dropping tavern-style pizzas or whole lasagnas on people’s doorsteps. Diane Lam, transitioning out of a long-term pop-up, began to plan out a takeout- and delivery-only second business. For them, this was fighting back: getting into the virtual restaurant business themselves.

Summer Luu / Official

Here in Portland, most people became familiar with ghost kitchens via the arrival of David Chang’s fried chicken sandwich operation, Fuku. The brand started showing up on delivery apps last April, despite no prior indication from the chain’s website that it was opening a Portland location. Some mild internet sleuthing revealed that the “locations” of these businesses were parking lots and food cart pods — locations of the “vessels” (read: food cart trailers) operated by national ghost kitchen company Reef Kitchens. Fuku had signed a contract with Reef letting the ghost kitchen sell its sandwiches. It’s similar to the licensing deals that allow places like T.J. Maxx to sell designer jeans: T.J. Maxx makes the jeans, but they bought the right to use Calvin Klein’s name on the tag.

When Reef and Fuku revealed the details of this agreement, back in April 2020, chefs and customers criticized the companies for what they saw as profiting off of a pandemic: opening a chain business during a particularly hard period for local independent restaurants. Fuku decided to pause its rollout in Portland, but Reef, which already had a significant presence in the city, stuck around. Other virtual restaurants popped up in its place, like Man vs. Fries, a California-based chain with a Reef Kitchens contract. Even local chefs, like Pok Pok’s Andy Ricker, got on board with Reef Kitchens, selling the last of his Pok Pok wings through its cloud-kitchen operation as he prepared to leave the Portland restaurant industry altogether.

To Reef spokesperson Padden Murphy, the ghost kitchen model is noble, an opportunity to reinvigorate underutilized land — parking lots — and give restaurant owners an opportunity to grow their businesses. “Reef’s vision is basically … connecting the world to your block,” Murphy said in an April interview with Eater. “How do we make sure that we actually are able to help restaurants scale?”

However, what Murphy describes as “the world” could also be termed “national names and international chains.” Reef’s contracts, while sometimes undertaken with smaller-scale restaurant workers and new business owners, often involve known entities: Rachael Ray, David Chang, and, of course, Ricker, arguably the most famous food personality to come out of Portland. Those are people uniquely positioned to nab those license contracts, which are entry-level, low-overhead opportunities to build a chain restaurant.

Chefstable Catering, on the other hand, had just a handful of chefs to pull ideas from: the bare-bones catering staff and the restaurant group chefs whose restaurants were still closed. Chefstable — known for restaurants like sandwich giant Lardo, fine dining favorite St. Jack, and Latin American steakhouse Ox — has a history of pivots starting long before it became the most overused word of 2020. Unlike restaurant groups centered around a specific chef, Chefstable is more like an incubator or financial backer: It helps chefs find real estate, offers marketing help, and provides human resources. So, if a restaurant didn’t work in a particular space, Chefstable would often flip it: P.R.E.A.M. became Associated, Superbite became Bistro Agnes, Philippe’s Bread became Dos Hermanos. It was a way to keep chefs in a space, but try out new concepts that might work better.

In 2020, however, with the catering kitchen basically out of commission, they were able to create a real-deal incubator: A place for chefs within the Chefstable network to try out restaurant concepts without the financial burden of opening a restaurant. “We started to evaluate our assets,” Buford Pellegrin says. “We have this massive kitchen setup, a 3,000-square-foot space — we could literally crank out 2,000 meals in a day — and we have all of our chefs.” From there, they came up with the idea for Chefstable Kitchen Collective, a number of delivery-only restaurants born out of the catering kitchen.

What felt like the crucial component for Buford Pellegrin and Chefstable CEO Kurt Huffman was to make sure all of the restaurant concepts really came from the chefs in the space. “It wasn’t going to be Kurt and I going, ‘Okay, we need burritos, fried chicken,’” she says. “We wanted to make sure the chefs came up with the ideas.”

Chefstable / Official

It started with Chefstable Catering chef Doug Miriello, who tried out a hot chicken concept, Charlie’s. He followed it up with a salad concept, Waldorf & Cobb. Alex Jackson, who had been running the kitchen at the restaurant within the now-empty hotel Kex, came up with a few ideas of his own: a burrito bar called Cruzer, a barbecue sandwich shop, and a vegan noodle menu. The catering company’s kitchen manager, Lucas Morales, pitched a teriyaki brand. But Buford Pellegrin has a soft spot for Abuelita Lupita, a Mexican menu that sells machetes, or long quesadillas that likely originated in Mexico City. That was a concept from Araceli Alvarez and catering chef Salvador Cristobal; he and Buford Pellegrin worked as prep cooks together when they were in their 20s. “He said, ‘Hey, what about machetes?’” she says. “I didn’t know what machetes were. We did a tasting, and I said, ‘Let’s run with this.’”

Buford Pellegrin hopes that catering returns in full swing; she already has some people scheduling weddings for the summer. But the thought is that if one of the Chefstable Kitchen Collective takeout concepts is a hit, it might land in its own restaurant down the line. “This is our chance for the next six to eight months to develop these brands, to get the food out there, establish a great following,” she says. “I think people will appreciate the fact it’s not some anonymous entity or national chain.”

That anonymity didn’t sit right with Diane Lam, the owner of 2020 breakaway hit Sunshine Noodles, either. “These ghost kitchen brands are so sterile,” she says. Lam, who previously worked as the chef de cuisine at the now-closed Revelry, was working on a bit of market research: She ordered from places like Man vs. Fries and Sunny & Fine’s Breakfast Burritos, and she noticed something missing from the experience. “On the website, it looks so good,” she says, “but when it comes to your door, it doesn’t feel like anyone is cooking it.”

If there’s one thing Lam is familiar with, it’s mastering an online persona. Once a chef de cuisine at a restaurant with its own big-name chefs in the spotlight — namely, Rachel Yang and Seif Chirchi of Seattle’s Relay Restaurant Group — Lam began to step into the limelight herself, starting her own noodle pop-up, Sunshine Noodles. Her willingness to be vulnerable online, her laid-back delivery, and her exceptional culinary voice made her a star in her own right. When Revelry closed for good, she and then-business partner David Sigal took over a bar on hiatus, Psychic, and transformed it into a completely new space. Without the financial backing of a traditional restaurant setup, Sunshine Noodles became its own brand, with an online presence and even a mascot: a cuddly cartoon tiger.

It was enough of a breakout hit that Lam decided to make the jump into a permanent restaurant. But now, as Sunshine Noodles prepares for that transition, Lam still felt antsy. Just opening a traditional brick-and-mortar restaurant didn’t feel true to the moment, or to the food experiences people are seeking at the moment. “Once the vaccine gets out there and everyone starts going back into restaurants again, how is that going to be sustainable?” Lam says. “I don’t feel like it’s going to go back to what it was 100 percent. I honestly feel like luxury dining, what it was before, tasting menus — that’s not what’s important right now. What’s important is accessibility, and dining out is the new luxury.”

So she started talking with two other people outside the industry: Nicole Chow from Nike and Sarah Khogyani at Lyft, both friends of hers. Together, they came up with a delivery-only restaurant concept: Prey + Tell, a fried chicken and rice business. The fried chicken, popularized at Sunshine Noodles, would come with a choice of sauces and an assortment of rice options to accompany them. When it launches on January 15, it’ll run as just a traditional “pandemic pivot” through March. After Sunshine Noodles is up and running, it’ll relaunch in its full form, with an online platform, Instagram live events, Twitch events, and themed merch including sauce and spice caddies. “That’s the idea we’re trying to tackle, this concept of ghost hospitality: How do we deliver this brand to our guest and have them feel fulfilled, how do we make them feel like they’re invested in what we’re doing? Because that’s why you become a regular at a restaurant,” she says. “We want to show our industry — let’s take back this opportunity that these large corporations are bleaching over.”

Brooke Jackson-Glidden / EPDX

For some, however, takeout or delivery businesses are simply an impromptu survival strategy. Jaime Soltero Jr., the owner of the local Mexican chain Tamale Boy, wasn’t planning on opening a ghost kitchen or restaurant incubator when he decided to offer chef Chris Cha kitchen space for his Hawaiian restaurant Smokin Fire Fish. Soltero met the chef while he was selling equipment, closing his Broadway restaurant in the early months of the pandemic. “I felt a good vibe with Chris,” Soltero says. “I felt bad for his situation, so I thought we’d try something out.”

Soltero ended up offering Cha a chunk of the kitchen at Tamale Boy’s North Portland location so the former restaurant owner could continue to sell his poke and plate lunches for takeout. The restaurateur started thinking through his own takeout- and delivery-only business to include in that space, specifically focused on tortas. But now, a few months into Cha’s residency at Tamale Boy, Soltero decided to scrap the torta concept. “I was thinking about the whole ghost kitchen thing, and I thought, maybe we’re a little too late in the game on this,” Soltero says. “The point of the game at this point is just to make it through with minimal damage.”

Instead, Soltero Jr. decided to get out of the pivot game. He’s now just focusing on the restaurants in front of him and getting to know Cha as a chef. Down the line, on the other side of the COVID-19 pandemic, the two of them want to open a restaurant that combines both of their cultures — dishes that incorporate Hawaiian and Mexican ingredients and techniques. “We’re figuring out if we could play together and learn something,” Soltero says. “That way, we can sprout something completely new.”