Ghost kitchens spread across São Paulo in the pandemic

RIO DE JANEIRO, BRAZIL – In dark kitchens, or “ghost kitchens,” nothing can be bought in person. According to PROCON, consumers are running the risk of buying a “pig in a poke.”

These units operate in warehouses run by companies and typically house several kitchens, which pay rent for the space. They have become attractive in the delivery business because they manage to expand the area of operation of restaurants on apps.

A trendy diner in São Paulo that would only cater to Pinheiros (west zone), for instance, may have a “ghost kitchen” in the east zone and thereby shorten the delivery time for a hamburger in neighboring Tatuapé region. It enters the “radar” of those who live in the neighborhood far from the physical restaurant, where customers pay a high price and can even watch food being prepared.

In some cases, the owner of the popular restaurant and the dark kitchen are not even the same. The person in charge of the “ghost kitchen” pays up to 8% of revenues as royalties to use the popular restaurant’s brand. And it prepares meals in a cubicle, in a warehouse where anything from vegan to Japanese food can be cooked.

In theory, it must meet quality requirements. In practice, according to entrepreneurs and employees, this is not always the case. Consumers can pay a high price for the packaging alone.

Eight addresses that operate as dark kitchens were visited by the reporters. The city hall said that 3 were notified to regulate their situation – two of them on Cação Street in Itaim Bibi, and Fradique Coutinho Street (Pinheiros), had no license to operate. Two other sites would be inspected by the subprefectures of Sé (central region) and Mooca (east zone) in the coming days.

When advised about this activity, PROCON-SP’s executive director Fernando Capez said that it is “alarming,” because consumers have as a reference the hygiene of the restaurant and the kitchen from where they believe they are ordering. “Clearly, an abusive practice,” he says.

According to Capez, article 31 of the Consumer Defense Code is enough to understand the problem. “It must state: ‘this product is being prepared outside the establishment, under the following conditions’. If this is not done, one is selling, to use the popular expression, a pig in a poke.”

The PROCON director details what he perceives as irregularity. “I have in the place where I go, a visual identity, a reliability, where I know all hygiene and operation conditions. Suddenly, food is being supplied from a completely different address, of which I have no information regarding production, packaging, maintenance, and hygiene conditions,” he explains.

A professor at USP’s School of Public Health and a specialist in sanitary surveillance, Fernando Aith cites, among other aspects, the responsibility of those who rent these several kitchens in a single warehouse to declare what actually happens there. “[There may be] misuse of commercial purposes, which is a circumvention of state control, related to consumer protection,” he says.

Neighbors face a ‘combo’ of problems

Noise, smoke, the smell of fried food, crowds of delivery drivers, and local traffic disturbances. It is clear that a combination of so many issues would not go unnoticed by the neighbors of São Paulo’s Kitchen Central units, a company with up to 30 delivery kitchens in a single warehouse.

The detail is that the sector giant, funded by mega investors such as Venezuelan Jorge Pilo, includes in its economic activity classification “rental of own real estate” – and nothing related to food production.

Neighbors of the unit on Clélia Street, in Lapa (west zone), attended a meeting with the deputy mayor and Pilo himself to reach an agreement. Some 9 months later, the situation is still unsustainable, as reported by those who live there. “We continuously have this noise that sounds like a vacuum cleaner in our ears,” says communication advisor Mariana Paker, 39, who lives on a plot which has been in her family for over 100 years. “I can’t live in my house,” she says.

Mariana also explains that the kitchens operate until dawn. “They go until the last customer. If they want to close at 6 AM, they will go on until 6 AM. Usually, until 2 AM,” she says. The communication advisor says that problems began during the construction of the dark kitchen, when schedules were completely disrespected. “They come into the center of neighborhoods because that’s the premise for faster deliveries,” she says.

“Every day it feels like a bakery, a hamburger restaurant indoors,” says Phil Mindlin, 45, who lives in a building next to the Central Kitchen on Guararapes Street, in Brooklin (south zone). “The experts we talked to say that this is an industry,” he says. “There is no way to contain the odor and pollution from 30 kitchens. Our building is wall to wall,” he says.

Also a neighbor of the Brooklin unit, administrator Lucia Barros, 52, says that the smell is unbearable and her own dishes become greasy, but there is something even worse: “The noise is what bothers me the most. It hurts my eardrums. From Sunday to Monday, I can’t sleep. They run a kitchen that is open until 3 AM or longer. The exhaust is on all the time,” she reports. “I live on the 7th floor and I hear the bell calling for orders,” she says.

A neighbor of the unit on Acre Street, in Mooca (East Side), teacher Ruth Izzo Lorente, 66, says that the repetitive noise is disturbing, but not the only problem. “I can’t leave the window open. A greasy dust comes in and the smell is nauseating,” she says. The teacher also says that the deliverers drive on the wrong side of the road, even on sidewalks. “Drivers are on top of you and they even curse at you,” she says.

City Hall fines two warehouses in the West Zone

São Paulo City Hall said that Rappi’s Hubs, managed by Smartkitchens, located on Cação and Fradique Coutinho streets, in the region of the Pinheiros subprefecture (west zone), are not licensed to operate. “They were fined and have, respectively, 30 and 90 days for regularization,” he said in a statement. Until then they may continue to operate, because they submitted micro and small business documents (EPP).

Regarding noise, the city hall says that the establishment on Clélia Street was inspected and fined in June 2020. In relation to others, the city government says there was no denunciation. The kitchens’ health inspections are conducted individually, since each establishment is a company.

Chef Ravioli approves structure reduction

Chef Roberto Ravioli changed a structure that once employed 160 people and cost R$100,000 (US$20,000) a month in rent alone for four contractors and R$8,000 spent with rent. “I’m happy with my life,” the Chef says, and has no desire to set up a physical space again.

“A dark kitchen is a restaurant. At least mine is.” This is how Ravioli justifies the use of his “ghost kitchen” on Cação street, in Itaim Bibi (west zone). “When one logs on to Rappi, it’s the products that Roberto Ravioli has always cooked in his restaurants. That’s in my case. Others, I don’t know.”

Famous for his participation in television shows, Ravioli now sells food online, promoting dishes on social networks and on the app. For the Chef, explaining that the food does not come from one of the restaurants he used to keep open to the public is unnecessary.

“I don’t say anything. People know me. It’s very much word of mouth. People buy it, mostly frozen [food]. Some say ‘ah, Ravioli, I didn’t know it was frozen’. Well, anyway… But everything is ready, you microwave it, it’s perfect. It is all very practical,” he says.

According to Ravioli, overall customers are happy. “I don’t see that the difference is that great, particularly in my case. People say ‘it’s the same as in the restaurant’ and others, very kind, say ‘it’s even better’, which I think is an exaggeration. There is no difference,” he says.

While talking to the reporter by phone last Thursday, July 8, orders didn’t stop coming in. “Just now someone asked for capeletti in brodo. I have it there, frozen, well packed. You get home, open a bottle of wine, heat up the capeletti, and the cost is much lower.”

From a business perspective, the Chef says the experience has been valuable. “They offer the maintenance service, cleaning, grease box, locker room, security, firemen, a number of things. Within the rent I pay, it’s very rewarding,” he says.

The Chef knows that the power of word of mouth can induce the consumer to make a decision when choosing a dish. Ravioli cites how this can happen in relation to meats. “If you use “jarret”, the customer buys it. If you use “stinco”, they buy it. You write “cinnamon” on it? They don’t buy it, and it’s all the same, all the same dish. Written in French, Italian and Portuguese.”

About renting his own brands to third parties, Ravioli points out that those who venture down this path, which is not his case, need to be careful. “It’s like a franchise. You have to be there to oversee it. Someone opens a “sfiha” franchise and starts buying 200 from you and making 500 his way,” he says. “People are expanding and wanting to earn more,” he says.

Brewery becomes customer partner

Not every dark kitchen is obscure or works in a warehouse where fish and kibbeh are fried daily, for example. In Santo André (a suburb), a brewery used a large area with a kitchen to establish a partnership with a single snack chain to sell the same menu through delivery and take away.

“It is all the same, the suppliers are the same. The only thing that differs is the alcoholic beverage menu, because we only sell our own,” says marketing manager Renan Leonessa, 29. “The team spent a month in training in a unit in Ipiranga,” he adds.

According to Leonessa, for the younger generation it doesn’t matter if meals come from a dark kitchen or from the on-site restaurant. However, he says that it is necessary to preserve other people’s brands. “I can’t waver,” he says. “There are different dark kitchens. Here, it’s a real kitchen, not something amateur,” he says.

Delivery drivers’ structure is a water dispenser, a restroom, and a power outlet

It is not unusual to open an app and find over 20 restaurants within 100 meters, even if one looks around and finds nothing more than the frantic coming and going of delivery drivers in a single gray, unmarked warehouse. Eight of these have been visited in the past two weeks.

Typically, dark kitchens have a call sign and a counter where all orders prepared in the kitchens are passed through, from a candy bar to oil and garlic noodles. There are also usually outlets for delivery people to recharge their cell phones, a drinking fountain, and a restroom.

The restrooms for deliverers are a separate case. In two of them, on Fradique Coutinho Street (Pinheiros) and Paulo de Figueiredo Street (Vila Mariana), for example, there was no soap.

Around dark kitchens, the story also found many deliverers cooking their own meals sitting on the sidewalk, with no support infrastructure.

Association chairman sees it as an opportunity in the crisis

The president of the administrative council of São Paulo’s ABRASEL (Brazilian Association of Bars and Restaurants), Joaquim Saraiva, says that dark kitchens emerged as an option during the crisis triggered by the pandemic.

“It is still an opportunity, because many restaurants closed and moved into dark kitchens, working with delivery. Rents became expensive, business plummeted. We had many restrictions on closing times. Until today, we are suffering these operation restrictions,” he says.

Saraiva emphasizes that delivery can work with no time limit, which is another attraction. Costs also drop dramatically. “It starts with the rent, which is divided. You can greatly reduce the labor costs. You can save up to 30%,” he says.

Companies cite legal backing

A target of criticism, Central Kitchen said it has complied with all applicable regulations and will continue to do so. “We are committed to being a good neighbor and will continue to take reasonable steps to address any concerns that may arise,” it said in a statement.

Smartkitchens said that the “fines are misplaced, undue, and in clear disagreement with CGSIM Resolution #51 of 11/06/2019, which can be proven by the very Certificate of Membership and Registration issued by the treasury authority, which clearly and formally states the waiver of an operating license.”

Regarding the two hubs, he said that they are equipped with a support area for delivery professionals, with exclusive restrooms, drinking fountains, rest areas, and power outlets. “As the story revealed, cleaning is performed by Smartktichens’ cleaning professional, twice a day, at times before peak hours, with products such as chlorinated detergent and industrial disinfectant, and the cleaning control is performed in a form visible to all users,” it said in a statement.

“It is worthy of note that restrooms for deliverers are equipped not only with liquid soap dispensers for hand washing, but also hand sanitizer dispensers, and paper towels, all of which are replaced twice a day,” it added.

Rappi says it takes “promising establishments to new regions of the city, encouraging commercial opportunities and the culinary diversity of neighborhoods.” “By expanding the region served by its partners, the company also enhances the quality of its delivery service and the portfolio offered to users,” it said in a statement.

Rappi also says it created its operating model through the dark kitchen with the goal of maintaining quality and best practices regarding flows and processes, and is constantly reviewing and improving its protocols to better serve its entire partner ecosystem.

Uber Eats said that dark kitchens allow restaurants to focus on producing meals without worrying about tasks such as operating the lounge or controlling delivery driver schedules, for example. “This model has become even more relevant over the past year, when food companies needed to cut costs and optimize production to keep their businesses open amid an unprecedented crisis,” it said in a statement.

Those responsible for the app said that to be a partner of Uber Eats, the business must have a food business tax registration number (CNPJ) and be in accordance with the municipality’s sanitary guidelines. “Provided these criteria are met, entrepreneurs are free to create different food brands under that same CNPJ, thereby enabling the creation of multi-brand collective kitchens,” it said in a statement.

Ifood said it is always attentive to trends and discussions that may impact its ecosystem, which includes consumers, restaurants and delivery partners.

“At the moment, the company does not invest directly in the dark kitchen format, but there are registered restaurants that formerly operated only on-site and after joining the platform created exclusive delivery operations, as well as those who have already opened an operation focused on delivery,” it said in a statement.

Those responsible for the app also said that the company requires in the contract that partner establishments meet all legal requirements necessary for the operation, as established by the government.

Source: Folha