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Delivery service Gopuff launches its own ghost kitchens

The company focused on everyday essentials will add made-to-order food to its arsenal, marking a new phase for last-mile delivery and presenting an instant competitor for restaurants.
Gopuff delivery worker with bag
Photograph courtesy of Gopuff

Convenience-store delivery service Gopuff is getting into the restaurant business. 

The company that traffics in everyday essentials on Tuesday unveiled plans to open delivery-only kitchens inside some of its hundreds of microfulfillment centers across the country. That means customers will be able to order a made-to-order meal along with their laundry detergent, dog food, or thousands of other consumer products, all in a single delivery.

The initiative, called Gopuff Kitchen, marks a new phase in the evolving business of last-mile delivery. While Gopuff competitors such as DoorDash and Uber Eats now deliver from a variety of verticals, including restaurants, grocery stores and pharmacies, Gopuff appears to be the first to bring all of those segments under one roof. It stocks more than 3,000 products including snacks, groceries, health and beauty items, and pet supplies, and will now be running its own restaurants.

That system promises a lot of benefits for both the company and the customer: It makes delivery cheaper (Gopuff charges a flat $1.95 fee per delivery) and more efficient, and could result in larger tickets because of the variety of products for sale.

"This is only possible through our unique business model that features a network of hundreds of our own micro-fulfillment centers, and now, kitchens," said said Daniel Folkman, Gopuff’s SVP of business, in a statement. "Today’s milestone represents a new way of thinking about the Instant Needs economy and will redefine consumer expectations."

Gopuff Kitchen's menu will include pizza, chicken tenders, salads, coffee, matcha, breakfast sandwiches and more, across all dayparts. It's based on Gopuff's own recipes as well as "ingredients from local partners," the company said.

The all-electric kitchens will have no open flames, odors, propane gas or fryers, Gopuff said. They have a modular design that allow for interchangeable menus and equipment depending on the market.

With a network of more than 450 sites across the U.S. and U.K., most of which operate 24/7, Gopuff becomes an instant competitor for restaurants' off-premise business. But not all of its centers will have a kitchen, at least not right away. The company said it had delivered "hundreds of thousands" of food orders through a pilot program in 20 microfulfillment centers in Miami, Tampa, Nashville, Philadelphia, Austin, San Antonio, and Phoenix, Scottsdale, Tempe and Mesa, Ariz. It plans to open more kitchens by the end of the year.

The kitchens build upon Gopuff's acquisition of delivery-only coffee shop Bandit last year. That deal laid the groundwork for Gopuff's fresh food business and also gave it a leader in Bandit co-founder Max Crowley, who is now in charge of Gopuff Kitchen.

The Philadelphia-based company is coming off a $1.15 billion fundraise in March that brought its valuation to $8.9 billion. In May, it struck a deal with Uber Eats to allow users of that app to order items from Gopuff's inventory. Gopuff Kitchen products will not be available on Uber Eats as part of that program, a Gopuff spokesperson said.

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