GRUBHUB IS LAUNCHING A VIRTUAL BRAND

As more restaurants add virtual brands to their kitchens, Grubhub is joining the scrum with a delivery-only concept of its own.

MasterChef Table was created in partnership with contestants from the long-running cooking show of the same name. It will offer a menu of familiar foods with a “MasterChef spin,” the company said, though it did not go into further detail.

Restaurants can license MasterChef Table from Grubhub and operate it as an add-on to their existing business. There’s no licensing fee, and Grubhub will cover the costs of the initial inventory, it said. It’s slated to launch nationwide in June.

The Chicago-based  company appears to the first of the big three U.S. delivery providers to offer an in-house brand as a service for restaurants.

The news was tucked into the middle of a report Grubhub published this week that revealed just how many independent restaurants have turned to virtual brands to help generate extra revenue amid the pandemic.

The report, conducted in partnership with Restaurant Business sister company Technomic, found that 41% of the 350 independent operators surveyed currently use a virtual brand, and 46% plan to add three or more such brands in the next 12 months.

Meanwhile, nearly 70% of restaurants that brought in a virtual brand during the pandemic have made it a permanent part of the business. 

The study also found that an astounding 80% of restaurants are working with a third-party delivery provider to develop virtual brands. With MasterChef Table, Grubhub wants to ease that process for restaurants by doing most of the upfront work for them. 

The company will bring its considerable data and marketing expertise to bear in supporting the brand. The menu is “data-driven” and “designed to tap into delivery trends,” according to Grubhub’s website, and restaurants that license it will get “exclusive media, marketing and PR support from Grubhub and MasterChef, including exposure on national TV.”

The prospect of a big delivery company creating its own virtual brands has long been something of a specter for restaurants. Because the companies own the data and marketing channels within their apps, there is concern that they could tip the scales in favor of their own concepts, in essence competing with their own restaurant partners.

But MasterChef Table will work like any other brand on Grubhub and won’t get special treatment, said Senior Corporate Communications Associate Jenna DeMarco. The host restaurant will pay Grubhub the same commission it would on any other transaction. Restaurants can choose to pay a higher marketing commission for better placement in the app.

“The unit economics are the same,” DeMarco said. “We don’t drive who appears at the top and who doesn’t.” 

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