David Segal’s Mad Radish is boldly riffing on the ghost kitchen model, 2020’s defining foodservice concept.
By Tom Nightingale
The COVID-19 pandemic has brought a whole host of changes in foodservice. One of the ones most tipped for long-term success is the ghost kitchen model, and Ottawa-based restaurant group Mad Radish is taking the idea and running with it.
The concept of a restaurant or foodservice operator set up to provide pickup or delivery meals only has exploded as 2020 has gone on. Big cities around North America and the world have seen a plethora of options spring up, due in no small part to the general shift towards a more takeout- and pickup-heavy approach with indoor dining in many cases closed. For plenty of restaurants and brands, traditional dining is no longer a model that is sustainable – particularly if, as some experts are suggesting, things never return to their pre-pandemic normal.
In fact, the model is so popular and proving such a success, with increased convenience, far lower overheads, and much more manageable safety procedures, that some restaurateurs are already riffing on it.
One of those is David Segal, the founder and former owner of DAVIDsTEA, a brand that took the world by storm a few years ago. He is now overseeing his latest venture, the Ottawa-based Mad Radish company.
Adopt, adapt, improve
Mad Radish is, at heart, a healthy and gourmet fast-food chain. It has, of course, not been immune to the effects of COVID-19, being forced to temporarily shutter four of its six locations in March of this year. It was immediately clear to Segal that the survival of his business would depend on his ability to reimagine Mad Radish – and not just for the short term, but for the new long-term foodservice world.
The promise of Mad Radish wouldn’t change: bringing a gourmet fast-food experience to time-strapped Canadians. But the execution of that promise would have to.
As a response to COVID-19’s impact on the restaurant industry, Segal saw an opportunity to establish a new kind of convenience in the gourmet fast-food category by offering three unique menus under one roof (and on one app). Essentially a hybrid approach, it combines the best elements of a typical ghost kitchen with the functionality of a customer-facing restaurant, providing customers with flexibility, convenience, and most importantly, choice. The three brands – the flagship namesake brand, Luisa’s Burritos & Bowls, and Revival Pizza – are available at selected Mad Radish locations, and for home delivery across Toronto and Ottawa.
“There’s no question that the COVID-19 pandemic has accelerated significant shifts in consumer expectations and consumer behaviours,” Segal recently told RestoBiz. “Canadians have become accustomed to getting what they want when, where and how they want it – whether it’s delivered to your door, for contactless pickup, or in-store.”
Retaining the customer experience
To deny the fact that times are changing and things are moving towards the ghost model would be obtuse, Segal believes. But one thing he wanted to focus on while making that shift was retaining the customer experience. “A problem with ghost kitchens is the word ‘ghost’,” he says. “There’s advantages to being able to see the restaurant, see the cleanliness of it, the quality of the food, the person behind the counter. There’s a trust factor there.”
Segal adds that while COVID-19 has taught the lesson that people have become far more comfortable in a digital world that brings things directly to them, it’s also shown that people do like human contact. “We like being out in the world sometimes and we want to interact with real-life experiences and not just digital experiences.”
Another hard truth is that food delivery is not cheap. Pivoting from traditional dining to delivery-only amplifies those difficulties. There are IT costs, fees to third-party platforms, remodelling costs, and those are just some examples of the things you see at face value, let alone the hidden drains on an operator’s coffers. Largely, it’s a business model that only works if you’re able to offset those costs through more sales or by decreasing costs elsewhere in your operation, or, ideally, both.
The shift towards delivery started, by general consensus, a fair while before COVID-19 hit. But the pandemic has accelerated it and brought with it a fair amount of growing pain. “It’s a challenge because if you planned on 20 per cent of your business being delivery and it jumps to 40 per cent and the fees are 25-30 per cent, that’s a major impact on your numbers in a tight-margin business,” Segal notes. The most successful restaurants will likely be the ones that navigate that big shift.
In light of that knowledge, Segal has set about creating what he sees as a best-of-both-worlds scenario. “What we want to do is look through a bit of a wider lens.”
A three-pronged approach
Typically, in addition to traditional indoor dining, there are ghost kitchens and virtual kitchens that are gaining prominence with exponential acceleration. Though these terms can be interchangeable, some experts cite a slight difference: virtual kitchens tend to refer to models that use a restaurant’s existing facilities, while ghost kitchens operate out of rented facilities often with no bricks-and-mortar branding.
Mad Radish, though, is doing things slightly differently, as Segal describes it. Customers attending for pickup would typically walk into a store with “Mad Radish Gourmet Fast Foods” – the company’s original brand – on the door and walls. Within, though, it’s a triumvirate consisting of that brand, plus the two newer ones. Luisa’s Burritos and Bowls offers authentic South American ingredients made in-house every day, and Revival Pizza is the same idea centred around Neapolitan-style pizza.
Segal explains that when you walk in, you’re faced with the three brands’ menus and a contactless pickup setup. The idea is that if a family or a group of friends wants lunch or dinner, they can conveniently choose from a wide range of fare across the three brands without travelling to three different restaurants. There is limited seating available inside, too; part of Mad Radish’s quest to blend the best aspects of a ghost kitchen with the physical lived experience of dining out.
It’s the same principle digitally, as all three brands are available within the single-purpose Mad Radish app, which currently offers pickup and is set to expand to delivery in the coming weeks. On third-party apps, meanwhile, each brand has its own separate storefront. This has the dual effect of reiterating that the three brands are separate and unique, and also likely making patrons more inclined to order directly from Mad Radish for the added convenience of a three-in-one experience.
Mad Radish is set up with the intention of operating as a leader in convenient gourmet food, identified by Segal as an under-served segment of the market. The challenge therein of retaining the kind of quality customers will expect from that label is not lost on the owner, who notes that many pre-existing fine-dining restaurants have struggled in trying to transpose their menu from dine-in to takeout with little pivoting.
The notion of “made to order, built to travel” – a mantra that Segal repeats – is important. The key is in the details, he says: the greens chosen cannot wilt before arrival for a delivery order, nor can the crust of pizzas get soggy too soon. “I look around at the fast-food landscape and I think it’s limited, it’s often low-quality and I don’t see why people can’t have both speed and quality,” Segal insists. “That’s really what we’re trying to address through our three brands.”
Planning for an uncertain future
The basic principle of Mad Radish’s approach can be boiled down to offering customers the opportunity to get their food however they want in that particular moment. The future is still uncertain – that much, at least, is clear – and Segal is setting up to be prepared for whatever comes.
“It’s very hard right now to judge,” he concludes, noting that some restaurants that had thrived pre-pandemic are 65-70 per cent down now while others that were just so-so beforehand are up now due to the success of their delivery models. Segal notes that while operators can (and must) do their utmost, a lot of it is outside of their control.
“The time to judge how we’re doing will be when COVID-19 is over and people are back to their lives – or as close as possible,” he says. “The truth is, that’s going to be a while yet.”