The pandemic has put countless local restaurants in a precarious position. While many struggle to stay open week-to-week, others have found new and often better ways to reach their hungry customers.
The popularity of meal kit services has surged over the last calendar year, and several local restaurants have opened a new revenue stream while their doors have been closed to in-person dining.
Crafty Ramen is a Kitchener and Guelph-based restaurant which pivoted to meal kit services last April. Last November, Crafty Ramen expanded into Kitchener with their second location. Four months later, they shuttered their noodle shop once lockdown measures took hold.
“We built a big beautiful kitchen with the hopes of opening multiple restaurants,” said Khalil Khamis, partner and CEO of Crafty Ramen. “When the pandemic set in, we had to think of different ways to create revenue.”
Crafty Ramen launched DIY ramen kits to their local customers; a deconstructed ramen bowl recipe people could make at home. That expanded into a ramen subscription kit, where customers could sign up for monthly or bi-monthly ramen drops to their doorstep.
Khamis said the initial response to the ramen kits was so overwhelming that they’d often sell out within minutes of releasing them on their website. After seeing that local success, they expanded the subscription service to cities outside of Waterloo Region, delivering kits to the GTA, Niagara and Collingwood.
“For us, it’s a lot more of an experience than just a meal kit,” Khamis said. “We’re re-imaging Ramen and showing people that you can make this product at home, and it truly is better hot and fresh.”
In the back of Khamis’ mind, he always thought about selling their signature noodles, broth or hot sauce on their website within the next five years, but he never envisioned going into e-commerce or the meal kit market this soon.
Crafty Ramen now boasts over 600 subscribers for their ramen meal kits, with a waiting list of over 2,000 customers from the United States clamouring to get their hands on the boxes. Meal kits account for half of Crafty Ramen’s e-commerce revenue to date.
Even post-pandemic, once restaurants open for in-person dining once again, Crafty Ramen’s founder believes the meal kit market is here to stay.
“We see a new category emerging called ‘restaurant to consumer’, where people will still eat at their favourite restaurants, but might also grab one of their meal kits for later,” Khamis said. “We all know restaurants needed new revenue channels.”
In order to get these meal kits out the door in a timely manner, Crafty Ramen partnered with Tyltgo: a Kitchener-based delivery company. Jaden Pereira, a former University of Waterloo Student, founded the startup in 2018.
They deliver everything from meal kits, flowers, prescriptions and automotive parts. But one sector they’ve seen explode as of late is the shipping of subscription meal kits, like the ones offered by Crafty Ramen.
“A lot of the customers that are going into this niche meal kit space are starting to see the potential for scalability on that side is much larger than what they would have with their local restaurant,” Pereira said.
“If you think about it, with meal kits, our radius is well over 200 kilometres that you could be providing service to. Whereas with your restaurant, most of your consumers are within about 15 kilometres of where you’re located. That gives them access to a much bigger market.”
One of the biggest pain points Tyltgo heard from their clients was the time and energy it took to implement and sustain a delivery service where they didn’t have one before. Pereira’s company takes care of all that leg work; the back-end e-commerce and the delivery aspect.
“In-house delivery is very difficult to manage,” Pereira said. “It’s basically like running two businesses at once; you’re running your own delivery company, and you’re running your own restaurant.“That’s why they turn to people like us, so we can automate that process, take it off their plate, and they can focus on what they do best; is making that great food and making their customers happy.”