Thread by @ShaanVP

just sent out a newsletter to 16k subscribers about...CLOUT KITCHENS:

WHAT it is...HOW it works...and HOW MUCH $$$ they make👇

A lot of people have heard of Cloud Kitchens (a restaurant with no storefront. They ONLY do delivery via doordash, uber eats etc.)

That's a cloud kitchen. What's a 'clout kitchen'?

It's a cloud kitchen - branded with an influencer who has clout.. hence, a clout kitchen.

The best example? 3 weeks ago when @MrBeastYT came out with MrBeast Burger and it became the #1 app on the app store, and got slammed with so many deliveries it was 2-3 hour delays

background - @MrBeastYT is a youtuber with ~50m youtube subscribers (aka, a shit ton)

He rolled out his own branded restaurant in ~300 cities overnight, with a simple menu of branded burgers, fries & shakes.

How did he do it?

He partnered with Virtual Dining Concepts (VDC), the brainchild of Robert Earl (ceo of planet hollywood).

They license influencer brands, and create virtual restaurants - For example:

* Mariah Carey's Cookies
* Mario Lopez Tortas
* Paulie D's Subs
..and now Mr Beast's Burger

VDC goes into cities and partners with restaurants that have extra capacity (that's most restaurants nowadays)

They send them branded packaging. So to a customer, it looks like MrBeast sent them a burger. But the food is made by a local burger joint

This is a win-win.

Celebrity gets to roll out 200-300 locations, overnight

Restaurants get extra orders & extra $$ (helpful during covid) that they can fill using staff + ingredients they already have

I asked a friend in the industry to walk me through the economics. This isn't specific to this deal, but here's a back of the envelope calculation of how much a clout kitchen can make:

Spoiler - the celebrity can make ~$10-20k per day in profit share

The math is very rough, and some assumptions are off.

But ball park I think it's right.

With each restaurant only doing 40-60 orders per day over a 10 hour window...and multiply it by 200-300 locations...

that's a lotta cheddar

This isn't the first time celebs slap their name on a commodity product.

Alochol --> @RyanGosling (gin), @TheNotoriousMMA (whiskey), @KingJames (tequila)

Makeup --> @rihanna (fenty), @KylieJenner

And this won't be the last... but it is a new way to turn fame into fortune.

The next pizza hut won't be brick and mortar, it'll be in the cloud.

And it'll probably be influencer branded.

Every day @stoolpresidente doesn't launch "One Bite Pizza" is another day he puts off a $50M+ payday.

Shoutout to @StuIverson for predicting this way back in February. Before covid, when we were all still french kissing & sharing straws. He called this on @myfirstmilpod !

if you like getting breakdowns of how business work. follow me (@ShaanVP) or subscribe to the newsletter for more in depth stuff shaanpuri.com