The demand for delivery has never been greater. Home delivery amongst the top five global foodservice markets by value is forecast to grow by US$39.2 billion to 2020.
Driving this demand are millennial-era consumers, especially in developed markets, that have grown accustomed to tech-oriented convenience. Early movers in this space, such as Grubhub in the US and Just Eat in the UK, have tapped into this demand for convenience and provided consumers with an incredible selection of choices when opting to order takeout for delivery.
As delivery becomes more convenient and widespread, however, consumers naturally expect more from these services and are increasingly willing to pay for a more premium experience. Consumers want more than just takeout, they want to dine-in at home with restaurant-quality food. And they want it delivered. At the same time, smaller-scale, higher-end restaurants that typically lack takeout or delivery mechanisms of their own are increasingly willing to cooperate with delivery services in order to tap into this lucrative channel and generate additional revenue.
The result is a shift in the food delivery paradigm, driven by a millennial-oriented demand for convenience without sacrificing quality. Niche delivery services are partnering with chefs and restaurateurs to develop purpose-built menus of offerings meant to be delivered. Some companies, such as the UK’s Deliveroo, have developed a means for restaurants to expand their offerings through purpose-built, delivery-only kitchens. Other concepts, such as New York City’s delivery-only restaurant, Ando, exist solely to provide high-quality delivery-friendly cuisine, and have no dine-in or takeout capabilities whatsoever. This is the future of delivery, as restaurants and delivery services blend to create an entirely new experience.
From takeout to dine-in takeout
Exemplifying this shift, Deliveroo, a restaurant (as opposed to takeout) delivery service with a fleet of black and electric blue-clad cyclists, cater to this emerging market. Deliveroo partners with restaurants that lack their own takeout or delivery mechanisms to facilitate their entry into these channels. Having opened in 2012, the company has expanded to 68 cities across 12 markets, with a strong presence in its home base of London. Growth of the company’s delivery service has been driven by the underserviced demand for higher-end cuisine. This progressive step in food delivery is no longer entirely novel, however, as other companies, such as Take Eat Easy and Jinn have entered the fray, as well as larger tech companies like Amazon and Uber that have expressed interest.
More inventive, perhaps, is Deliveroo’s new concept that offers restaurants cheap, off-site operating bases called “RooBoxes” in which to prepare cuisine specifically for delivery, a process Deliveroo manages. With five currently in operation across two carparks, one in Battersea and another in Dulwich, each RooBox is essentially a retro-fitted shipping container housing a kitchen in which participating restaurants can remotely produce delivery orders. Located in areas with low footfall, rent is relatively cheap, and the boxes lack a consumer-facing component, meaning they only need to be staffed by delivery and kitchen personnel. Deliveroo benefits from facilitating and delivering a greater number of orders, in addition to collecting a commission for use of the boxes. Restaurants, meanwhile, benefit from enhanced access to delivery channels. This is especially true for smaller-scale, higher-end restaurants that lack the space or capacity to facilitate a takeout or delivery service in-store.
Tommi’s Burger Joint, a local favourite with outlets in London’s Marylebone and Chelsea neighbourhoods, signed on to the RooBox concept in early 2016 as a way to expand the brand’s outreach, servicing a wider consumer base by providing delivery services to new corners of the city, thereby increasing brand awareness and ultimately driving more traffic to its outlets. With a planned third outlet to open in London’s SOHO neighbourhood, additional income generated from delivery orders through RooBoxes likely brings in much needed capital to facilitate expansion.
Where is this going?
Other concepts have taken niche delivery to new levels. UberEATS, another of Uber’s side projects that utilises the tech giant’s unique system of drivers and software, has partnered with local chefs and restaurants to create a rotating, pared down, UberEATS-specific menu of meals that consumers can order instantly, in addition to an a la carte selection of items from participating restaurants. While UberEATS can compete on convenience, uniquely positioned to tap into its network of Uber drivers to minimise delivery times, it also has taken another step in ease-of-use and quality, offering consumers a limited menu of carefully-curated options, ideal for an urban lunch crowd of consumers that lack the time to sift through too many options.
Maple, a niche delivery service in New York City opened in April 2015, operates a delivery model not unlike Deliveroo’s RooBoxes, except that Maple has its own chefs and kitchens, delivering only from its own limited selection of in-house cuisine. Maple has several operating spaces around the city, preparing neatly packaged meals and processing delivery orders through its own network of delivery couriers, and prides itself on managing every “touch point” of the process, according to an interview with Forbes. This gives Maple absolute control over the entire process, from sourcing the ingredients and creating the menu, to preparing and delivering the final product.
Finally, there’s Ando, David Chang’s delivery-only restaurant concept that offers Momofuku-inspired bites to a limited number of in-the-know patrons. Having only opened in May 2016, Ando delivers to a lunch-crowd within the bounds of a limited portion of lower Manhattan, but intends to expand to include a greater delivery coverage zone as the concept takes off. Ando is perhaps the most telling example of where delivery in foodservice is heading. Given the demand for chef-driven concepts, especially in major urban areas of developed countries, from consumers that are increasingly willing to spend more to eat better, there remains a massive amount of potential for delivery services that can adapt.
Rapidly developing technology and increasingly widespread mobile device usage is making all this possible, while it is the changing preferences of consumers driving this shift in the foodservice delivery paradigm. New entrants to the delivery market need to offer more than just choices, convenience and speed in order to compete in this increasingly crowded space. Consumers increasingly demand higher quality food with the same, if not better, level of convenience that they have become accustomed to. Given the untapped potential, global markets can expect to see more restaurants that don’t look like restaurants at all popping up in order to pump out purpose-built culinary creations for delivery to a new set of discerning consumers.