“The way we order, produce, package, sell, deliver, think of, and consume food is changing rapidly.”– Seth Makowsky, Makowsky Restaurant Group.
“There is a rise of exceptional eateries with high-quality, pre-made food,” according to Seth Makowsky, CEO and Founder of Makowsky Restaurant Group. “The way we order, produce, package, sell, deliver, think of, and consume food is changing rapidly. Restaurants are becoming more like retail outlets and the ability to deliver super fast is spreading. Now forecast this to all channels like grocery stores, farm to table, hotels, events, etc. and you can see why delivery is one of the most exciting shifts happening right now.”
Congruently, consumer expectations have become higher when it comes to how they receive goods and how quickly. The consumer is now shifting away from traditional telephone-based takeaway ordering to online platforms, which offer a wide variety of choices – ratings and reviews, payment by credit and/or debit card, PayPal or in app purchases – providing a more efficient consumer experience. Combined this with new technological advances in smartphones, apps, APIs, and GPS tracking and it’s clear that we are ushering in Delivery 2.0: the era of ‘Food at Your Fingertips’.
Four segments gaining traction and key players to take note of are listed below:
Prepared Meal Delivery
There are two types of delivery companies sprouting up: Those that deliver food made by restaurants, and those that deliver food made by their own chefs.
3rd Party Food Delivery
The food delivery startup space is getting hot, crowded and very well funded. To reduce labor and insurance costs and overhead restaurants and food entrepreneurs are moving to 3rd party delivery, which employ their own fleet of couriers. Allowing the restaurants to rely on contractors and 1099s rather than full-time employees.
At the forefront of the 3rd party delivery trend is Uber. They are changing the face of delivery with the launch of UberFRESH, which utilizes their vast network of drivers and app technology to deliver lunch and dinner from your favorite restaurants within 10 minutes. This app based delivery system is operating Monday through Friday, plus brunch hours on the weekend. UberFRESH is currently delivery in Los Angeles. Meal options are pre-arranged with the restaurant, so currently there is no customizing available. Folks with food allergies take heed.
Other companies that offer online food ordering services include:
- POSTMATES: Transforming the way local goods move around a city by enabling anyone to get any product delivered in under one hour. Postmates’ revolutionary urban logistics & on-demand delivery platform connects customers with local couriers, who purchase and deliver goods from any restaurant or store in a city. Recently, they teamed up with Starbucks to deliver coffee, pastries and more straight from the Starbucks mobile app.
- GRUBHUB SEAMLESS: Mobile and online food-ordering company that connects diners and corporate businesses with thousands of takeout restaurants in more than 700 U.S. cities and London.
- CAVIAR: “Premium” delivery service partners with top-tier restaurants that normally don’t offer their food to-go.
- BITESQUAD: Mobile and online food-ordering company that connects diners to restaurants. Delivery cars are marked with BiteSquad logos and the drivers are uniformed so there’s no mistaking when all that deliciousness has arrived.
Chef Driven Delivery
Food delivery has expanded far beyond restaurants. Pre-made meal services like Munchery, Sprig, and SpoonRocket aim to meet customers at the nexus of healthy, convenient, and accessibility. This reveals another key reason why food delivery is taking off and spreading to new markets. It is not simply food that’s being delivered, it’s food culture. Organic food, farm-to-table eating, knowing and celebrating our chefs — these are intrinsic aspects of how people eat. Delivery services that focus on this approach of the dining experience mean customers can seamlessly maintain the aspect of dining, in the comfort of their own homes.
The following companies allow eateries to distribute their pre-made meals to consumers who can now enjoy them their homes or offices with a few clicks.
- SPRIG: A mobile app that allows users to order lunch and dinner off a limited, organic chef-driven menu. Promises to deliver in under 20 minutes.
- SPOONROCKET: An inexpensive, but healthy meal service that offers users a choice of four rotating menu items per day. Delivery is promised in 10 minutes or less.
- MUNCHERY: Meals are cooked by in-house chefs and delivered chilled, for reheating and eating later.
- PORTABLE CHEF NYC: Ready to heat farm-to-table meals for individuals, families or very large parties.
A Meal-Kit Delivery service will ship fresh ingredients each week, saving the consumer the time and hassle of meal planning and grocery shopping. Each package contains a chef-inspired recipe with the pre-measured ingredients. They are like a mix of meal planning, grocery shopping, and recipe discovery app all rolled into one. The following are the top 3 services:
Grocery Shopping Goes 24/7: Just Click to Eat
Consumers are becoming more comfortable and knowledgeable about the idea of grocery shopping online. Market research publisher Packaged Facts predicts that online grocery sales will increase from $23 billion in 2014 (accounting for 3.5% of total online and offline grocery spending) to approach $100 billion by 2019 (capturing 12% of total grocery spending). Online grocery service providers will develop models that streamline logistics and fulfillment. When this occurs, online services will become more widely available throughout the country and consumers will become more confident in shopping for food and beverages online.
The following are some of the big companies providing online groceries include:
- AMAZONFRESH: Huge selection with more than 500,000 items. Delivers groceries from a 1.2-million-square-foot distribution facility in San Bernardino: fresh produce (including organic), meat, seafood, pantry items, health, beauty, and household supplies.
- INSTACART: partners with major retailers; i.e. Whole Foods, Ralphs, Kroger and Costco. Instacart is the number one company on this year’s Forbes America’s Most Promising Companies list. They announced a new $220 million Series C funding round that has valued the company at more than $2 billion–just six months after it previously raised $44 million.
- PEAPOD: Markets include most of the Northeast and Midwest states. They offer money-saving store brands, fresh deli meat, cheese and salads, health and beauty care, baby food and baby care, natural and organic, meat and seafood, farm fresh produce, prepared meals.
- FRESHDIRECT: Made a name for itself by helping New Yorkers avoid long lines at grocery stores for years. They offer ready-made meals, fresh produce and more. No subscription necessary and meals are priced a la carte.
- NATUREBOX: Delivers a world of carefully sourced and nutritionist-approved foods right to the consumer’s door. Each snack contains wholesome ingredients – with no artificial sweeteners, flavors or colors.
- GOOGLE EXPRESS
- FARMER”S MARKET by OVERSTOCK.COM
What’s is on the horizon for Delivery 3.0? Drones
Drone delivery service is on the horizon. The US FAA regulations are preventing the use of UAVs (Unmanned Aerial Vehicles, like drones) for commercial purposes; however, a few companies that have petitioned and received the go-ahead from the government to start experimenting. One of them is Amazon Prime Air which is successfully testing and delivering in Europe. We’re also keeping our eye on Air Burpy, a grocery delivery company servicing the areas of Austin, Houston, and San Antonio in Texas. They are offering drone delivery starting April 1, 2015; it’s in beta, so there’s only a limited amount of spots available. Their new delivery system is designed to get packages into customers’ hands within 30 minutes or less. Now, all we need is Rosie from The Jetsons to put the food away for us.