Food delivery merges my two favorite pastimes: eating and not moving

 

 

“Your order is on its way.” Now that’s what I like to hear. Without leaving the comfort of my dorm, I can have a box of sushi or Pad Thai on its way to campus in a matter of minutes.

How have food delivery services such as Grubhub, Blue Apron, and Amazon Fresh changed the food landscape?

Let’s first dig into the different types of food delivery services.

  1. Grocery delivery, such as Amazon Fresh and the now-extinct Good Eggs. These services do the grocery shopping for you. Whenever you run out of snacks, why run to the store when you can order groceries online and ship them directly to your door?
  2. Meal kit delivery, such as Blue Apron, Hello Fresh, and Plated. These companies pick a recipe, portion the specific ingredients, and send you an idiot-proof package of everything you need to make a homemade meal.
  3. Restaurant delivery, such as GrubHub, DoorDash, Seamless, and Uber Eats. These are primarily app-based platforms that connect restaurants to their customers and deliver the food for them. Customers place an order online, and GrubHub will deliver the food on behalf of the restaurant—for a commission.
  4. Prepared food delivery, such as Sprig, Maple and SpoonRocket. These companies prepare specialty meals in their local industrial kitchen, and then use analytics to promptly deliver the food themselves. This seems to be a less widespread category.
  5. Niche delivery services, such as Green Blender for smoothie recipes and Caviar for gourmet food. These are just two examples of a seemingly endless supply of niche food delivery services. I would also categorize monthly snack-delivery services such as Snack Sack and Grazed into this group.

In this article, I will mainly be focusing on the overall food delivery industry, while diving deeper into restaurant delivery and meal kit delivery. 

 

The meat and potatoes of the industry

Grocery store, meet the digital age. Food delivery has a lot going well for it now. Investments for food and grocery delivery services peaked in 2015 at an astounding $5.4B in funding. Until recently, very little shook the stability of the classic grocery store. Now, it’s a whole new digital world.  74% of millennials and 56% of adults say they would online order delivery from a restaurant if it was available. That opens up a huge market of people yearning for the ease of delivery. This is likely a result of our never-ending need for quick convenience. If we buy something online, it had better be here in 2 days. If it takes more than a second to load a webpage, the Wi-Fi is too slow. If there are no Ubers in the area, we can’t bear to wait more than 10 minutes for a ride. Productivity apps are making life more efficient, and eating is not an exception. For some, grocery shopping and cooking are perceived to be chores. If you don’t want to do it, get an app to do it for you!

Additionally, consumers are less price sensitive when it comes to foodservices, so they are more willing to spend extra on the convenience of food delivery and packaging. Powerful brands like Uber have the funds to outspend or “out-lose” their competition while building up habits among their consumers. Once they’re habituated to speedy food delivery, they won’t want to go back.

 

There’s a new Masterchef in town

Gordon Ramsey, meet GrubHub. Let’s take a peek at the Restaurant takeout category. What can services like GrubHub offer to local restaurants? Well, take the fact that 60% of restaurants go out of business within 3 years of opening. Ouch. The main reason for this mass mortality is poor accessibility. If customers can’t get to a restaurant, they won’t eat there. It’s that simple. But what if they could get to the restaurant online? That’s where companies like GrubHub come in.

Some quick stats from a GrubHub publication: After joining Grubhub, restaurants grow their monthly takeout revenue by an average of 30%. One in five restaurants doubles its revenue after working with GrubHub. And GrubHub cuts restaurant processing time by more than 50% by saving the back-and-forth conversations of phone orders.

Delivery services like GrubHub also enable smaller businesses to gain online delivery traction. If they can’t afford to have their own delivery fleet, GrubHub will handle it for them.

There are a couple downsides to restaurant delivery services. If GrubHub performs an unsatisfactory delivery service, that will likely reflect poorly on the restaurant, not GrubHub. Local restaurants may lose the intimate customer relationship they’ve developed. And GrubHub has to make their money somehow—so that comes in the form of service fees charged to the restaurants.

So, what’s the future of restaurant delivery? You guessed it: drones. Food delivery packages are small, nontoxic, and have high value per unit. For local deliveries, algorithmic drones could drop off fresh food with unmatched speed.

 

Rachel Ray isn’t the only one with 30-minute meals

Rachel Ray, meet Blue Apron. Meal kit delivery is a huge trend right now. Right on their website, Blue Apron asserts that food is better when you start from scratch. They work with chefs and farmers to provide sustainable recipes at a better value to help you cook incredible meals. It introduces people to new ingredients and recipes they might have normally tried.

Almost half of food in America is wasted. By specifically portioning ingredients for the recipes, they eliminate some food waste. Meal kit delivery services were expected to become a $5B industry in 2016. These services make life so much easier for busy Americans who don’t have time to plan, shop for, and prepare delicious meals.

 

Unwrapped–Food delivery edition

But Blue Apron is “trashy.” While eliminating some food waste is incredible, the effects may be offset by the packaging waste. All the packaging is biodegradable or recyclable, in theory. However, recycling some of the plastics and ice packs can be an involved process.

Aside from the economic impacts of digital technology on food delivery, it’s important to consider the environmental impacts. Having food shipped to your door creates extra emissions from transportation, in addition to packaging waste. E-commerce in general has increased the amount of cardboard produced yearly: over 35.4 million tons of it in 2014.

Amazon Fresh is trying to counter this environmental impact by shipping groceries in reusable green totes, that can be picked up at the next delivery. But they’re not always easy to repack!

 

 

SO, WHAT’S FOR DINNER TONIGHT?

The digital world is just cracking the surface of the food industry. From revamped restaurant delivery to grocery and meal kit delivery, technology has already enabled incredible changes in the way we consume food.

Have you used food delivery services? Where do you see the future of food delivery? Let me know in the comments!

9 comments

  1. Our on-demand economy was yearning for the likes of Grubhub and Blue Apron for years. Now that we have it, everyone continues to ask what’s next? I think there is still room for continual innovation in the space. My mind wanders to the use of drones in delivery over the next five years and ultimately driving the cost down of these services which are largely for more affluent consumers.

  2. I’d be curious to know how technology will improve the actual transport of the food. Grocery deliver is fine because it comes in trucks that have refrigerators and freezers, but there are issues with restaurant delivery transport. I think the outcome is generally disappointing if you order a burger, or fish, or really anything that needs to be eaten shortly after it’s cooked. Even if these items are only in the delivery car for 30 minutes, they already lose a lot in terms of taste.

  3. joeking5445 · ·

    You had me at the title. Great post! I am part of the minority that prefers speaking on the phone to get a food order. I have a food allergy and I feel safer communicating the allergy to actual person. The idea of drone delivery is very interesting. It could disrupt the whole food delivery industry.

  4. fayehubregsen · ·

    Great post and really helpful use of data. I was interested to read that one in five restaurants doubles its revenue after working with GrubHub — evidence that accessibility is a huge factor driving business and speaks to the success of the growing fast casual restaurant business. Your reference to Amazon Fresh and their initiatives to counter the environmental impact of shipping groceries is something I hope more and more platforms will consider going forward and perhaps Amazon Prime can revamp the way they ship items to avoid the buildup of Prime boxes as well.

  5. Really great post. We’re Blue Apron users ourself, and really appreciate the quality of the food and the recipes. I actually like this approach better than simple “grocery delivery,” as it takes advantage of the digital platform to think about their product differently.

  6. laurencondon23 · ·

    Awesome post! It’s been interesting to see how food delivery services have evolved just during my time at BC. Similar to my experience with Uber, freshman year I had never heard of services such as grubhub or foodler but am now a frequent user of the website. The added convenience has made me wonder many times how I ever functioned before I knew about these services.

  7. dcardito13 · ·

    Loved the title! Food delivery services have definitely been a huge benefit to me, especially throughout my college years. It makes life so much easier for us lazy folks to get the restaurant food we want without having to actually get up and go there. The only downside that I have personally seen is that the food is less fresh through this process, more so with the restaurant deliveries such as pasta or chicken dishes. Obviously we’re making this compromise from not physically driving to the restaurant to get the food ourselves, so I guess we can make this sacrifice to not get up from our beds. Worth it to me!

  8. Really liked this post. I really like the concept of Blue Apron, but as you have quite rightly pointed out, the amount of packaging is concerning. Having said that, I really like the concept and the exposure users get to interesting ingredients one might not think of using.

    I am not sold of the GrubHub or other food delivery apps, but it seems to be the direction everything is going. As you pointed out, restaurants really rely on GrubHub, as a partner organization to ensure that the customer is satisfied. It’s similar to the article we read about the customer journey and thinking beyond touchpoints. I have had a couple of bad GrubHub experiences – cold pizzas and lost deliveries, and I tend to blame the restaurant/fast food place.

  9. Love Love Love the title! Love food and not moving too, but gotta say, you won’t catch me using one of these services. Number 1, I really like to cook from scratch and use what I can creatively from what I got in the kitchen. Number 2, I am cheap and cooking from scratch is definitely the most cost effective way to go. Number 3, I only live a MILE from the grocery store and I can buy ALOT when I go so I am usually prepared for anything. Number 4, I’m a Baby Boomer not a Millenial :)

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