What’s for Dinner? The Delivery Revolution
Long gone are the days when only pizza and Chinese food were synonymous with delivery. A food delivery renaissance is underway, fueled by consumers’ desire for convenience, simplicity and innovation. With services ranging from DIY dinner kits to niche gourmet meals, startups and established food companies alike are racing to meet the on-demand needs of consumers.
Though food delivery has long been a staple of the restaurant industry, the on-demand economy has helped revitalize consumer interest. An NPD Group study notes 904 million online orders were placed in 2015 – over a 50% increase from orders placed in 2010. Web searches for “food delivery” on Google have also doubled in the last five years.
As time becomes a more valuable commodity for consumers, food delivery will take on a more prominent role in consumers’ everyday lives.
So Much to Eat, So Little Time
A variety of apps and services have come onto the food delivery scene, transforming the market into an expansive, segmented marketplace – all with the goal of providing consumers with innovative and convenient food delivery offerings.
While the sheer number of brands may look intimidating, we’ve boiled the market down to four primary categories (along with the major players in each):
- The DIY Dinner (Blue Apron, Plated, Purple Carrot): Subscription-based services delivering chef-curated, easy-to-follow recipes and boxed ingredients directly to your door
- The Pocket Food Court (UberEATS, DoorDash, Postmates): Mobile apps providing on-demand ordering and delivery from a variety of independent restaurants
- The Direct-to-Door Grocer (Instacart, AmazonFresh, Shipt): Apps and services offering consumers the ability to shop online and have groceries delivered directly to their homes
- The Digital Restaurant (Deliveroo, Sprig, Munchery): Fully integrated restaurants without a dine-in option – they exist only to serve meals through delivery
And There’s Still Room for More
While there’s competition in the marketplace, saturation hasn’t yet set in. According to TechCrunch, online penetration is at roughly 1 percent – about 9 out of 10 consumers still pick up the phone to call for delivery orders. Morgan Stanley’s survey of consumers revealed that about 55% of consumers in New York had limited awareness of GrubHub and Seamless – two of the pioneers in the space. Outside of New York, that number jumps to 80%.
The truth of the matter is that food ordering is still largely an offline activity, and most consumers have little to no awareness of these services. Despite that, industry analysts are expecting online ordering to overtake offline ordering within the next five years. As convenience continues to drive the choices of consumers, food delivery services stand to benefit by giving time back to consumers.
What Does This Mean for Other Food Brands?
CPG brands, grocers and restaurants alike may find cause for worry in this trend. However, we see this trend as an opportunity for other brands in the food industry. Here are some ways your brand can meet consumers on their doorsteps:
- Building your own delivery service can be costly and time-consuming. Look to partner with established delivery and services – or possibly even retailers – to deliver your brands’ products directly to consumers.
- When having your brands’ products delivered to consumers, explore innovative and unique packaging ideas. Give the consumer more than just their time back.
- If you’re a CPG brand, take the lead in the DIY Dinner category. Leverage the competitive advantage of your brand to offer pre-packaged meal bundles at a more convenient and affordable cost than other meal kit services.
- Can’t carve out a path in the delivery space? Cultivate an engaging, interactive online presence for consumers. Create short-form video featuring easy-to-use recipe hacks or deliver personalized recipes to consumers.
- Online food delivery isn’t the only technological advancement in the food industry. Seek out other opportunities – think beacon technology or in-store digital touchpoints – to provide convenience to the consumer throughout their user journey.
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Peter Mayer Agency
Peter Mayer Agency
Peter Mayer Agency