What’s Driving This Unstoppable Trend?
Food On Demand Food Mobility Technology
Who’s the audience? • Third-party delivery services • Restaurant owners and operators • Tech companies • Logistics providers • Suppliers, including packaging companies • Consumers
What Does This Mean for Restaurants? Current restaurant environment evokes 2007-2010 era, especially in casual • dining Increased competition, especially in fast-casual space • Higher barrier for entry, especially with pressure to develop mobile/loyalty • apps Demographic pressure for traditional restaurant brands • Customers less willing to spend with free time, even for dining • Third-party delivery provides opportunity to connect with younger • customers, add significant incremental sales
What Forms Will This Take? • Car-based third-party delivery • Bikes, robots and, eventually, drones • Innovative apps, like Zero Click • Commissary kitchens (hub & spoke) • Sidewalk robots
Delivery, now & future • Postmates: 10K deliveries/month in ‘14 to more than 1.5M/month by late ‘16 • Morgan Stanley: “What If All Food Could Be Delivered as Easily as Pizza?” • Only about a third of consumers order delivery that’s not pizza – only scratching the surface • Key barriers: price and availability
Morgan Stanley: Key Findings Customers want more than pizza and Chinese, but often can’t get it • Demand consistent across urban, suburban & rural markets • Only 5% of current restaurant spend is through delivery • Online ordering at top pizza chains went from 0% to 50% in 10 yrs. • Reasons for NOT ordering delivery: expensive, convenience of take-out, • delivery time too long, not convenient, limited choice of cuisines Total addressable food delivery market is $210 billion • Big players could quickly move needle (Amazon, MCD, Chipotle) • Delivery providers need to keep investing in themselves • SUMMARY: We are in the early days •
More… • Online food delivery could grow @ 17% CAGR – best case scenario • Most willing to pay $5 for 30-min. delivery • Weekday dinner is biggest delivery occasion • Best opportunities: Italian, chicken wings, more QSR, coffee shops, sandwiches, burritos, BBQ • Big Hypothetical: What if Amazon offers free delivery to all of its Prime members?
Four Scenarios ‘Frenemy’ • Chains adopt third-party aggregator, aggregators flourish, delivery penetration grows, negative – for chain restaurants Status Quo • Chain restaurants work w/aggregators in limited capacity, aggregator availability fails to scale – or drive incremental demand, online delivery penetration stays low, neutral for restaurants— nothing gained, but little invested Rising Tide • Chains endorse third-party aggregators, aggregators flourish, delivery penetration grows – rapidly, expands restaurant demand, good for all but pizza chains, which risk losing delivery share Chains Win • Chains build own in-house delivery business similar to pizza, aggregators fail to scale, online – penetration grows, advantages to those best positioned for self delivery, like Panera, Wingstop, coffee players
Recent Industry Coverage Bento founder on company’s demise • Environmental & social consequences of delivery/meal kits • DoorDash, Postmates unleash sidewalk robots • Where does delivery loyalty lie? • Amazon’s high-tech grocery foray • M&A activity in the category • What’s happening internationally, esp. Japan/Asia • Upstarts: smoothie kits, baby food or bone-broth delivery • First person: What it’s like to be a delivery driver • Webinar: How to Ink a Third-Party Delivery Contract •
Case Study • “Finding the Goldilocks of Delivery Packaging” by Nick Upton • Frank Klein, founder and CEO of Asian Box
Our Plans for the Future • FoodOnDemandNews.com • E-Newsletter • Webinars • In-person conference
Questions? Thank You! • Tom Kaiser • (612) 767-3209 • tkaiser@foodondemandnews.com • @thomasrkaiser • @FOD_News • Facebook.com/FoodOnDemandNews
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