Whats Driving This Unstoppable Trend? Food On Demand Food - - PowerPoint PPT Presentation

What’s Driving This Unstoppable Trend?

Food On Demand

Food Technology Mobility

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

• r 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