Delivering the goods delivery.

DELIVERING

the goods

Here, mealtrak’s, Nick Blake, proposes that cracking the delivery model in food on the go is key to future success.

OPPORTUNITY

Since the turn of the year, we have fi nally seen the emergence of a more sustained recovery in food to go. Although sales are still down by a third compared with pre-Covid, they are more than double those of a year ago and on a rising trend, which bodes well for the future.

But, the market has changed, and it is the manufacturers and brands which embrace this change and recognise the emerging trends who will succeed, whilst others lose ground. Nowhere is that change more profound than in food delivery. We are all aware of the huge surge in the uptake of grocery home delivery during Covid and the fact that higher levels of online shopping are here to stay. What is less evident – yet – is how this will play out in the food on the go arena.

In our view, there is little doubt that food to go delivery represents one of, if not the, biggest area of opportunity out there at the moment. With retailers as diverse as Greggs, McDonalds, Aldi and M&S all testing the water, it is only a matter of time before delivery becomes a major force in food to go. The reason is simple – they are responding to an unmet consumer need! mealtrak data shows that well over two-thirds of food to go buyers fi nd the idea of food to go delivery both at work and at home appealing – with half of these saying it is extremely or very appealing.

This potentially represents a big slice of the market, so it is very much a mainstream rather than niche area of opportunity.

INFLUENCING FACTORS

A number of interlocking factors combine to drive the FTG delivery opportunity. · Delivery appeals most strongly to Gen Z and millennial consumers, who are driving the wider food to go recovery (also strongest in London and amongst men). · The rise of online grocery has heightened expectations that food to go needs can be met in the same way, especially at work. · Changing working patterns mean more working at home, but do not lead to a reduction in food to go demand; however, there are often fewer food to options on hand, so delivery fills the gap. · More local retailers – shops, pubs, restaurants, takeaways, manufacturers – have adopted a delivery option, so the range of channels available has extended. · Consumer missions have evolved during Covid, swinging away from the more functional (quick and easy, good value, etc) towards added value missions, such as treats, sweet or hot food to go options. These create demand for home delivery of

FTG for social rather than (or as well as) work consumption. · Almost half of all FTG occasions are now shared rather than solo and this also lends itself more to a delivered solution.

In short, you need to jump on the delivery bandwagon in food to go, but there are lots of areas of opportunity within it.

UNCERTAIN ECONOMICS

The biggest barrier is perhaps that the economics remain uncertain: how do you do it well and make a buck, without diluting margins too far? There is no easy answer here, but the models will evolve. If Aldi and Greggs, who are by no means premium operators, can make it work, then so can others. Whether they will do so in conjunction with their current delivery partners, or test the water then create their own bespoke solutions remains to be seen. Currently though, there appear to be two discrete models...

LOCAL

Over 60% of deliveries are sourced from local outlets, so there is a lot to play for at this level.

NATIONAL

The national brands, like Deliveroo and Just Eat account for less than one third of food to go deliveries, but are well placed to take a greater share of this market, which perfectly complements their infrastructure, grocery and takeaway activities; potentially creating a viable framework for success.

Currently Deliveroo, Just Eat and Uber Eats dominate this market, with competition likely to intensify.

To conclude, delivery in food to go isn’t something it is easy to do well, or profitably. But it does sit at the heart of the recovery from Covid and represents a core market sector for the future. And there are added value areas of opportunity that can help mitigate margin dilution. So, it is certainly not an opportunity you can afford to ignore.

HELP US TO HELP YOU

The British Sandwich and Food To Go Association aims to ensure the best market conditions for our industry. From lobbying Government to organising British Sandwich Week, we aim to provide the best environment for you to trade in, plus a wide range of bene ts. This all comes with membership:

Facing the Brexit sta ng challenge – Our business needs good people. We are lobbying to ensure Brexit does not lead to the door shutting on the people we need to keep going.

Reducing Energy and Telecoms costs – Our specialist advisor will shop around to get you the very best deals – and it’s free!

Insurance with Free Membership – Our specialist insurers o er really keen prices for shop and business insurance – and independent retailers can get free membership if they use them.

KPMG Accounting o er – Members can take advantage of a three months free accounting o er from leading accountants KPMG.

Training – Our discounted on-line hygiene training is focused and saves you money and time.

Assured Guidance – Members following our Assured Advice are protected from enforcement challenges.

Free Advice – From legal to technical advice, our members have free access to experts.

Buying ingredients or equipment from abroad? Our agreement with Cornhill o ers exceptionally keen exchange rates.

Business rates and nancial help – We have teamed up with a specialist business nance consultancy who provide members with advice on everything from business rates to raising nance.

Cutting Fuel bills – Members can enjoy savings of up to 5p per litre on diesel & petrol, and up to 10p per litre at motorway pumps, with a free no-obligation fuel card.

London hotel discounts – Save money when staying in London using the unique Association booking code with Grange Hotels.