Survival of the fittest

No one could have predicted the post-pandemic impact on food delivery operations, but aggregators, dark kitchens and new products are blazing fresh trails.

The whole world is seeing the automation and digitisation of the food industry through aggregators, apps, new payment methods and product lines. But perhaps the most impacted sector is online ordering and delivery – especially post Covid-19. Restaurants and food to go (FTG) outlets have been forced to become more tech-savvy, which is a challenge when you consider that many have come into the industry with a creative bent, embarking on a labour of love. But businesses that aren’t agile and nimble are likely to struggle. Customers are lazier, seeking excellence at the push of a button, while competition is fierce. High quality and impressive service are non-negotiables.

Land Of Opportunity

Aggregators such as Just Eat, Uber Eats and Deliveroo have changed the game forever, with their platformto-customer model – abandoning the early, long-winded marketplace format, where the consumer would have to contact the restaurant directly. These businesses are remarkably adept at innovating, as they improve profitability through increasing fees, stacking, optimising GPS and streamlining head office operations. Recent data from Lumina Intelligence reveals that Just Eat boosted profitability in 2022 through optimising consumer fees and increasing commission rates in Europe. Established in Denmark in 2001 before landing in the UK in 2005, it works closely with restaurant partners to provide delivery. Unsurprisingly, foodservice delivery has outpaced eating out for a decade, undeniably aided by the launch of Deliveroo in 2013 – Uber Eats arrived three years later.

Another major player is global food tech scale-up, Deliverect, who simplify online ordering and now work with over 30,000 locations in 40 markets. Integrating third-party food delivery platforms with restaurant point-of-sale (POS) systems, a valuation of $1.4 billion illustrates how well things are going. Speaking on the Startups Magazine: The Cereal Entrepreneur podcast, The Future of Delivery Food, Deliverect CEO and co-founder, Zhong Xu, illustrated how the consumer needle has shifted.

“Delivery is not a niche anymore, with a focus on just junk food – it’s so much more than that. People are also looking for high quality. In Europe, you can order from Michelin-starred chefs in 30 minutes. And with inflation and the high cost of living, families are seeking small things that bring joy. It costs a lot to travel into a city restaurant and drinks are expensive, so they opt for something that comes to their door,” said Xu.

But it’s not as simple as connecting with an aggregator and watching the money roll in. “There are lots of different ways to get to the end customer. If you’re a Japanese restaurant, consider differentiating ramen and sushi. You would originally have four digital channels (Uber Eats, Deliveroo, Just Eat and your own website) – but now there are eight, potentially doubling and tripling revenue. Creating virtual brands, with more online digital doorsteps, is undoubtedly the future.” With over four in five of the leading 50 café, bakery and sandwich brands by outlets now offering a delivery service