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
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Questions? Thank You! Tom Kaiser (612) 767-3209 tkaiser@foodondemandnews.com @thomasrkaiser @FOD_News Facebook.com/FoodOnDemandNews