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Opinion: The future of food in a food delivery economy

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Francis Loughran, managing director, Future Food, addresses how food delivery as a normalised method of food purchasing will continue to grow

The last 18 months has seen a tremendous rise in the acceptance of food delivery into our daily lives. Whether it’s prepared food or fresh food, the trend is obvious and apparent to all.

In February this year, Hello Fresh NZ (a meal box delivery specialist) announced a 143% revenue increase year on year, with their workforce tripling in size during the same period, a quantifiable outcome of the changes and impacts of the pandemic-response effect on our purchasing habits.

The age of convenience

Acceptance of food delivery and home delivery as a normalised method of food purchasing will continue to grow, as consumers we like it for a number of reasons:

  1. It’s easy! This is the age of convenience and I want it now (consider the current marketing campaign of KFC – “Shut up and take my money!”, or the astronomic rise of finance company Afterpay). This is an era where Millennials and digital natives are taking over from Baby Boomers and successful businesses adopt an adapt-or-die mentality in the age of disruption. Convenience is a highly valued commodity in a fast-paced world.
  2. We know the cost. No getting talked into an extra glass of wine by smooth talking bartenders, no pre-dinner drinks, no extra sides or condiments and no taxi fare/Uber charges to get there and back. Your favourite condiments are already in the fridge and we know the price of the experience will be exactly the same as when we press ‘accept’ on the delivery platform app.
  3. Choice. Whether it’s the choice of delivery platform; choice of restaurant; choice of cuisine; choice of price point or even enjoying different meals with the same people in your house from different restaurants at the same time; choice is at the forefront of the popularity of delivery platforms.

Understanding the competition

From a prepared-food perspective, the rise of delivery aggregators is gaining momentum at a terrific rate of knots. In evaluating the competitive landscape for any modern food and beverage precinct, it is no longer enough consider the immediate surrounding competition, but rather we also need to consider the competition provided by “Netflix & Order-in,” working in tandem to make a quiet night in on the couch a serious competitor for restaurant spending.

Ghost kitchens and virtual restaurants are now an established business model in an industry that is evolving at a furious pace, more and more frequently from purpose-built, delivery-specific hub-kitchens. These operations are built to maximise the profitable opportunities of F&B in a new economy with highly engineered cost structures  that allow their operators to dominate the market across a range of criteria including price, range/reach, diversity of offer, speed of service, procurement and purchasing power.

From a traditional food & hospitality perspective, the battle for discretionary spend is only just beginning. But as is so often cited, home delivery can never match the experience of a great meal OUT. And this must be the mantra of modern food projects; they must be anchored by memorable experiences – delicious food from well considered menus; thoughtfully complemented drinks lists and personable, friendly, deliberate service within design driven environments.

If physical food and beverage businesses are to remain relevant in an age of virtual restaurants it must be through the creation of memorable, positive, real food and service experiences.

Francis Loughran, Future Food