Sharpen delivery chops at Food On Demand Conference
Last year’s Food On Demand Conference. Check out this year’s conference, April 1-2 in Chicago, at FoodOnDemandNews.com.
Restaurant operators are past the point of seeing third-party delivery as an intriguing new idea worth investigating. Recent evidence proves quite convincingly that bringing prepared meals straight to consumers is here to stay. In the words of restaurant analyst firm Cowen, the inflection point is here with its estimate that total restaurant delivery sales hit $43.1 billion during 2018.
Diving deeper into how increased delivery options are impacting hungry consumers, Cowen’s recent survey of delivery customers shows 49 percent said mobile ordering through apps or websites is driving increased delivery usage. In addition, 47 percent of its respondents said increased delivery options are encouraging them to order more frequently—and both data points are a much-welcome salve for a restaurant industry that has struggled with flat or declining traffic in recent years.
With findings like that, and many others from Wall Street firms that closely watch the restaurant industry, making delivery as accessible and easy as possible is job one at most restaurants, whether they are franchised or independent.
In addition, mega-brands like Subway and McDonald’s are stepping up delivery, bringing direct-to-consumer options to more customers in more cities, including increasingly rural areas that were initially left out of a delivery boom that required significant population density to make the numbers work. With delivery reaching the hinterlands, it’s reasonable to suggest delivery brands won’t be willing to take a loss for long as small-town options proliferate. Grubhub alone is planning to reach 200 new markets this year, versus the 100 originally planned.
As hundreds of millions of dollars in investor cash flows directly into the coffers of third-party delivery providers such as Grubhub, DoorDash, UberEats and the like, the restaurant industry is driving into the perfect storm of multiple, inescapable factors increasing offerings and delivery orders in lockstep—suggesting we’ll see restaurants and delivery providers revising their projections even higher as 2019 unfolds.
Robots coming in hot
A dramatic increase in the supply and demand notwithstanding, technology is also making its mark both on the delivery of prepared meals and with retail and grocery offerings. Starship Technologies is just one of many delivery robot manufacturers moving out of the testing phase and into the mainstream.
Brands such as Domino’s have been testing autonomous delivery for more than a year, and Postmates and Ford Motor Co. are conducting autonomous delivery tests in South Florida. Roping in major automakers is an incredible milestone, and one that demonstrates the intense amount of research and development happening behind the scenes to enable those drone and robot deliveries outside of dense, warm cities with robot-friendly climates.
Safety concerns and government loopholes remain a stumbling block, but that’s nothing a little D.C. lobbying can’t solve with pressure from big brands that carry a lot of weight in the nation’s capital. Recent updates, including from Alphabet’s Waymo, suggest smaller and slower may be better, both at avoiding robots-gone-mad lawsuits, and enabling lower-cost deliveries for restaurants and delivery providers.
Sure, a Kiwibot robot may have received all sorts of mocking press and memes when it caught fire on UC-Berkeley’s campus in December, but robots and drones are trucking along and working out the kinks one day at a time.
Diving deep into delivery
Distilling what this all means for restaurant operators is another animal in need of taming, but continued struggles with foot traffic will force cautious brands off the sidelines, and well capitalized chains to double or triple down on their delivery efforts.
This year’s Food On Demand Conference, happening in downtown Chicago April 1-2 and presented by Franchise Times’ sister publication Food On Demand, will dig into these issues and more. Back-of-the-house optimization, POS integration, staffing challenges, contract negotiation strategies and the promise of delivery-only kitchens are all be on the agenda.
The first day’s schedule includes keynotes from celebrity chef Ivan Orkin as well as Grubhub's energetic President and CFO Adam DeWitt. Postmates and Ford will share findings from delivery tests during the luncheon presentation, and the afternoon sessions are divided between franchised and independent restaurant tracks.
Day two includes a Third-Party Deep Dive, where attendees will hear directly from executives at all of the largest delivery and catering providers, and also from Amazon Restaurants and Google, marking the official entrance of big tech into the space. Lastly, two consumer behavior experts will help attendees break it all down—and return home with specific intelligence to inform their off-premises strategies going forward.
Restaurant operators will also have their say, sharing early mistakes, best practices and profitable strategies for integrating delivery and catering orders into their kitchens.
Presenting restaurateurs include Alex Canter of Canter’s Deli in Los Angeles, Elizabeth Tomlinson of Chicago’s Cornerstone Restaurant Group, eatsa CEO Tim Young, Dawn Croft of KFC, and Cynthia Gerdes, founder and CEO of Minneapolis-based Hell’s Kitchen (not a Gordon Ramsay property).
According to research firm Stephens, “delivery continues to proliferate at a 20+ percent organic growth rate.” That and other factors lead the firm’s analysts to raise the revenue outlook for market-leading Grubhub to $1.35 billion for the 2019 fiscal year.
Third-party delivery and catering brands are still learning about their customers—both consumers and restaurant partners—meaning that restaurant operators have a bevy of off-premises options at their disposal.
Summing up this current moment, Jim Collins of virtual kitchen concept Kitchen United said it best: “I had a restaurant operator say to me, ‘I can’t make money in delivery.’ If you can’t make money in delivery, then you better start thinking about a new business to be in.”