Before Covid-19, Nhat Lin Nguyen had never considered operating a delivery service for his Berlin-based Italian restaurant Winterfeld. But when he was forced to close shop during lockdown, he listed it on a delivery app.
While delivery saved his business, the app took out a chunky commission. Nguyen turned to DISH Professional Order, a platform owned by Hospitality.Digital allowing restaurant owners to manage delivery and pickup orders without charging commission.
Online food delivery sales are expected to reach $220bn by 2023, accounting for 40% of total restaurant sales
Hospitality.Digital CEO Dr Volker Glaeser says demand for the platform over the past couple of years has skyrocketed; in less than a year, premium service users grew thirty-fold.
“The pandemic came as a shock to the entire industry, especially independent restaurateurs. You basically had to stop doing business,” he tells Sifted. “We saw restaurant owners who became digitally active and they switched to a delivery business overnight. They tried to gain new customers and tried to keep existing customers.”
So how are customer needs changing? And how can restaurants adapt?
Online food delivery is here to stay
Online food delivery sales are expected to reach $220bn by 2023, accounting for 40% of total restaurant sales. Carl Tengberg, CEO of delivery service Curb, says it’s only just getting started.
“Globally the pandemic catapulted the food industry three years into the future, both in demand and customer behaviour. It also opened food delivery to new demographics and customers that otherwise wouldn't have discovered food delivery for some time,” he says. “We’re still in the early days of food delivery and the industry will continue to develop over the coming years. If anything, I believe we’ll make food more exciting.”
The pandemic catapulted the food industry three years into the future, both in demand and customer behaviour
Salima Vellani, CEO of Kbox Global, a UK startup that connects underused kitchens with food brands, says people like the speed and ease of ordering food online, but the food industry is still looking for the best ways to meet this demand.
“The concept of ordering anything from your mobile phone at any time, and the convenience this offers, is not going away. It will remain as a core part of a restaurant's revenue and can’t be ignored,” she says. “People will always want to dine out but there are 21 dining occasions per week for a person and they're going to eat out, cook at home or order in for any one of those.”
Dish by drone
One of the biggest problems facing restaurateurs is a shortage of people to take food to the customer. Nguyen says there are enough delivery drivers available, but anticipates it will become harder as more restaurants offer delivery services.
Glaeser points out most customers live within a 5km radius from the place they order their food and are more willing to pick up from a convenient place. He adds that these shortages will not be long term and restaurants will always find a way to deliver.
“Some restaurant owners in Italy have told me they will be using drones to deliver. This might seem crazy now but I think we’ll see evolution there. The very successful independent restaurants will find different ways of getting the food to their customers.”
People will always want to dine out but there are 21 dining occasions per week for a person and they're going to eat out, cook at home or order in for any one of those
Vellani says the problem goes beyond delivery drivers. Restaurants may have to change the way they operate to keep up with demand.
“The whole value chain of food delivery is seeing significant upheaval as the great resignation from the industry unfolds. No one anticipated this and the only way the industry copes is by adopting innovative technologies that enable efficiencies within the sector.
“We have been exploring drone delivery and the technology that enables us to get chef-quality meals out of a kitchen within three minutes. I think given labour shortages and supplier constraints, there will be a lot more focus on things that enable super-easy prep from a kitchen and more affordable logistics models.”
Finding a niche
With so many restaurants now offering delivery and take away, Glaeser says restaurant owners need to listen to their customers, find out what they want and offer something new.
He says diners are increasingly vegan, and demanding quality, sustainability and recyclable packaging.
They’re also looking for new kinds of experiences.
The whole value chain of food delivery is seeing significant upheaval... No one anticipated this and the only way the industry copes is by adopting innovative technologies that enable efficiencies within the sector
“We’ll see clever and optimised use of space — like a combination of outdoor terrace and restaurant. In Paris, they have glass pyramids where you can sit outside the restaurant,” he says.
“Another example is BurgerAmt, which combined the experience of consuming burgers with the hip hop music industry in Berlin. They created a real ecosystem, and found a way of attracting people who are interested in hip hop and premium food.”
Compared with other industries, restaurants have been slow to keep up with technology because restaurant owners focus on the quality of their food, service or the ambience of their restaurants.
But digitising helps to optimise cooking, delivering and ordering, Glaeser says, which will simplify business for restaurant owners and increase sales. Those who don’t embrace it will fall behind.
“As an independent restaurant, what you want is one dashboard which enables you to manage all your key processes. It lets you cash in, take reservations, manage the pickup and delivery business, and manage your workforce. In the end, you will see restaurants being managed by smartphone,” he says.
And it’s not just digitising ordering; he says diners also expect to see their favourite eateries across different social media sites and on a variety of websites. Restaurant owners need to become entrepreneurial and own their brand. This independence will ultimately help them to thrive, as they can set their own pricing.
“There is a need for small restaurateurs to create ecosystems. You need to stand out. You can always survive if you do it differently and go against the trend.“
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