Everything we need to know about the new, groundbreaking era of food delivery and how it came to be
Food is a necessity in our daily lives. You’re at home, alone and hungry, but the fridge is empty. What do you do next? You take out your phone and tap into a food delivery app, whether it’s UberEats or DoorDash, anything that is available. We’ve become so accustomed to the course of action that it has become a daily habit. You might be thinking “I already know all of this, why am I reading about food delivery?” Because just like any other industry, the food industry is changing rapidly, advancing technologically now more than ever before. Let’s take a look at the food delivery industry together.
The History of Online Food Delivery Service
Did you know that online food delivery services have been around for more than two decades? The very first order was made in 1994, from Pizza Hut via Pizza Net. In 1995, the first online restaurant delivery service, World Wide Waiter, was launched on the net. It offered home and office delivery services, and it aggregated more than 60 restaurants in the San Francisco Bay area. Since then, the scale of online food delivery services only grew. As the market expanded, more companies began to step into the industry, including Amazon Fresh, GrubHub, Dominos, McDonald’s, etc.
In 2009, with the rocketing popularity of the smartphone, GrubHub saw the opportunity and released the first app for iPhone. The introduction of a mobile food delivery system opened a whole new era in the food delivery industry. In the past decade, the apps we are familiar with today have grown from mere seedlings as very simple apps to the third-party food delivery giants that are household names today. They are now an integral part of our busy lives.
Market Value of Food Delivery Services and Analysis
The revolution of food delivery services
As mentioned earlier, the first food delivery app was launched in 2009. How did it become mainstream today? The progress of technology — And the popularity of smartphones played a major role in this. On top of that, the revolution of cellular networks also closed the distance between restaurants and buyers and the number of mobile users has doubled since 2012. Furthermore, the ever-evolving nature of our social environment accelerated the growth of food delivery services. Especially after the pandemic broke out, food delivery has become crucial to a good number of us, yet there is still ample space for the delivery industry to grow and subsequently develop new technologies that will make our lives easier.
The perspective of restaurants
Mainly focusing on third-party delivery
Third-Party Delivery refers to the process whereby the Company delivers the Goods on the Buyers behalf to a third party nominated by the Buyer.”
For all restaurants, food delivery is one of the few growing business opportunities presented to them. In the past, there were only two ways to buy food from restaurants. One was to dine in restaurants, and the other was to take out your order by yourself. Then food delivery services arrived on the scene to provide restaurants with a new way to get food to their customers. This might be a solution for most restaurants, but delivery isn’t always the best solution. A study by market research firm Zion & Zion discovered that 62 percent of consumers who have had bad food delivery experiences often blame both the restaurant and the delivery company. The restaurant in turn suffers from the consumer’s negative reviews. In addition, the restaurants do not have much control over the delivery platform, which means that they are unable to maintain customer relationships or the quality of the delivery crew and their services not to mention fetching the data analysis of deliveries from the platform’s system. Due to the problems outlined above, some restaurants may choose to build a food delivery system by themselves to gain more control.
Sizing the Food Delivery Market
According to an analysis by McKinsey in September 2021, the global market for food delivery is worth more than US$150 billion, having tripled since 2017. One possible reason for the rapidly growing market size could be the pandemic. The lockdown forced everyone to eat at home, causing consumers to rely heavily on food delivery services. It is stated by McKinsey that the market has more than doubled in the US since the pandemic, and is still growing rapidly. If the food delivery service can break through the limitations of logistics and operational requirements, they might very well be on their way to challenge the last miles of delivery. DoorDash is now on its way; they are now collaborating with corporations such as Macy’s and Walmart to deliver groceries to customers. According to Reports and Data, the global Digital Food Delivery Market size is expected to reach US$369.97 billion by 2030.
Ongoing Food Delivery Service Market
A huge change could happen in the market of food delivery services because of a number of new technologies that we will be introducing below.
The Rise of the Delivery Robot: Kiwibot
Founded in 2016, Kiwibot aims to bring down the high delivery fees and make deliveries clean and sustainable. The company is now serving in more than 50 locations and has 200 robots rolling in 10 campuses, including New Mexico State University, Loyola Marymount University, and Gonzaga University. To date, it has made over 200,000 deliveries. Partnering with Sodexo, the multinational food services and facilities management company, it will bring its team of 200 robots to 1,200 by the end of 2022.
To know more about Kiwibot and how it fights pollution, carbon emissions, and traffic congestion, click here.
Revolution for restaurant food preparation: Shikomel in Japan
With the attack of the pandemic, all restaurants have been suffering under the pressure of reducing personnel costs due to low revenue. With this in mind, Shikomel is providing a new business model for restaurateurs in Japan. Founded in 2019, Shikomel’s brainchild is the concept of ghost kitchen. Restaurateurs can order the raw ingredients prepared by Shikomel through an app and save on shipping when the order is over 20,000 yen. To date, more than 1,000 restaurateurs in Japan are using the service of Shikomel. Ghost kitchens have opened a new era for food preparation and saved a good number of restaurants hiring costs during the pandemic.
Drone tech reducing delivery costs
Even drones are in the delivery game nowadays. Users can monitor drones through an app called Flytrex, cutting out the need to hire delivery staff anymore. Without the personnel costs, the delivery fee will not be as high and therefore will be more acceptable to consumers also potentially raising the revenue of the companies that allow drone deliveries. Uber Eats, Domino’s, and other companies have been successfully using drones to deliver food orders. Although there are limitations to drones such as weight limit, insurance, etc, it will still be a bright future choice for many others in the food industry. The market for drones is expected to reach US$3.74 billion in 2026.
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