The food delivery sector is showing how innovation and competition can take customer service to a whole new level
The online delivery industry is booming. British takeaway start-up Deliveroo has become the star of the show of late, rustling up an impressive $70 million funding round in July 2015, having already raised $25 million back in January. It’s a large sum, even by tech industry standards, given the company is only three years old.
Deliveroo brings food from the likes of Nando’s, Wagamama and Leon straight to customers’ homes. The investors, led by Index Ventures, were no doubt wooed by Deliveroo’s impressive 500% increase in daily orders since January.
“Their product has really struck a chord with customers and we’re delighted to have the opportunity to invest again, for the third time, and keep on increasing our support to the company as it expands internationally,” says Martin Mignot, an investor at Index Ventures.
Deliveroo is not alone. The start-up is squaring up to online delivery giant Just Eat, which delivered one of the UK’s largest technology floats in 2014, giving it a market value of £1.47 billion. Then there’s rival Hungryhouse, acquired by German firm Delivery Hero in 2013, which is hot on Just Eat’s heels, with the parent company raising $600 million in 2015.
These household names are leading the pack, but there are plenty of players at the smaller end of the market, too, eager to take a slice of the burgeoning industry. One of them is Kukd, a start-up that hopes to differentiate itself from its peers by not just offering the best deals but also by treating restaurants with the same care as its customers.
‘Small players are eager to take a slice of the burgeoning online delivery industry’
“This certainly isn’t a niche market anymore; there are a lot of players but what we want to offer is the best deal for both the restaurants and the customers,” says Imran Jabbar, Project Manager at Kukd, which launched to consumers in November with a Kukd club card system, meal deals and incentives. It also has a slightly lower commission rate than many of its larger peers – giving restaurants more margin.
It’s not just the traditional takeaway restaurants offered by Kukd and Just Eat that are signing up to send their meals directly to people’s homes. Start-up delivery firm Supper offers food from Michelin-starred restaurants direct to homes.
Founder Peter Georgiou left his job in the City to start Supper, having spent some time living in the US. “I was in my apartment in London one evening and I fancied something from Nobu – you can get anything delivered in New York – and I assumed it was the same here,” says Georgiou. “We had to send a taxi to get the food and it took hours to get to us. I realised there needed to be a service for the higher end of the market.”
With orders for companies such as Just Eat and Deliveroo increasing at a very fast rate, and new concepts popping up in the market left, right and centre, one has to wonder: what is the catalyst? We’ve been using takeaway services for many years – why do we suddenly need takeaways from all restaurants?
This could be explained by our evolving tastes and awareness about food, says restaurateur Martin Williams, whose M Restaurant was one of Supper’s first clients. “People are time-poor and this is a huge part of the demand,” he says.
“In addition, people are more conscious of healthy eating and appreciate good fresh food. Takeaways have become an alternative to cooking, which doesn’t have to be about snacking and feeling bad about it in front of the TV – you can get high-quality goods delivered to your door.”
‘These days you can have something arrive as fresh as it would at a table in a restaurant’
Technological advancements in delivery methods have also helped to widen the remit of the takeaway meal. “A big part of the growing industry is about how food is stored and preserved,” says Williams. “These days you can have something arrive as fresh as it would at a table in a restaurant.”
Indeed, Supper has imported special bikes from Japan, each fitted with boxes that work hard to keep food at a constant temperature. “The bikes are quite futuristic and the drivers are well-dressed,” says Williams. “It’s how I imagine people would like to have food served, rather than by a man in a helmet with a pizza box.”
Big names get in on the act
The rocketing delivery market isn’t only spawning a new army of online services – it seems our appetite for home deliveries is also encouraging fast-food giants to jump on the bandwagon.
In February, Burger King became the first big-name eatery to start delivery trials in the UK – choosing to skip the middlemen and deliver the food directly.
Meanwhile, not satisfied with disrupting the taxi industry, cab app Uber has launched UberEATS in a number of cities including New York, Chicago, Toronto and Barcelona. Using the same app that people use to book their cabs, Uber is offering the chance for customers to get restaurant food delivered.
Uber has been tight-lipped about if and when it will launch the service in the UK but the company’s global ubiquity means it could soon become a real contender to the likes of Just Eat and Deliveroo, should it roll out the service.
So what next? With the industry developing so quickly, no one knows where the evolution will take it. Evidence suggests that we’ll continue to see new parts of the restaurant world making itself available for in-home dining.
Williams has his own plans to move the industry forward: “M Restaurants will open a specialist wine shop as part of the new restaurant in Victoria,” he tells us. “We could well take it one step further and deliver wine to your home with a wine waiter and sommelier – we could provide a wine tasting and then leave you to your dinner party.”
Now that’s service.
Illustration: Emily Robertson