On-demand · Startups

On-Demand Food Delivery: What sets you apart from the rest?

Anonymous

September 15th, 2015

The On-Demand market is growing rapidly, especially in the On-Demand food delivery sector. What is it specifically about a company (marketing, ops, tech) that can truly set one apart from the rest? (ie. Chewse, Blue Apron, Munchery, Spoonrocket) 
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David Crooke Serial entrepreneur and CTO

September 15th, 2015

I'd say ops, specifically delivery time .... here in Austin we have two long standing companies Dine on Demand and Eat Out in, and delivery time is typically an hour. Good usability on the website always matters.

Michael Brill Technology startup exec focused on AI-driven products

September 15th, 2015

While there needs to be basic ops competency, in the long-run it's going to be about the food/food experience. If this is going become a thing (meaning, it makes a serious dent in how mainstream consumers source their food), $30-$40 for dinner for two isn't going to work.

None of these companies will be doing their own delivery in two years and a lot of the latent competition will come to market. Not only Amazon Fresh et al (to compete with the Blue Apron model), but restaurants *have* to get into the game once there's (a) scale and (b) someone builds an efficient overlay for them.

One of the most exciting areas [at least for me... I've started working on the idea a couple times and always get pulled on to something else] is to incorporate consumer control/creativity in the process. There is true joy in cooking - especially the creative expression and getting recognition for that. But of course most people aren't very good at cooking and the purchase, prep and cleanup make it a non-starter for most. But combine efficiency and low cost with creativity and that's worth building a core competence in.


Ben Brooks Head of Product at VolunteerSpot, Inc.

September 15th, 2015

There are a number of players in the on-demand food delivery market, so would be helpful to understand which model you're focused on or is the question related to which business model do we think is best?

You have Doordash and Postmates who will deliver food from any restaurant, regardless of whether they have a "relationship" with the restaurant.

On the other hand you have GrubHub, Eat24, Caviar and others who only deliver from restaurants they have a relationship with

Then there is UberEATS, which partners with a handful of restaurants and offers one or two dishes from each. I believe they basically load up their drivers with the meals and drive around waiting for orders vs. receiving orders and picking them up from the restaurant/kitchen

Chewse is office focused meal planning and delivery.

Blue Apron delivers ingredients and recipes, so the user is still preparing the food.

Munchery delivers food from a limited menu that they create and cook themselves.

I believe Spoonrocket is similar.

Hoofar Pourzand

September 16th, 2015

Your scalability and specialization at the same time. You have to have "focus" in some sense and at the same time be able to scale that up. Food delivery is relatively a low margin business for the most of the business models that were mentioned in the past posts. With high fixed labour costs in every cycle of the service this overhead would stress most starters out of their initial conviction. I'll be happy to give you more ideas if you have a more clear model to discuss. (My response here is not a hypothetical one- I actually do on demand delivery with a team of 16 delivery staff in food services but we have also studied most of the current competitors' business models).

David Still Founder of Start-ups, Entrepreneur, Financier and Advisor

September 15th, 2015

Branding, positioning and customer care - and live up to EVERY promise ever made to a customer. Customer is King and Queen. Make every customer pleasantly surprised every time they get a delivery so they say "wow" - every time (QVC model). Every satisfied customer will ultimately communicate good things about you to 64 other potential new customers and vice versa for bad experiences- per studies. Also, personally as CEO drive with the delivery truck and meet different customers a few times a month. Tasty Baking successfully did this for decades. Check out how Nordstrom's does it. Good luck.

Andy Horvitz

September 16th, 2015

Michael:  That's why I parsed the differentiators into both customer and business viewpoints.  You're right about the customer sentiment, but since the OP was inquiring as to differentiation among the businesses, those that succeed will be the ones who scale efficiently.  

Yes, product comes first - which is both food quality, value, and fast delivery (efficiency).  But one can't overlook $.30/meal at the scale the businesses operate.

Michael Brill Technology startup exec focused on AI-driven products

September 16th, 2015

Ben, I also agree that horizontal delivery companies are more interesting... although I just don't care who delivers my pizza any more than who delivers my Amazon shipment.

But I think we are far away from actually having defined a great product. That is, having a restaurant prepare a meal, put it in a box, sit around for 5-10 minutes, have it picked up, put in a car, driven across town, knocks on my door, I open it and it's a 30 minute old dish that is nowhere near the quality it was if I sat down in the restaurant. And I get to pay full retail for that experience. Given that option, most Americans will choose to go out to dinner where they get an experience, an escape.

Does anyone have numbers for restaurant delivery trends? What does today look like compared to 5 years ago? I'd bet there is very little variance to the existing trend... at least outside of a few on-demand bubble geographies.


Ben Brooks Head of Product at VolunteerSpot, Inc.

September 16th, 2015

Also, Michael some of the players in this broad space will deliver anything from any restaurant, so the idea that the food being delivered doesn't compare to what restaurants offer doesn't apply to everyone. 

As Hoofar alluded to we need to focus on one model before we can effectively discuss what we think the key differentiator is in that space. 

Sadie - What is your focus? 

Personally, I'm most interested in companies like Doordash, Postmates, etc. who are focused on delivering anything. UberEATS is interesting in that they partner w/restaurants and offer a limited number of on-demand options. 

I think the key for consumers will be customer service, which encapsulates quite a bit but making it easy to order, delivering the food in good shape (temp, not smashed, etc.), communicating via the app or directly w/driver and having a generally positive experience is critical. 

If I can order the same pizza from Joe's Pizza Shack from Doordash or Postmates whoever delivers faster and makes the experience more fun and/or easy probably wins. 

The other half is the relationships with the restaurants and making sure they are willing and happy partners. That appears to be a challenge Doordash and Postmates are still trying to figure out as if they are truly going to delivery anything it is impossible to establish relationships w/every restaurant up front, but how do you react when an angry, confused restaurant calls you up and asks why you're using their logo, an old menu and sending in people to pick up food for other people and nobody is tipping their waitstaff? 

Gilbert Stouvenot www.finefoodtogo.com President/Chef/ at Fine Food-to-Go, Inc.

September 16th, 2015

Michael, A restaurant kitchen is not designed exactly for that purpose and you will always have to pay for the dining room facilities which you are not using.
My system does exactly what you describe. Just sit down and enjoy, it's hot, freshly prepare by top professional Chefs in a FPC (Food Production Center) especialy design as a banquet production, the most profitable in the food industry.
Very profitable applying the standards 25-25-30-20.
25% food cost
25% payroll
30% general exp.
20% profit

Michael Brill Technology startup exec focused on AI-driven products

September 20th, 2015

Gilbert, a house wasn't designed exactly for renting out rooms and cars weren't designed exactly for people hopping in the back and paying you. Just don't tell Airbnb and Uber. ;-)

Speaking to the Blue Apron-ish model, what I'm suggesting is maximizing utilization from existing commercial kitchens - a restaurant, a grocery operation, a commercial kitchen, etc. I don't care about dining rooms or parking lots... those are already sunk/fixed costs.

Why is it so hard for a standard restaurant kitchen to double their food orders and prep work? They're not adding material demand on space or human resources during service - that's what people do at home because that's part of the product.

And this model provides maximum options for consumers. As a consumer, would you rather have the option to try a half-dozen dishes from 100 local restaurants or do you want to be told that you're having one thing because that's what some central food processing service needs to do in order to scale their business.

While there (currently!) isn't a solution that a restaurant can plug into, and demand is still quite low relative to traditional restaurant/grocery options.,hese will change.

I do believe there is rationale for some limited number of dedicated facilities... I just think the bulk of the market will be served by enablement of existing entities.