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Here's What We're Watching in the Food Delivery Space

When it comes to news about the COVID-19 pandemic crisis, it seems that there has been no shortage of news regarding the food industry. First, it was masses of people stockpiling and leaving consumers without access to fresh fruit and vegetables (and we won’t even talk about the toilet paper situation), which left grocery stores struggling to keep up with never-before-seen levels of consumer demand. 

Next, restaurants slowly began to shut down, as more and more cities required total lockdowns or quarantines. Then, we started to see local farmers struggling, sharing pictures of crops, milk, and more going to waste. 

And while many say that the industry spanning shifts away from brick and mortar retail and toward more direct to consumer routes, such as food delivery, there is no arguing that the coronavirus pandemic has definitely sped up this curve. With many states, counties, and cities continuing to keep certain nonessential businesses closed, many restaurants remain closed except for takeout and delivery. 

Further, many consumers are trying to stay home as much as possible, limiting their exposure to others in attempts to limit the spread of the virus. These trends combined may actually lead more consumers to skip pickup orders entirely, potentially pushing them to online orders and food delivery services. 

With this in mind, here’s what we’re watching in the food delivery space for 2020 and beyond. 

Millennials are the key drivers

Among food delivery services, Millennials are definitely the target audience, given that they spend the largest portion of their budget on prepared food, when compared to any other generation. With busy and fast-paced lives, and bigger spending power and disposable income, food delivery services are perfect for Millennials. In fact, Technomic’s Generational report showed that in 3 out of 5 cases, Millennials choose to order food delivery or visit their favorite restaurants for takeout. 

New channels of delivery

Once they encounter a poor customer experience, nearly 2 out of every 3 American consumers report that they would abandon their digital take out order, and more than half report wanting an easier way to order online. As a result, savvy food delivery services are simplifying the ordering process and allowing their customers to order in a number of different ways, whether through an app, social media, virtual assistant, smart devices, and more. 

Contactless delivery options 

Forget the delivery driver just leaving your order at the door and ringing the doorbell, we’re watching all of the modern delivery options these companies are coming up with as a result of a limited human labor force. Not only are modern delivery options faster and more efficient than humans, they can also help significantly lower operational costs. More and more, we are seeing delivery services utilizing robots, drones, self-driving cars, and even parachutes to help with their deliveries. 

New niches are emerging

We are also seeing more food delivery services focusing on niche areas. We’ve long seen vegan or other plant-based boxes, or even companies that deliver nothing but burgers or organic meats, but today’s companies are taking this trend a step further. Expect to see more food waste delivery apps popping up, as well as more companies that specialize in pet food delivery, or even platforms that utilize a virtual kitchen for their consumer experience. 

Food delivery services are big business and one that is not going away anytime soon. Don’t believe us? Just Eat Takeaway recently outbid Uber to buy Grubhub for more than $7 billion, giving the European food delivery service a strong footprint in the United States. As more emphasis is placed on these types of services, you can expect to see continued innovation in this evolving space. 

 

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