Delivery channel evolving to meet changing customer expectations

The home-delivered meal once comprised a relatively small section of the foodservice market – but the rise of third-party online order platforms like Menulog, Deliveroo and Uber Eats has changed all that. No longer do you need your own fleet of delivery vehicles and drivers, or even staff to take orders over the phone. Instead, these third-party providers send the order straight to your business – and some (not all) use their own drivers to pick it up and deliver it to the customer.

Today the worth of the online food delivery market in Australia is estimated at more than $2.3 billion, with 14 per cent industry growth predicted per year. Around 70 per cent of Australians order food online and up to 89 per cent of millennials have embraced it, which some see as a guarantor of future growth.

In Western Europe, where online ordering has been established for longer than in Australia, pundits can foresee a future where all foodservice businesses – even top end restaurants – generate a portion of sales from home delivery, thanks to the ubiquitous presence of third party delivery drivers.

But there is a backlash brewing against this delivery model as it currently stands – driven by restaurateurs and foodservice professionals who claim that third-party order platform operators are exploiting them. The issue is the commissions charged by the order platforms, which can be up to 30 per cent of the cost of a meal. One business Foodservice Rep spoke to on condition of anonymity said “We can’t afford not to use Menulog and Deliveroo because of their profile, but their commissions are too high for the amount of business they bring us. Unless you’re generating a massive amount of orders through their platforms, it’s hard to see the value in it.”

This attitude has led to a concerted effort from some foodservice professionals to encourage customers to order only from those businesses with their own dedicated fleet of delivery drivers, rather than those using third parties – and have even launched social media campaigns to promote the concept.

Partially in response to this, and in a bid to undercut the major third party players, there’s a new delivery model now emerging into the market: subscription-based order platforms, where customers pay a set fee per month and can order as many times as they like. The platform suppliers argue that this will encourage them to order more food more often so as to get maximum value from their subscription. But their longterm viability will depend on whether they can keep customers engage through promotional incentives and plenty of food choices.

Sophisticated GPS tracking now enables you to know where your delivery drivers are in realtime, helping you to plan your cooking times to ensure that your meals are ready to leave your business just as your driver arrives to pick them up. You can also use it to work out optimal delivery routes, estimate timeframes and even measure driver performance through the recording of total delivery time from departure to return. Live tracking software even enables you to share information with your customers in realtime, such as via a smartphone app.

For those don’t want to go to the expense of creating their own app, even simple GPS software can still provide valuable business benefits. By installing a GPS tracking key in your delivery vehicles, you can optimise vehicle routes and fuel consumption. This portable tracker records speed, route and number of stops per journey, so by analysing the recorded data you can see whether drivers are using the best routes or driving economically, then make changes to boost efficiency as necessary.

All this evolution in what was once a straightforward market channel has naturally not been overlooked by major foodservice suppliers, with products increasingly being marketed as a perfect fit for delivery. Of course, not all food travels well – and packaging innovation is the next area of likely growth, with packaging and food suppliers working on creating solutions to ensure meals can reach customers in better condition.  

As an example, Simplot has expanded its already extensive line of Edgell Supacrunch Chips with a Delivery Chip described as “crunchy to the last bite”.  Key to its success is not only a superior hold time – up to 40 minutes during the delivery window, and a whopping 60 minutes under heat lamps – but also a state of the art chip delivery box designed by Detpak, with a raised base to lock in the chips’ crunchiness, vents to release steam to stop them from getting soggy, and a tamper proof seal as a guarantor of quality.

“A lot of R&D has gone into the product,” says Simone Smith, Product Manager – Potato at Simplot Foodservice Australia. “Our batter supplier in the US worked on it for at least a year and we’ve conducted extensive sensory testing over the last six to seven months along with three factory trials to make sure it was just right. We wanted to ensure it would stay crunchy for 40 minutes and we tested that simulating the entire delivery process – we cooked it, put it in a box, bagged it in a delivery esky and then delivered it.” Expect to see more of these kind of market-driven solutions in the future.