The proportion of meals being ordered online – from restaurants, central kitchens or grocery stores – is now rising at such a pace that according to market research firm Euromonitor, the average urban household will likely order more meals than they cook before the decade is out. With this in mind, Salima Vellani, Founder of Kbox takes a deeper look at the restaurant & hospitality industry.
It is the most profound change in food production and distribution for generations, and it’s happening all over the world. It’s the reason why, as traditional hospitality continues to battle the devastating impact of the Covid-19 pandemic, the delivery market is currently predicted to be worth £1tn globally within the next 15-20 years, according to Euromonitor.
And it’s the reason why all kitchen owners must be looking at how they can get into food delivery to supplement their income and safeguard their business in the uncertain months ahead.
The Need For A New Delivery Model
The food delivery market has its problems, not least of which are the monetisation and labour force challenges faced by the delivery providers themselves. But for kitchen owners, there’s a more fundamental challenge. Of the 100,000s of commercial kitchens worldwide, most of them are unprofitable or falling well short of their true utilisation and revenue potential.
It’s a situation that the industry has tolerated for too long – with business owners over-extending themselves by opening too many venues and too many kitchens. These shortcomings have already been exposed within casual dining. In food delivery, it’s a model that is even more inadequate, given that the average delivery kitchen serves just a 2-4 mile radius.
Goodbye One-Brand One-Kitchen
The world does not need more kitchens. And fortunately, we’re now seeing fundamental changes in the thinking behind food production and distribution.
Savvy kitchen owners recognise that they can reconfigure their kitchens to support the preparation of multiple food brands. They realise that delivery customers simply don’t care which kitchen prepares their food, providing the food itself is high-quality, well-presented and delivered on time.
It is a breakthrough for our industry because it blows up the one-brand one-kitchen mentality that has constrained operations for decades.
On a basic level, it means hospitality operators can prepare one food ‘brand’ for their casual dining customers and prepare a completely different brand to serve via delivery. In fact, if they’re smart about it, they can serve five or even ten different brands for delivery without buying new kitchen equipment, expanding their space or hiring additional team members.
This isn’t pie-in-the-sky thinking – it’s a case of licensing easy to prepare food brands and using innovative technology to improve how each kitchen is run. And it’s a trend already taking off within venues across the US, in the Middle East, Australia, and throughout the UK.
Taking Brands Further Afield
As we encourage more venues to reconfigure their kitchens for multi-brand use, we also make it possible for restaurant owners with highly regarded food brands to expand into new markets – without ever having to invest in additional properties.
If you have a kitchen, a respected brand and a capable chef, licensing your menu out to other kitchen owners could be a lucrative new revenue stream that also bolsters the performance of your existing restaurant through increased brand recognition.
Revitalising Your On-Premises Offering
Conversely, many kitchen owners are finding that their new delivery brands can also inform what they serve up in their physical premises.
Operators often struggle to keep their on-premises menus fresh in the face of increasing competition. Many of them are reliant on their chef to drive this innovation, rather than taking their cues from what local customers are demanding.
But with multi-brand food delivery it’s possible to access a real-time feedback loop on how different items are performing, helping to anticipate new trends and spark inspiration for innovative menu ideas. This approach takes the pressure off the chef, and possibly even negates the need to keep an experienced chef on the payroll, as good delivery brands are designed for ease of preparation.
Ultimately, it’s a question of choice and empowerment – giving kitchen owners more options about how they approach both their delivery and on-premises offering.
Letting Consumers Lead The Way
There’s also evidence of broader consumer trends that restaurant and hospitality operators must factor into
How people look after themselves, their ethics, and their environmental concerns are all impacting food consumption. For example, one-third of the UK population is experimenting with flexitarianism – in the US, it’s a similar percentage. Major UK retailer ASDA recently reported a 175 per cent year-on-year increase in vegan searches on its website.
We are on the brink of a vast new wave of food innovation as food creators clamour to meet emerging demands for plant-based menus, vegan meat and dairy alternatives, for home meal kits and for higher quality and sustainable ingredients.
These products all need to be prepared locally, or the on-demand distribution model simply does not work. And this is where I see the long-term opportunity for the restaurant and hospitality industry. Because whether you’re a subscription-based meal kit provider, a celebrity Instagrammer or a start-up food laboratory, the one thing you’re not going to be able to do yourself is open thousands of kitchens.
For our industry to thrive in the post-Covid-19 world, we need to break down traditional conceptions of food production and distribution and put existing kitchens to better, more profitable use. It also means adopting technology that gives local kitchens real-time insight and data into what nearby customers want to eat.
Technology focused on better utilisation of assets and creative ways to enhance revenue streams represents the clearest path to the long-term prosperity of our industry. But we are still at the start of this journey, and we will only accelerate once operators break with the one-brand mentality and embrace a multi-brand, tech-optimised future for