Tuesday, March 23, 2021

Food Delivery Aggregators Work


Grocerant niche growth is growing around the world at an unprecedented rate. In fact a report out last week from Paytronix Systems, found that consumers spent a collective $769 billion ordering food from restaurants last year, with 63% of that — or $486 billion —consumed at home.

Of the $486 billion, 89% was ordered via desktop websites, mobile apps and aggregator apps, the report found. Additionally, 61% of digital food orders in 2020 was spent at restaurants that had only offered dine-in service before the pandemic. The report also found that consumers spent 50% more on average when they placed orders online for takeout.

That said, Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® as many of our regular readers of this blog know sold the first 7 national accounts to restaurant chains in the US back in the day for the fist national aggregator CyberSlice, CyberMeals, evolving into Food.com. Johnson firmly believes is the power of aggregators as a valued consumer touchpoint or as he often reminds us it a favorite rest stop on the information super highway.  If you’re not on the highway you or the side roads or missing all the action.

 Just EatTakeaway.com is prioritizing lower fees and fully employed drivers in its European markets as it focuses on growing share of stomach worldwide.  

Just Eat Takeaway.com (JET) on Wednesday laid out its plan to gain market share by expanding its delivery network, investing in customer acquisition and lowering fees across its 23 global markets—which will soon include the U.S.

The Amsterdam-based delivery company is in the process of acquiring Grubhub in a $7.3 billion transaction set to be completed in the first half of this year. And the strategy detailed on JET’s 2020 earnings call with investors provides a glimpse at how it might approach the new market: namely, growth at all costs.

In the U.K., where JET is the market leader by transactions, that has included adding big brands like McDonald’s to its platform and then offering delivery at a lower price than its competition.

CEO Brent Adriaan Wissink stated, “One of our pillars of our delivery strategy is to be the price leader in our industry,” … “This means offering lower delivery fees across our markets compared to the competition, including free delivery.”

In the U.S., where delivery and service fees vary by market and providers woo customers with frequent deals and promotions, none have emerged as a clear price leader.

So, JET, which like Grubhub began as an online marketplace for restaurants that typically provided their own delivery, has also been working to grow its own driver network. Under that business, called Scoober, drivers are considered full-time employees. They are paid a set hourly wage and receive benefits such as paid sick days, holiday pay and electric bikes for doing deliveries in urban markets.

That is different from the prevailing driver model in the U.S., where third-party delivery drivers are treated as contractors. JET now employs 20,000 Scoober couriers and plans to expand the model to all of its European markets.

Those investments contributed to a loss of 151 million euros ($181 million U.S.) in 2020 on revenues of 2.4 billion euros ($2.9 billion U.S.). But executives emphasized that JET will continue to prioritize market share over profit.

COO Jorg Gerbig, stated, “We believe that market leadership is critical to drive sufficient scale, order density and network effects to enable healthy delivery margins in the long run, and we are best placed to achieve that and, therefore, further investing in driving our market share,”

While executives declined to comment specifically on how that strategy might apply to Grubhub, JET CEO Jitse Groen said, “We essentially do the same thing everywhere, right? We don't have a different strategy in the U.K. than we have in Germany.”

A Grubhub spokesperson also declined to comment, citing the yet to be completed transaction. Leaders at the company have previously signaled a business-as-usual approach once the deal is official.

Once the market leader in the U.S., Chicago-based Grubhub has seen its share slip in recent years as competitors like Uber Eats and DoorDash have grown. In January, it accounted for 17% of meal delivery sales in the U.S., well behind leader DoorDash at 56%, according to SecondMeasure. Consumers are dynamic not static your company must be as well.  Food Delivery Aggregators Work they are a valued touchpoint in the hand of the consumer.

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success


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