April 17, 2019 |
The Dutch town of Bodegraven installed pavement lights at pedestrian crossings to help people using their smartphones to cross the road properly. Apparently they have invented an automatic arse-wiping machine too.
Whilst the marketing message to millennials (other users of smartphones are available) is that convenience is both at your fingertips and on your sofa, the message is somewhat confused by the rise in online cooking videos, body coaches and gym memberships. So what exactly does today’s consumer want?
According to Pentallect, a food industry strategy firm, the third-party food delivery market was valued at US$8.5 billion in 2017 and is expected to grow by 45% until 2022, slightly less than the growth of groceries delivery over the same period. So whilst convenience clearly appears to be the main driver of today’s consumer behaviour, grocery deliveries are holding their own and growing at a slightly faster pace than the restaurant meals delivery, even though the latter’s absolute value is greater. So consumers, perhaps driven by a desire to be healthy and know more about their food, are still interested in cooking. They are just not interested in going to the shops to select their produce as the total food industry is only growing by 3% compared with the delivery service growth of 13.5%.
So what does that mean for the future of the total food delivery market? A currently diffracted marketplace has large aggregators such as Deliveroo, Uber Eats and Ocado competing with the direct suppliers such as Carrefour Online as well as smaller companies vying to build up marketshare with the sole desire to be bought out.
Everyone needs to eat, just that less and less people can be bothered to get up and go to the shops. It is much easier to pick up your device, swipe, tap and behold your order turns up at your doorstep. Everyone is doing it – from Gen Z to Baby Boomers.
So the logical next step is for the big boys to meet in a clandestine manner, possibly in the forests of Oregon, and develop a plan that is sold into both the media and the consumer as being a great thing. One of the big restaurant delivery companies will merge with one of the big grocery delivery companies and create a super-delivery service. The inevitability is that the M&A teams will go into overdrive and create one supersized delivery behemoth that owns the food delivery space. Or just watch out for Amazon as it just takes over this industry too.
Like a lot of these things, the consumer will be blindsided by convenience and marvel at the fact that one can order their groceries and their evening meal from the same service. Aggregation appears to be the key to creating convenience and so this would appear to be a logical step. The fact that the data generated from this merger would be more than twice the value of the separated data is probably not relevant to this article, but remains a fact nonetheless.
The use of drones and future personalised air transportation will make the delivery of this aggregated food supply a lot easier in the future. So city dwelling, yoga bending, vegan millennials can enjoy this service to ensure that they don’t miss anything on Netflix.
Whilst the growth curve is steep, the delivery market only accounts for 0.01% of the total food industry and with convenience not going anywhere soon, it would be a safe bet to assume that this share will increase over time. Unless anyone new with vast sums of VC funding buys up all the small fry and creates a new delivery company, I think it is only a matter of time before Uber and Amazon swallow up the competition and go head to head to win over the customers’ stomachs.
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