Never Waste a Good Crisis: Why the Market is Perfectly Poised for Delivery Kitchens
Churchill once said that crises were a watershed for growth – and in the delivery kitchens market we have reached a pivotal, watershed moment. The huge cultural shifts that have taken place, the disruption of technology, and, of course, the pandemic, have created a perfect moment for growth within our market.
The first delivery or dark kitchens appeared in the UK in 2015, when I helped Deliveroo to launch them in 2015 with the very first ‘RooBoxes’. We thought it would eventually become a huge trend for the food and hospitality – and this year we’ve started to see that vision come to fruition.
What elements have fallen into place to create the perfect moment for delivery kitchens this year? Below I outline my thoughts on why the market is ready now for a big shift towards delivery-only kitchens and the difference this will make to the hospitality market.
Delivery apps have come of age
The proliferation of delivery apps today – Deliveroo, Just Eat, Door Dash and more – have made eating-in a pleasure and an opportunity to try new delicacies and flavours that weren’t there before. Restaurants that never did takeaway are now on these apps, providing greater variety, quality, and easier access to top quality food.
People expect more when ordering takeout, and when they find something they like, they’ll order it more often.
Quality drives demand. The demand is definitely there, and it’s growing.
The pandemic boosts delivery-only
By now we’re used to hearing about how ‘the pandemic has changed everything’, but with food delivery, it didn’t change everything, it simply accelerated and supercharged a trend that we’ve already outlined above. Delivery was already growing in popularity, but the pandemic accelerated it in a way few could have ever imagined.
Customers turned to delivery to bring a little indulgence into their lives – those who had never considered using a delivery app downloaded them in their millions. Once a thing is done once, it’s easier to do again, and the pandemic has effectively increased the total addressable market of delivery only kitchens – the opportunity is bigger now than it has ever been, worldwide.
In fact, Big Hospitality revealed recently that the British delivery only industry has reached £11billion this year down to the pandemic – an illustration of its phenomenal growth over the last 12 months.
Hospitality needs a new model
The hospitality industry has been struggling on the high street for a while – large setup costs and long development times make setting up your own restaurant an expensive and risky business. You need a lot of capital to even consider setting up your own restaurant.
This has been the way for a long time, but the last few years have been hard on the high street in general, and some very large restaurant businesses have begun to struggle due to falling footfall, high rents, and even higher business rates.
After the pandemic, the risks of setting up a restaurant or foodservice business are even higher. Which means, delivery kitchens, with low (sometimes even no) setup fees and quick setup times make them a much more attractive proposition.
‘Virtual’ brands can now be conceived, designed, and launched in a few months – and scale to multiple sites in a few more. As the market develops, these ‘virtual’ brands will be able to open physical destination locations after developing their name and building up the capital to launch in a brick-and-mortar site.
Delivery only opens the doors to new tastes and menus
Customers now demand choice in every area of their lives – and food is no different.
This fragmentation means that there is a niche for many more styles of menu and ethos of production. Whether a customer is vegan, interested in fitness and wellness, determined to indulge in something naughty or wants a nostalgic, traditional dish, they expect to find it online. When they do find it, they are now more empowered to share it on social media, or through private messaging apps with friends.
Delivery kitchens benefit because a focussed, well-designed menu is all you need with to launch a niche brand out of a delivery kitchen. You can also launch multiple virtual brands out of the same site, reducing costs and increasing your chances of success.
The beauty of the delivery kitchen concept is you can focus on a specific niche with few overheads and build a reputation and vital customer data to refine and build a brand.
This feels like Delivery-only kitchen’s moment – the digital shift in people’s lives, the pandemic, customers’ need for variety and niche foods, along with the pressure on the hospitality industry are all coming together at the right moment to create demand for the solution dark/delivery only kitchens provide.
With the right kitchen and access to delivery apps that are growing in popularity, there has never been a more opportune moment to look at Delivery kitchens to build a new hospitality brand from scratch.