However, unit economics are still a big issue for food delivery marketplaces. Based on a high volume / low margin model, platforms struggle
to earn money without grasping the margin on both sides (restaurants and delivery agents). Cloud kitchens is an enticing solution as the model is highly more efficient from a unit economics point of view: data-driven supply, lower rents, optimized marketing, sound logistics, etc. Some traditional restaurants may turn to dark kitchens to take advantage of the model’s benefits. Future will tell.
> 🛍️ Grocery delivery is having strong tailwinds. For too long, the online grocery delivery experience has been terrible. On one hand, traditional retailers uploaded their whole inventory online, which was not user-friendly at all. On the other hand, small players tried to penetrate the space but their offer was either too small, too expensive, not attracting, too slow on delivery or/and limited to urban areas.
However, the pandemic could be the turning point. In reality, the space was already expected to grow fast in the coming years: +66% by 2023 according to IGD. While a lot of people used to like going to the supermarket, it is not so sure in the post-covid era. Although temporary, the lockdown will change habits that were once deeply rooted. Online grocery is all set to boom and players in the industry know it: “The opportunity is so massive that I expect more competition” said Oscar Pierre, CEO of Glovo.
The model that will be adopted for grocery delivery is still to be determined. The entire industry -from food producers to supermarkets to e-commerce veterans to marketplaces to delivery agents, etc.- will have to adapt to meet this new demand. Some recent news in the space:
, which develops a solution that aims at disrupting the supply chain in the food industry, just raised
additional $30.2m at a $250m valuation
. The company will leverage its network of food suppliers to make their products directly available to end customers through a D2C platform
rather than restaurants as those remain closed. The company was founded in 2018 and is backed by Bessemer
, Target Global
a partnership with Uber Eats
in France to have its products delivered at home via the platform. Uber Eats saw its demand for groceries surge
by c. 60% between February and March in Europe. Today 1,000+ grocery and convenience stores are available via Uber Eats in Europe.
Paris-based Jow raised $7m from Stride.vc, DST Global and e.ventures last November to revolutionize the e-grocery experience.