Food Delivery Companies: Will It Be Survival of the Biggest?
The recent $10 billion merger between Just Eat and Takeaway.com, creating one of the world’s biggest online food delivery firms, is a logical, and unsurprising move. Perhaps as predictable as its new name: Just Eat Takeaway.com.
The strategic deal between the two European-born companies is further evidence that consolidation is on the rise in the food delivery sector, a space where scale is vital to survival.
The food industry has turned several corners in recent years, and no segment is growing faster than online delivery.
In 2015, for the first time, Americans spent more money at restaurants than at grocery stores. In urban areas such as New York and Chicago, restaurants are commanding a larger share of the retail budget than ever before. In Manhattan, food service locations have been responsible for more commercial leasing than clothing stores and banks combined, and it isn’t showing any signs of slowing down.
Next year, it’s predicted that more than half of restaurant spending will be outside of an actual restaurant; deliveries and takeaways will soon overtake dining inside bricks-and-mortar restaurants. In a literal and somewhat ironic sense, restaurants have now become more of the place you buy food to eat somewhere else than the grocery stores themselves.
Previously, food delivery was dominated by pizza and Chinese food, but that too is changing. Where pizza used to amount for 60% of deliveries, that number is declining every year thanks to a wider choice on offer, from higher-end fare to global cuisine, and nearly one in four Americans are choosing to have food delivered last year.
And e-commerce has allowed consumers to choose convenience above anything else, and that’s where the real value lies.
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