FOD International is a new focus on the international delivery market, and how it differs from North America. Contributing editor Peter Backman is a long-term foodservice sector guru and founder of theDelivery.World, a platform that connects the delivery sector and makes sense of the myriad changes and challenges that affect the sector across the globe.
Peter Backman is a long-term foodservice sector guru and founder of theDelivery.World.
Convenience-driven restaurant delivery has swept across continents, with Europe and the United States leading the way. In many respects there is little difference wherever you look—the same dynamic growth, the same challenges and, in some respects, the same names.
But there are differences, too, and to help understand that let’s take a look at the European market.
Europe boasts a huge population of 810 million, dwarfing the USA’s 325 million. And although the USA has a slightly smaller GDP compared to Europe ($19.5 trillion against $20.9 trillion), GDP per person tells a different story: $59,900 in the USA versus $26,400 in Europe. These figures paint a broad economic picture that holds significant implications for the growth potential for restaurant delivery.
At the heart of the European restaurant delivery industry lies an impressive market with Gross Transaction Value (GTV) valued at over $60 billion. Three major players dominate delivery—Delivery Hero, based in Germany has a 29 percent share, UberEats is second with a 25 percent share, and Just Eat Takeaway, based in the Netherlands, has 21 percent. UK-based Deliveroo is the fourth largest and Doordash, following its purchase of Finnish company Wolt, is the fifth largest. Each company is found in several of Europe’s 40 plus countries, but only two or three companies are found in any single country.
But despite its impressive size and the capabilities of delivery companies, the sector faces its fair share of challenges.
A pressing concern is the lack of transparency that often plagues the delivery process. Restaurants that cook the food are frequently denied information about which customers they are serving and what they are ordering.
And then there is the notable fact that profitability is a challenge for delivery companies, while restaurants are often denied any meaningful profit from delivery.
Kitchens are now operating not just to serve in-house customers but also to fulfil a growing number of delivery orders. This shift to ghost kitchens demands operational adjustments, from packaging to delivery logistics, to ensure that the food arrives in pristine condition.
On the customer-facing side, restaurants are grappling with maintaining the dine-in experience’s quality in a delivery setting. The challenge is to replicate the ambiance and taste that diners expect, within the confines of a delivery container.
These are major challenges which raise concerns about the long-term viability and financial well-being of the sector across Europe.
But amid these challenges, the resounding truth remains that customers are increasingly drawn to the allure of convenience. In today’s fast-paced world, the demand for having everything delivered – from gourmet meals to daily groceries—is stronger than ever. The onus is on the industry to rise to the occasion and deliver quality experiences that meet these expectations.
While challenges abound, several sectors stand poised to reap substantial rewards in the restaurant delivery arena.
Demand for ghost kitchens designed specifically for delivery orders, despite growth pains is growing apace across the continent. Property owners and developers who invest in creating shared kitchen spaces are capitalizing on the trend.
Meanwhile, demand for virtual brands, although also suffering growth pains, is being driven by companies like Peckwater in the UK and Taster in France that are building an armoury of brands designed for restaurant delivery.
But ultimately, the backbone of successful restaurant delivery lies in technology. Systems that seamlessly communicate, inform about the status of orders, and link the many aspects of the delivery process are indispensable. Companies that innovate in this field, creating efficient platforms for both customers and restaurants, are prospering.
In conclusion, the trajectory of restaurant delivery in Europe is intrinsically tied to the shifting demands of modern consumers. Despite the challenges, the allure of convenience and the growing appetite for delivered experiences ensure that this industry’s potential remains vast. Navigating this culinary frontier in Europe requires a delicate balance of innovation, transparency, and adaptability, offering a promising future for those who can master the art of delivering dining experiences to doorsteps.
