Reusable restaurant packaging startup DeliverZero is on the cusp of some notable changes in its business model that will play on consumers who are very enthusiastic about getting food delivered in reusable packaging.
Today, the company has two basic models and about 200 restaurant partners in New York City and Colorado. In the first model, a restaurant puts food in reusable containers and washes them in their dishwasher upon return; though customers can also drop containers off at any point in the DelierZero network. With the second model, DeliverZero picks up the containers and does the dishwashing at a central facility.
Overall, the company claims it can save restaurants about 40 percent on packaging costs, according to CEO and co-founder Lauren Sweeney. She’s quick to point out the the full-service fee of 25 cents per package is much less than the typical 40 cents for a standard single compostable package. It charges 7 cents per package if a restaurant handles the dishwashing.
Sweeney said New York restaurants trend toward washing their own dishes because they don’t want a collection bin in their premium-rent locations, while Colorado restaurant have trended toward the central facility and the additional fee per container.
The company is passively growing with ideal customers, but Sweeney said she’s especially excited about what comes next: new markets and a robust technology layer on top of the core reusable-container service. Firstly, the company is extending into Chicago with a dishwashing facility and is starting to sign on restaurant partners.
The technology layer has Sweeney even more excited because of its potential to help grow the company.
“Since I took over as CEO in March, I took over with the understanding that we need a new product that builds on our learnings. Without that product in place, there was no use in scaling the number of partners. So, we’ve been head down for the last six months,” said Sweeney.
She and the team are just about to reveal an API and marketplace, the former to simplify the logistics for the company and restaurants, and the second to unleash the flood of customers who are excited about reusable packaging.
The API will automate away many of the manual processes that make reusable options cumbersome to scale, namely keeping close track of reusable packaging in partner restaurants. It also allows the company to make containers available through other platforms with full transparency.
The physical bulk of reusable has proven a barrier for the category. While the reusable packages from DeliverZero are designed for “maximum stack-ability,” keeping a restaurant stocked with just the right number of packages has been important.
DeliverZero’s marketplace will give enthusiastic customers a way to browse. It’s already operational, but the company is working on new integrations that will go live later this year.
“Eighty six percent of our customers ordered form a restaurant they never tried before because of us. That’s crazy,” said Sweeney. “The fact that people will let the packaging drive their ordering decision is crazy.”
That behavior has been a meaningful driver of new and truly incremental business for restaurant partners on top of the day-to-day savings. She said that halo may not last forever, however.
“I think the real opportunity is being one of the first to capitalize on the consumer enthusiasm. That’s what I hear from our platform partners. They love the impact, they like to be the first mover and have their brand associated with doing this before they were forced,” said Sweeney. “There’s a glow around that. Operationally, it’s surprisingly easy to incorporate reusables. If they’re doing to do it, they may as well do it sooner and get the brand advantage.”
Hear more from Sweeney at the Food On Demand Packaging Summit this September 26 and 27, and to get a sneak preview of the company’s new packaging that will hit the market next year.
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