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.
The food delivery landscape continues a dramatic transformation as restaurant delivery and rapid grocery delivery services increasingly overlap. This convergence is reshaping consumer expectations and business models globally, driven by technological advances, changing consumer preferences, and the aftermath of the covid pandemic.
Traditionally, restaurant delivery focused on prepared meals, while grocery delivery dealt with raw ingredients and household items. However, the rise of rapid grocery delivery – promising deliveries in as little as 10-30 minutes – has blurred these lines. Companies are now racing to offer comprehensive food solutions that cater to immediate cravings and longer-term pantry needs.
Asia has been at the forefront of this convergence. In India, food delivery giants Swiggy and Zomato have expanded into grocery delivery, leveraging their extensive networks and technology. Singapore’s Grab offers both restaurant meals and groceries through its super-app, providing a seamless experience for users. In China, Meituan has long provided an integrated platform for various delivery services, including both prepared food and groceries, setting a model for others to follow.
In China, Meituan provides delivery of various services, including both prepared food and groceries.
In the United States, DoorDash expanded beyond restaurant delivery with the launch of DashMart, offering groceries and essentials. Uber Eats integrated grocery delivery into its platform following its acquisition of Postmates. Meanwhile, rapid grocery delivery startups like Gopuff were launched in the years leading up to covid.
Europe has seen similar trends, with companies adapting to local markets. In the UK, Deliveroo, primarily known for restaurant delivery, now partners with supermarket chains and has launched Hop, a bricks-and-mortar high street location for walk-up and grocery delivery. This move demonstrates the company’s commitment to diversifying its offerings and competing in the rapid grocery delivery space. In France, Deliveroo has also partnered with supermarket chains to offer grocery delivery alongside its restaurant offerings.
Germany saw Delivery Hero’s Foodpanda launch its own rapid grocery delivery service, while the Netherlands-based Just Eat Takeaway.com has ventured into grocery delivery across multiple European markets.
Several factors are driving this convergence, including consumer demand for convenience, adaptable technological infrastructure, data-driven insights, economic efficiencies, and pandemic-induced shifts in consumer behaviour. This convergence offers benefits such as increased convenience, wider options, and potentially lower delivery fees for consumers, while businesses increase customer engagement and capture a larger share of food spending.
However, challenges remain, including the ongoing search for profitability, complex logistics, the risk of cannibalising existing business models, and regulatory scrutiny over issues such as worker classification and market dominance. The sustainability of rapid delivery models, both economically and environmentally, is also under question.
The recent demise of rapid-grocery operators such as Gorillas and the travails of Getir highlight the challenges faced by these companies in achieving profitability and scale. Their struggles have created opportunities for restaurant delivery companies to fill the void and expand their services. As these larger players take over the market share previously held by rapid-grocery startups, they may be better positioned to achieve the economies of scale necessary for sustainable operations.
Looking ahead, expect further innovation in this space, including the expansion of personalised offerings with AI-driven recommendations, and subscription models bundling various food delivery services.
The convergence of restaurant and rapid grocery delivery is reshaping the food industry globally, leading to further disruption of traditional business models and increased competition. As companies continue to innovate and expand their offerings, the future of food delivery looks increasingly diverse. The winners in this evolving landscape will likely be those that offer the most seamless, convenient, and comprehensive food solutions to consumers, while navigating the complex operational and regulatory challenges that come with this convergence.
