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Delivery market is delivering growth

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Increasing online food delivery app usage could result in more dark kitchen outfits.

The popularity of online food delivery apps such as Deliveroo, Just Eat and Uber Eats cannot have gone unnoticed, and this is something that UK catering equipment dealers need to stay abreast of, as many foodservice operators are turning to ‘dark’ kitchens, with no front of house, in order to specifically serve this market, which could generate more project work.

The online food delivery industry also plays a unique role in bringing together several technological advancements, companies and processes to provide convenient, quick and cheap food delivery to end customers.

Therefore it should come as no surprise that US-headquartered research firm Frost & Sullivan predicts sector revenues to rise from $82bn (£64bn) in 2018 to a staggering $200bn (£156bn) in 2025 at a CAGR of 14%. The company estimates this growth will come about as a result of increasing global penetration, strategic mergers and acquisitions, and adoption of new technologies such as artificial intelligence, AR/VR, drones and autonomous vehicles.

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These figures can be found in Frost & Sullivan’s latest report, the Future of Global Online Food Delivery Services Market, which analyses the global online food delivery industry and discusses the current market scenario, key trends, innovative strategies, and competitor profiles, and provides a region-wise revenue forecast for the sector through 2025.

North America has the highest concentration of online food delivery companies. Uber Eats has the highest presence globally, operating in more than 670 cities. However, in certain countries, local players dominate only their home markets, such as Meituan Dianping in China, Swiggy in India and iFood in Brazil.

Asia has been the largest market for online food delivery globally, passing $45bn (£35bn) in revenue in 2018. China contributed over 73% of that share, with India a distant second at 13.2%. The Asian market will surpass $100bn (£78bn) by 2025. Europe is expected to grow at a CAGR of 14.5% between 2018 and 2025, which is higher than any other region.

Frost & Sullivan team leader for the automotive and transportation sectors, Viroop Narla, commented: “Automotive OEMs will actively participate in the development of specific autonomous vehicles such as drones and ground bots for the online food delivery industry, either through their own programs or acquisitions. A combination of autonomous aerial and ground delivery methods is expected to make the future of food delivery more efficient and cost-competitive.

“Online food delivery companies will increasingly look at new revenue streams to stay ahead of the competition. Cloud or dark kitchens are expected to become a very popular setup for these companies to either prepare food or rent space to other food businesses.”

Frost & Sullivan believes that delivery providers can explore the growth opportunities in pursuing continuous onboarding of restaurants and other food providers to expand selection for customers and broaden reach; adding features such as payment wallets, subscription offers and crafted meal options to ensure customer retention and spur innovation; improving penetration in growing markets with a large population, such as India, Asia-Pacific, and Africa, which is critical to future success owing to their large segment of millennials and a burgeoning middle class; and exploring the concept of ghost restaurants under their own brands or licensing through third-party companies, as this reduces overhead expenses significantly.

Tags : dark kitchensdeliveryfood deliveryghost kitchensMarket reportmarket researchreportresearch
Clare Nicholls

The author Clare Nicholls

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