The coronavirus disease 2019, or COVID-19, is the ultimate litmus test for global business models. Business models are tested and stressed to their limits thanks to COVID-19. Every industry is struggling, including the food industry.
Demand for Food Services
As people are forced to stay home and order take-outs, the coronavirus disease 2019 (COVID-19) accelerated the rising demand for food delivery services. Before COVID-19, restaurants made 80% of their revenue from dine-in experiences and 20% from off-premise experiences, according to Toast. Today, these numbers are reversed. In response to COVID-19, Restaurants shift from sit-down to or take-out or to-go.
Yet amidst rising demand for food delivery services, we see business failure. Consider Foodora, an online food delivery company based in Germany that offers restaurant meals from restaurants in countries around the world. On April 28, 2020, Foodora filed for bankruptcy in Canada, effective May 11, 2020. According to the official Foodora press release:
Foodora has not been able to reach a level of profitability in Canada that’s sustainable enough to continue operations, competing against strong local players and a highly saturated market for online food delivery.
Failure to reach profitability is a sign that bankruptcy hints at a larger issue at play.
Consumers want food on-demand, delivered quickly, from their mobile phones. Restaurants must deliver food on-demand. The business model that makes this possible is commission. Before bankruptcy, Foodora charged a 20% commission. That means if a meal costs $20, Foodora was making $4. While this business model seems sustainable, it is misleading. According to Foodora's insolvency filings:
The largest claim of nearly $1.1 million is for office employees and $243,608 for Riders Employees. Allied Properties REIT is owed nearly $568,000, Canada Revenue Agency $333,333, Revenue Quebec $177,000, Google $179,000, and workplace insurance agencies in Ontario, Quebec and B.C. a total of $419,000.
In other words, Foodora owed money to multiple organizations and was unable to pay office workers, riders, property management companies, government institutions, third-party vendors, and insurance companies.
Introducing FoodBox: Weekly Food Delivery
FoodBox is a weekly food delivery service. FoodBox partners with restaurants and repurposes employees for the delivery of weekly food.
FoodBox combines restaurant delivery software as a service, white-label delivery platform, and workforce management and allows restaurants to offer modern weekly food delivery services.
Restaurant Delivery Software-As-A-Service
As the number of restaurant food delivery systems has increased, so have the logistical challenges of tracking online orders—restaurants using delivery services usually must have each service's tablet or iPad to receive orders, which then must be transferred into the restaurant's own POS system. To streamline this, software-as-a-service (SaaS) companies have emerged to integrate the online ordering, billing, and dispatching of restaurant food orders. In addition to providing online ordering software for restaurant chains, these SaaS companies' digital platforms also provide data analysis that these restaurants use for medium- and long-term planning. FoodBox is a restaurant delivery SaaS, optimized for weekly food ordering and recurring payments.
White-Label Delivery Platform
Consumers want food on-demand, delivered quickly, from their mobile phones. Modern restaurants that survive are those that deliver food, on-demand.
Modern food service companies or restaurants can retrain and repurpose the existing workforce to perform weekly deliveries. Modern restaurants can convert idle or underutilized employees into weekly food delivery drivers.
FoodBox offers a new business model to dying restaurants and taps into the habits and rituals of food consumers.
Recurring Business Model
Ubiquitous on-demand and subscription delivery of prepared or cooked food will become the restaurant standard. The subscription business model is a business model in which customers pay a recurring price at regular intervals to receive a product or service. In the context of FoodBox, customers pay to receive food every week. Customers select what they want and receive the same food each week. FoodBox allows foodservice companies to break ties with 20-30% commission fees imposed by traditional food delivery services.
Habits and Rituals
People love routines. People often follow habits without conscious thought. A habit is something we do automatically, without thought or attention. People often eat the same thing, at the same time, every week. Think Pizza Monday, Donut Tuesday, Sushi Wednesday, Sandwich Thursday, or Pasta Friday. When people are conscious of their intention to eat the same thing, they form rituals. A ritual is an action done with intention and with a purpose beyond the scope of the action itself.
FoodBox taps into existing habits (unconscious actions) and forms new rituals (conscious actions). FoodBox associates pleasure (food) with time triggers (day of the week). Modern restaurants deliver food weekly and align themselves with people's habits and routines.
Ownership of Customer Data
Restaurants using FoodBox know who their customers are. Owning more of their customers' data through direct phone, web, and mobile ordering, as opposed to paying commission to third parties, allows foodservice companies to break free of traditional food delivery companies.
Modern restaurants use FoodBox to deliver prepared or cooked food every week. Modern restaurants use FoodBox to tap into customers' subconscious habits and conscious rituals. Modern restaurants use FoodBox to not only survive but also thrive in the world of coronaviruses.
Interested to build the future of food delivery? Contact me about FoodBox.