Deliveroo opens first local delivery kitchen as menus go global
Deliveroo has opened Australia’s first ‘dark kitchen’ in Melbourne that will focus entirely on delivery menus from a number of local restaurants.
Currently servicing Baby, Kong, DiDi Dumpling, Yubi, 8Bit, Up in Smoke and Messina, the concept of kitchens dedicated to delivery menus only has been successful in other countries such as the UK and Singapore, where revenue has jumped by more than five times for Deliveroo.
With plans for up to 70 Deliveroo Editions in Australia by 2018, the concept could also see Aussie chefs expanding their reach to international markets.
While we wait and see what the ramifications are for borderless menus, there is no doubt that food delivery has been a boon for many operators who have embraced the concept early.
Researcher IBISWorld has forecast revenue growth of 2 per cent for the restaurant industry in 2017/18, with the combined takings of 28,252 businesses to reach $21 billion. That growth is expected to reach 5.8 per cent in 2018/19, and revenue to surpass $30 billion in 2021/22.
Senior IBISWorld analyst Bao Vuong says food delivery apps have changed the way time-poor customers dine, and how restaurants are run. Customers now have many more opportunities and control over how and when they dine, based not just on menus, but on price and speed of delivery.
However, revenue for fast food establishments is forecast to rise by only 1.2 per cent in 2017/18, to $19.5 billion, while growth for cafes is forecast to be 0.8 per cent, to $8.1 billion. IBISWorld found only a quarter of fast food restaurants have integrated new ordering and delivery platforms, with low revenue growth a result of their slower response to the new business methods. But they are playing catch-up with KFC jumping on the delivery bandwagon and securing a partnership with foodora in June.
“More and more people are experiencing the convenience of home delivery,” said Peter Prado, foodora’s country head of operations. “Home delivery has grown significantly in the last two years, it is here to stay and grow even more.”
Competition is fierce though, with the foodora battling for market share along with the likes of Deliveroo and UberEATS.
“Players in the market need to show distinctive value and growth beyond an increase in orders,” said Prado. “The key is to show profitable growth as a company, or investors will decide to channel their money elsewhere.”