The Tribune

ACTIVTRADES WEEKLY

By CHRIS ILLING

www.activtrades.bs

THE food industry, restaurants and take-out joints, has experienced a tremendous revolution during the last two years.

Due to the worldwide restrictions the demand to order food online and have it delivered to your home or place of work has been growing rapidly. The delivery must be fast, accurate and should not cost more than indoor dining. The industry has been growing over 20 percent in the last three years and is estimated to increase to more than $220bn by 2025.

It is critical for the food outlets to stay abreast of what is happening in the market, identify new opportunities, upgrade their software and invest in the right sector at the right time. Approximately 42 percent of the overall food ordering market is now happening online and is growing year by year.

The restaurants can choose between several different ways on how to deliver their food to their customers. While some do it themselves through independent online platforms or their own proprietary website, others choose to use third-party platforms like Uber Eats, Delivery Hero or Deliveroo. The Bahamas has their own Food-Delivery platforms like Kraven or Bahama Eats.

We reached out to the Founder of Kraven, Kyle Albury, who stated: “We onboarded a record number of restaurant partners and were able to give them the support they needed to continue to operate under the emergency orders. In addition, our customers had a demand for grocery delivery. We were able to pivot and provide a solution to meet those needs of our customers.

“With the increased demand for deliveries there was also an increased demand for delivery drivers. Many persons who were displaced from their jobs were able to sign up and replace their income. I would say it was a win, win for our stakeholders as many were able to keep their doors open and persons were able to secure an alternative source of income.

“We are presently working towards expanding our partnerships beyond the food and beverage industry. Presently, our app is available in New Providence and Grand Bahama. We are also working towards expanding to other islands in The Bahamas.”

The rise of digital technology, faster and more reliable internet has reshaped the market. These third-party platforms attract huge investments and high valuations since they are transforming the business of food delivery. The introduction of new business models continues to shape the delivery web. Features now include cloud kitchen, loyalty apps, restaurant apps and more.

The most important factor in the success of a food business is customer retention and adapting to changing consumer preferences is critical.

Millenials and Gen Zers are accustomed to ordering everything online and as these groups get older and have more disposable income, their market size continues to increase which is recognised by all online delivery providers. The growth in the online ordering market can be largely attributed to the digital age culture.

IPOs of food delivery platforms have been popular in recent times with very different results. Doordash (NYSE#DASH) surged after the opening bell in December 2020 and closed the day 86 percent higher from its IPO price and gave the company a $58bn market cap. Five months later the share price is below the opening price.

Deliveroo’s (LON#ROO) share price fell by around 30 percent on its first trading day but has since recovered most of it loses and is now being valued at around $8bn. Delivery Hero (ETR#DHER) has seen its share price rise from Euro 27.80 in 2017 to Euro 132.05 in 2021.

CNN has claimed: “Food delivery apps are changing the way we eat and raking in billions.”

And this sales boom in food delivery is just the beginning. Although technology has improved how food is ordered and delivered, it has created a level playing field for businesses, no matter if the company is an underdog or an established chain. The food industry and its affiliates are going to be an interesting space to watch for the savvy investor.