Among the fastest growing segments of the home delivery economy is food. This is certainly not a new phenomena, with dairy, bakery products, meats and grocery store items delivered to both city and rural dwellers dating back to the early 1900's. Mainly perishable items before people had their own automobiles and refrigeration.
Image courtesy University of Washington Libraries, 93.001.066, circa 1908
Pizza chains pioneered home delivery of prepared ready to eat meals in the 70's and 80's. Now, even before the coronavirus crisis sparked our current surge in demand, home delivery of food has become a major growth market - both ready to eat and ready to cook, which seems particularly popular with seniors.
Following are a few charts recently prepared by the consulting firm Statista that forecasts revenue in the Online Food Delivery market to reach nearly $25 billion in 2020. These estimates were published in January and one would expect these numbers to be even higher now given our country's current state of affairs and pressures to reduce commuting.
Although direct restaurant to consumer delivery still accounts for the largest share of this market (e.g., like Domino's Pizza delivering their own food), the real growth is happening with deliveries from companies like Grub Hub and Uber Eats that make no food products themselves, but instead deliver food from the menus of multiple restaurants. Even Domino's now delivers food from other restaurants and we now have dairies like Smith Brothers Farms in Kent delivering a substantially broadened menu to include not just milk, cheese and eggs, but other prepared food as well.
In this way, restaurants can focus on their business of preparing food and even small restaurants can now have their menu widely available to a much larger audience. The "Platform to Consumer Delivery" companies focus on the logistics of getting food from the restaurant to the consumer and don't prepare food themselves. Much like Uber and Lyft, who have largely displaced conventional taxi businesses, Grub Hub "crowd sources" their drivers, which both improves flexibility and reduces fixed costs. So if you order on line for a dinner piping hot and ready to eat when you arrive home from a long work commute, you will have lots of choices and though still somewhat more expensive than a "dine out" dinner, the value of convenience continues to escalate.
Is the U.S. leading the charge? Nope - China is way ahead.
I expect we are going to see a whole different world of home delivery in the next 10 years, not even accounting for the rapid advances in new delivery technologies, such as the use of robotics, autonomous driverless vehicles, drones and delivery directly into the trunk of your car or even into your refrigerator. Interesting times.