NewsCovering America

Actions

From pizza delivery and takeout to curated apps, the food on-demand industry is growing

Food Delivery NYC
Posted at 2:38 PM, Nov 11, 2021
and last updated 2021-11-16 10:07:35-05

How your food gets to you and where it comes from is shifting.

“It pretty much goes back to the 1950s and 60s. It was pizza companies and Chinese food companies that were trying to get an edge on other types of food delivery,” said Amanda Belarmino, an assistant professor at the William F. Harrah College of Hospitality at the University of Nevada, Las Vegas.

Tech has made that easier for restaurants of every kind.

“It’s actually one of the oldest businesses to not be impacted by technology, but that’s changing very quickly,” said Alex Canter, CEO and co-founder of Nextbite. “The way that e-commerce came in and changed retail and people shop online now and order products and services on Amazon or through Instagram, whatever is being targeted to them, the same thing is happening for food.”

Nextbite was one of the dozens of companies showcasing their business at the Food on Demand Conference, a space for cutting edge food delivery tech.

“This is the fourth year of the Food on Demand Conference. It’s actually been growing substantially year over year.”

“Online ordering has taken such a big place in the priority for restaurants when they’re looking at technology,” said Hadi Rashid, the co-founder of Lunchbox.

“People are having this desire for restaurant-quality food. There also sometimes comes this desire to not leave the house at the same time,” Belarmino said.

She has done research on the sharing economy and consumer behavior with meal delivery services.

“More and more restaurants feel that they need to be on the apps in order for their visibility, just like we saw that happen with social media,” she said.

The food delivery market has more than tripled since 2017, according to stats from management consulting firm McKinsey & Company. The food delivery global market has a worth of more than $150 billion.

“We’ve seen a rapid marketplace acceptance,” Belarmino said.

It’s not just your favorite brick and mortar restaurant that’s having to adapt. The doors have opened to a whole new space for ghost kitchens and virtual restaurants.

“There’s a new type of restaurant called a virtual restaurant, which is essentially a restaurant that only exists online. Which means there's no physical storefront or building you can walk into and order or eat at a place under this name,” Canter explained.

Nextbite has a portfolio of these delivery-only restaurants. They partner with brick and mortar restaurants across the U.S. to use their kitchen space and staff to operate these virtual restaurants.

“The rent is fixed, the lights are already on, the staff is already in the kitchen, whether you're doing one brand or multiple brands,” he said.

There’s a growing share of ghost kitchens, too. A similar concept, but they operate out of industrial kitchen spaces that might host multiple virtual brands.

“Ghost kitchens in the 2020s are kind of what food trucks are 10 years ago,” Belarmino said.

She said the food delivery industry may still have some adjusting to do.

“We might see some changes in fees for the consumer. In a lot of places, there's no delivery fee or a dollar delivery fee, and that may start to increase so that restaurants can get a little more profit back for it,” she said.

All this change comes at a time when restaurants have been working to get back on their feet from the pandemic.

“This is a very exciting time for the restaurant industry because there's so much innovation happening, but it's also a very devastating time. Lots of restaurant owners are struggling,” Canter said.

“This is going to be the future of food delivery and restaurants,” Belarmino said.