“ The past does not predict the future though. But if you know there is a lack of ethnic food or no clear winner for Late Night Burrito King, you may soon be wearing the crown.Īndrew Chen, General Partner at a16z recently tweeted survey research from NPD Group showing that pizza still controls 61% of the delivery market share across cuisines. If you find there are already a bunch of 5-star-rated curry restaurants delivering in your area, it may not be a wise move to try to compete. Talk to people on the streets and in your neighborhood. Is there a specific audience that is best suited for delivery-only that you can cater to? Students? Busy professionals? Special diets? Mobility-limited seniors? Office complexes? When starting any business you need to do your research and find a unique gap in your current market. Starting with delivery in mind from the get-go is key. Keep your ingredient costs low by offering a few standard menu items that use similar ingredients and preparation methods. Unlike a brick and mortar, you will need to focus more on simplicity, versatility of ingredients, and consistency. Like a brick-and-mortar restaurant, you will need to perfect your offerings with a focus on time, temperature, quality, and taste. If your food arrives cold, soggy, or messy, you run the risk of killing your repeat customer business, which is the critical component to a local operation. Time and temperature are huge impediments for food quality and are the biggest considerations when developing a delivery-only concept. In essence, planning your concept requires optimizing for delivery.
In response, restaurants are realizing that delivery has become a necessary burden in a physical space and their menu is not designed with delivery in mind.
On the other hand, brick-and-mortar restaurant kitchens are optimized for in-person dining and service, which face their own challenges, especially low margins. The biggest limitations for food trucks are the high costs of outfitting and maintaining the truck, legal restrictions in regards to operating and parking the vehicle, inconsistent sales volumes because of bad weather or failed events, difficulty shuffling food and supplies on and off the truck, and back office challenges and fees associated with payments. The New Restaurant Industry STEP 1: Plan your concept to optimize for delivery. Here is a list of the seven key steps that can help you get started. If you are considering creating a virtual restaurant there is plenty of green space in the market. In addition, we predict the next few years will become a testing ground for venture-backed concepts looking to grab their piece of this new market share.įor operators looking for the lowest barrier to entry into a highly competitive industry, the virtual restaurant is essentially the new food truck (without the truck).Īnd while the barriers to entry for starting a cloud-based food service have never been lower, the steps for getting up and running and the strategies for success are significantly different than a brick-and-mortar restaurant or food truck. What we do know is that this concept has the potential to create a whole new segment of food service providers lying somewhere on a continuum between food trucks and restaurants. consumers’ growing appetite for convenient, delicious, on-demand foodīecause of these larger market opportunities, a food entrepreneur looking to start a delivery-only food business can focus on the elements needed to delight a burgeoning category of eaters with significantly fewer capital resources or overhead costs.ĭelivery-only concepts are democratizing access for food entrepreneurs looking to test markets without needing an existing customer base or to be physically located in a high foot traffic location to ensure visibility.increased access to hourly rentable commercial kitchen space.The ingredients for disruption are all here: Regardless of which buzzword you choose, food establishments that exist primarily for delivery are gaining national prominence.
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