Deliver My Breakfast And Lunch By Drone Please

Delivery of breakfast up by 86% and lunch by 99% since 2015

Will drones be delivering food orders in British cities within the next five years?

Global information company The NPD Group says delivery is changing the shape of British foodservice.  Delivery of food orders is the industry’s fastest-growing channel and its extensive use of technology means it is also the most innovative. There were 755m delivery visits in the year ending (YE) December 2018, an increase of 210 million or 39% since YE December 2015. In contrast, total visit figures for the British out-of-home (OOH) or eat-out foodservice industry grew just 2% between 2015 and 2018, peaking at 11.35 billion visits in 2017 and declining by -0.5% in 2018, a loss of 60 million visits. Delivery increased its share of Britain’s foodservice industry from 5% of visits in 2015 to 7% in 2018. This could soon reach 9% based on NPD’s prediction of a 28% increase in foodservice delivery visits by 2021, based on current growth rates. Delivery spend increased by £1.35bn in 2018 compared to 2015 and NPD says the British foodservice delivery market could be worth £6.3bn by 2021.

Lunch and breakfast to your door
With over 60% of delivery visits occurring at dinner, the channel is strongly associated with evening meals. But this suggests that delivery has ample room to grow at other times of day. Breakfast and lunch combined accounted for 20% of delivery visits in 2018, an increase of 74 million, almost doubling in size since 2015. Snacking delivery visits are also growing rapidly, up 67 million since 2015, indicating the increasing appeal of delivery across the day. Around 7 in 10 delivery visits are to residential addresses while 1 in 10 are to work locations. But it’s not just young consumers that like food and beverages coming to their door; delivery visits grew strongly among the 35+ age group between 2015 and 2018, with visits up 45%, or an additional 63 million.

Pubs have appetite for delivery too
Although British pubs only accounted for less than 4% of the delivery market in 2018, they have increased their delivery visits by 84% since 2015. Branded pub chains in particular are expected to offer more food for delivery in coming years, as this is an effective way of keeping kitchens and kitchen staff busy during quieter trading times.

Dominic Allport, Insights Director (Foodservice), The NPD Group, said: “In the past decade, foodservice delivery spend has almost doubled and is especially profitable for restaurants looking to increase business volume. Over the short-term, commission charged by aggregator platforms could impact operator profitability. But the long-term trend for food delivery is growth. The arrival of virtual restaurants, usually run from ‘dark kitchens’ and offering delivery-only brands, will strengthen the wider movement away from retail-based foodservice.”

App orders are growing
Delivery orders made by phone are declining in favour of apps. Phones accounted for 56% of all delivery ‘visits’ in 2015 but this had shrunk to 45% by 2018. App orders are racing ahead and are up 182% since 2015 and accounted for 21% of total delivery visits in 2018. Within the 16-to-24 age group, app delivery visits now account for 30% of total delivery, highlighting the increasing importance of technology in younger peoples’ lives.

But operators will only see further growth if they get the formula right in terms of quality, price, freshness and speed-to-customer, while also meeting the public’s concern about excessive packaging associated with delivered food. Better packaging and on-time delivery is especially important for hot foods, such as burgers or chicken, that are not easily reheated. Burgers were included in 6% of  delivery visits in 2018, and chicken in 23%.

Other British foodservice industry innovations will reduce costs, expand reach and increase automation. The NPD Group expects drones will be a feature of the delivery channel in Britain within five years, with branded drones offering a new marketing opportunity and increasing customer loyalty. Drones are also likely to be more sustainable than some other forms of transport and could work just as well in rural locations as cities.

NPD’s Dominic Allport added: “There’s much more innovation to come from the delivery channel. Consumers will love the novelty value of receiving their food order via drones. As soon as British foodservice operators get a viable and authorized drone delivery platform, they’ll offer it to the public for appropriate foods in selected markets.”