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Sunday, December 8, 2019

Business Education

Foodee Bites Into The $210 Billion Online Food Delivery Market

Foodee

Of the $210 billion addressable restaurant spend, online food delivery dominates less than 5 percent—or $10 billion. That’s half of the market penetration that e-commerce has and an eighth of online travel.

The growth potential for online food delivery is considerable. Not only that, tech-savvy Millennials who love good food are a driving force in the future of food and tech.

I’m the co-founder and CEO of Foodee, an innovative corporate catering company. We partner with local restaurants to bring meals to modern offices. Like Airbnb, our software connects excess supply (restaurant kitchen capacity) with demand from a new client (offices). We envision a world where restaurants are empowered to democratize meals away from tired catering and industrialized multi-national food services companies. Here’s how.

Understanding the shift in the food—and online food delivery—industry

When it comes to delivery and options, the food industry is stagnant. But change is among us.

A handful of players dominated the broader contract catering market. They operate on a fully-integrated, linear business model that creates margin from low wages and volume. Meanwhile, restaurant chains like Subway, Applebees and Domino’s are closing shop and losing sales.

Today, almost 60 percent of the addressable restaurant spend market goes to pizza. In my former life as an investment banker, I can attest to how much pizza our company ordered. We also ate many platters of uninspired slop for lunch.

But your employees don’t want to stand at a communal buffet line. Or eat pizza. Not anymore.

Millennials spend 44 percent of their food dollars eating out. A staggering 40 percent of them eat a plant-based diet. And at 35 percent of the workforce, our Millennial colleagues are aware of their eating habits and look for value and quality. They don’t want platters or buffets; they want their own meal (healthy, local, plant-based or otherwise).

Millennials are changing what they eat and how they get it.

Grocery and meal-delivery services and food-tech apps are on the rise—Foodee among them. Our platform integrates customizable ordering tools with logistics management software for AI-powered meal planning. The strategy works. In four years, our online food delivery service has grown 1125 percent. We’re in 12 cities with over 700 local, owner-operated restaurant partners across North America.

Introducing the restaurant industry to a growing market

I spent half of my career in restaurants and the other half in corporate offices.

For more than a decade, I was an investment banker who specialized in launching, growing and selling businesses. Then I jumped to entrepreneurship. I co-founded Superbaba and Tacofino restaurants, helping the latter grow across eight locations.

There, I saw how peak-demand times (where kitchens were dead at 11 am and slammed at noon) weren’t helping the business grow. Between the uninspired office catering of my past and the thankless, stressful stories my mom (who worked as an office admin) told me of ordering meals—I saw an opportunity to bridge my careers.

Foodee’s growth investment and strategic funding partners opportunities

Foodee averages more than 1000 meal deliveries a week to modern offices. They order regular lunch as an investment in company culture, employee happiness and productivity. We work with office admins to make office catering stress-free. We suggest top local restaurants based on their preferences and budget and employees get a link to order what they want.

We aim to become the largest local food provider to offices, but own no kitchens, cook no meals, and deliver no food.

Here’s how.

Platform upgrades for scalability

We’ve built Foodee’s food-tech platform to scale. It includes a fully-customizable suite of ordering tools, live customer service, delivery execution, and technology to follow every order from restaurant to office. Our corporate clients use our order generator or create customizable meal plans for ten to over 500 employees based on their dietary preferences, budget restrictions, and exclusive-to-Foodee local restaurant favourites.

Restaurant partnership expansion

We are expanding our restaurant partnerships across North America to bring more local meals that Millennials and our 4,000 corporate clients cherish. Every new and exclusive-to-Foodee partnership is a popular, local, sustainable and owner-operated restaurant.

Strategic logistics partnerships

We have a dozen logistics partners, like DoorDash, that provide a specialized, efficient service and product. With Foodee-certified “Drive Dashers,” their team is highly trained in service, ensuring individual orders for hundreds of employees are labeled, on-time, and set up for lunch.

Partnering with professional logistics companies like DoorDash allows us to expand our footprint. We recently celebrated our California launch and can focus on expansion into new and logistically complex markets, like New York City.

The future for Foodee in the budding online food delivery market

I liken the emergence of this final-mile logistics web as a revolution for business along the lines of e-commerce. Now, we can tap into a sea of at-the-ready couriers that are tackling any size order. We are building our business to sit on top of this logistics engine.

Once existing partners (think restaurants for us, but suppliers across the industry) are opened up to each other, we will see the emergence of true “Lego” economies. One part of an order will be fulfilled by one partner and another by someone else. The knitting together and coordination of these partners, such as we do with our Enterprise Order Management Software, will unlock new value to individual partners. They will have the ability to address new opportunities previously too large or complicated to service on their own.

We’ve met our hard-won goal of proving that our model is profitable. We used to be focused on growth at all costs, but our hard-working team of realists changed our focus—and it’s paying off. We want to build a great, long-lasting company and will continue to push our industry forward.

The $210 billion market opportunity is not a static figure. If the Millennial workforce has any say over the modern offices in which they work—which they do—they will continue to demand greater, faster and better online food delivery and technology. We’re ready.


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Ryan Spong
Ryan Spong, CEO and Co-founder at Vancouver-based food-tech startup - Foodee. Foodee's managed-marketplace connects the city's best restaurants to corporate offices across North America. Ryan is an opinion columnist for the CEOWORLD magazine.
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