Big Food Delivery Apps in Australia & New Zealand
The average Kiwi household spends 27 percent of their food budget on restaurant meals and takeaways. As might be assumed, this figure has steadily increased over the years as it was closer to one fifth (22%) of their budget two decades ago.
Those living in major cities tend to spend more money than rural households. In New Zealand, Aucklanders spend the highest proportion of their food budget on restaurant meals and takeaways at nearly one third (32%). Outside of the main city centres, households sit below the national average at 22% of their food budget.
In Australia and New Zealand, the big food delivery players include the likes of Menulog, Uber Eats, Zomato and delivereasy. You might also be familiar with other food delivery apps and competitors such as Flamingo and mobi2go who are popping up on the scene as the food delivery industry continues to grow.
This growth is not only in New Zealand but across the world as leading market research organisations are predicting the online food delivery industry will have a whopping double-digit growth rate and bring in $200 billion by 2025.
The Definition of Dark Kitchens
‘Dark’, ‘virtual’ or ‘ghost’ kitchens are all used to describe the same concept: restaurant kitchens that only service food takeout demands. They are tiny spaces that do not host customers and are there simply to prepare the food for delivery. Since their sole purpose is to prepare the meal orders, there are a few advantages to operating a dark kitchen compared to a traditional dine-in restaurant.
Three of these big cost-saving reasons for their growing popularity are: location, space and overhead. Since a dark kitchen does not need to entertain customers, it does not need the hallmarks of a good restaurant location: downtown with high foot traffic. It only needs to be accessible to the cooking team as well as the delivery drivers. This allows the space can be in an area where the rent is considerably cheaper.
Another benefit to not having customers is simply the cost-savings behind downsizing the building square metres to only meet kitchen requirements. The ability to be in any location and in a small space opens up the possibility for dark kitchens to be built in commercial property warehouses or shipping containers. A third benefit is that it also reduces overhead as the restaurant brand does not need to employee service staff, only a cooking staff.
Common Dark Kitchen Models
There are a handful of different dark kitchen models that vary in size, complexity, and task delegation.
The simplest version is the standard dark kitchen. It is generally a single commercial kitchen location without a dining area and is owned by one brand. It produces a single type of cuisine and is reliant on key delivery channels and employees.
The multi-brand dark kitchen is owned by a parent company that hosts multiple brands under one kitchen. Due to the different cuisine types being produced, it is crucial for a multi-brand dark kitchen to be a bit more sophisticated with data insights that identify and supply only the most popular meals from each cuisine type.
Takeaway dark kitchens add an element of pick-up takeaway. Customers do not dine at the premises but can wait inside for their food. It allows customers to pick up their meal, see the food being cooked and interact with employees. This is, of course, in addition to the standard offering of a delivery service. When considering this option, business owners should factor in that this model requires more capital and space because it offers that opportunity to build customer relationships with the front staff.
The fourth dark kitchen model is aggregator-owned. In this situation, an aggregator (most likely a food delivery service) decides to open their own commercial kitchen with space that restaurants can rent. This model allows the restaurant to solely focus on cooking while the ordering and delivery logistics are handled by the aggregator.
The aggregator-owned dark kitchen plus is exactly like the previous model, with additional optimisations within the kitchen that include the provision of data-driven demand management software or personnel.
Outsourced dark kitchens allow operators to outsource almost any part of the process. This is done in partnership with another business that specialises in food preparation as well as order processing and delivery. The final seller of the dish is only minimally involved in the cooking process, investing all its efforts in tweaking and differentiating the product.
The Rise of Dark Kitchens During COVID-19
While it was growing in popularity before, food delivery has played a new or increased role in many Kiwi households during the coronavirus (COVID-19) pandemic. The food provides a welcome change amongst social distancing requirements and panic buying at grocery stores.
In a time of heightened stress, uncertainty, and increased family responsibilities, it can provide some relief and maybe even a hint of normalcy. That desired change from homecooked meals is making the food delivery industry more relevant than ever for customers.
The industry also provides major benefits to restaurants faced with the challenge of trying to reach customers during COVID-19 alert level restrictions. For those restaurants able and keen on staying in their location, it provides a direct connection from the restaurant’s kitchen to the customer’s home.
For those unable to keep their kitchen open or are looking to cut costs where possible, the dark kitchen model provides a solution. Operating in smaller commercial property such as a warehouse space during the pandemic shutdown allows restaurants to adapt and keep their doors somewhat open to customers.
COVID-19 is changing the way people work and live on an everyday basis. Zoom meetings, less business travel and more working from home arrangements could be here to stay. The pandemic might also have a lasting effect on the food delivery business as it provides an opportunity for brands to trial dark kitchens.
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