Rabobank discusses lessons learned from the impact of the on-demand economy on food.

NEW YORK – Traditional food retail and takeout services are ripe for disruption as the on-demand economy gathers steam, Rabobank said in a recent report.

“We dub this ‘Food Delivery 2.0,’”, said Rabobank analysts Nicholas Fereday, who authored the report with Paul Savanti, senior research analyst of consumer foods.

“As technology lowers the barriers to entry, it threatens to disrupt both food retail and traditional take-out foodservice. These new services satisfy our increasing desire for convenience, mass personalization, and our preference for managing more of our lives online.”

Food Delivery 2.0 describes five factors driving the surge in popularity of food delivery services:

  1. Ultimately, this is a story of convenience — saving consumers’ time and making their lives a little easier by solving the dilemma of what to eat for dinner.
  2. Competitors need to focus on food and logistics. Pricing and quality of products will be key in determining the winners in the ready meal and grocery space, according to Food Delivery 2.0.
  3. Getting the logistics right will make or break a food delivery business, according to Rabobank. Having a cool app, or other technology, is not enough and won’t solve logistics issues.
  4. Expect some players to lose the food delivery game. A lot of money is flowing into the on-demand delivery sector, but many of these companies are struggling to be profitable despite stratospheric valuations.
  5. Food Delivery 2.0 will not lead to a total displacement of existing players, the report said. But in the long term, new platforms eventually will complement existing routes to the consumer.

“Competition for the consumer’s food dollar has never been greater,” Savanti said. “Last year, the amount we spent at restaurants and other foodservice venues exceeded our grocery shopping bills for the first time — a major milestone.”