How Food Delivery and Meal Kits are Impacting the Food Supply Chain

With just a tap of the thumb or swipe on a mobile app, consumers can have food delivered to their homes, rather than dining out. E-commerce, crowdsourcing apps and same-day delivery have fueled the trend by developing technology that makes it easier to order food either from a restaurant, kitchen or meal kit subscription service. According to the LA Times, food delivery sales have increased 20% in the last five years. With the higher demands of customers, restaurants and subscription services must develop better methods to accommodate the number of orders while ensuring freshness and safety of the food being delivered.

Restaurant Food Delivery

The $43 billion meal delivery industry is expected to rise to $76 billion in the next four years, surging as dining in becomes more popular, according to a 2017 study by Cowen and Company, a research firm. If they are successful, restaurants can reach customers that would usually not patronize their business and expand their customer base by offering food outside of the neighborhood and advertising online and in delivery apps; however, restaurants face many issues regarding their food once it enters a delivery vehicle. Now that third-party deliverers are commonplace, there is growing concern about the safety of the food on its way to customers. While restaurants who employ dedicated food deliverers have much better results, virtually anyone with a car can be hired to be a freelance deliverer, regardless of whether or not they have the necessary equipment to store food and meals sanitarily and at the correct temperature.

Restaurants looking to overcome these obstacles have many decisions to make and options to choose from. Robert Sproule, a director at Bureau Veritas, a global food certifier, explains that deliverers must have the power to return food if its safety is compromised—if it gets contaminated or the delivery is outside of safe delivery time for maintaining temperature, for example. Companies like BoldIQ help restaurants strategize deliveries by mapping destinations and restaurants to schedule the best methods for delivery; London-based Deliveroo delivers from designated kitchens where restaurants can base themselves specifically for deliverable meals, optimizing their efforts to ensure quality meals are delivered safely and quickly.

Food Delivery Apps

No longer are customers limited to local pizza and Chinese food delivery. Apps like UberEats, GrubHub and Door Dash offer third-party food delivery for many local restaurants that may not offer their own food delivery service, making it easier to order in. Currently, delivery makes up about 8% of restaurant sales, says Supply Chain 247; however, Inbound Logistics predicts that by 2022, online delivery will account for 75% of all delivery orders.

Meal Kits

For those seeking to cook at home but with lower costs and more convenience, meal kit subscriptions have risen to meet those consumer demands. Subscription services like Blue Apron and HelloFresh provide quality ingredients frequently sourced from local farms that are delivered to ensure quality flavors, nutrition and freshness. Not only are customers pleased—local farmers are more becoming more confident as their bulk sales increase to accommodate the $1.5 billion industry, according to Food Logistics. By supporting their supplies, meal kit services can guarantee that their needs are met in the increasingly complicated supply chain. Inbound Logistics catalogs that PeachDish sources ingredients for its meals from 75 farms and producers—75% which are zoned locally to their customers—while Blue Apron delivers 8 million meals a month with ingredients from their network of 150 farms.

Supply Chain Challenges in Meeting Consumer Demand

Supply chain technology is helping businesses meet the latest demands of consumers that increasingly desire more transparency in their supply. As new methods are explored and optimized, expectations of food safety, quality and faster delivery time can be met; however, fulfillment is becoming more complex and requires more planning with businesses relying more on several suppliers. Omnichannel distribution will inevitably become the standard to meet supply and demand by processing orders using a variety of technologies and processes. If businesses can face increasing issues and complexities, they will be able to increase profits by expanding advertising to online arenas and serving a broader region in their area

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