Thu 25th Apr 2019 - Delivery is industry’s fastest-growing channel as breakfast and lunch orders surge Delivery is industry’s fastest-growing channel as breakfast and lunch orders surge: Delivery is the foodservice industry’s fastest-growing channel with the breakfast and lunch segments growing 86% and 99% respectively since 2015, according to insights firm The NPD Group. There were 755 million deliveries in the year ending December 2018, an increase of 210 million or 39% since December 2015. In contrast, total visit figures for the British out-of-home foodservice industry grew only 2% between 2015 and 2018, peaking at 11.35 billion visits in 2017 and declining 0.5% in 2018, a loss of 60 million visits. Delivery increased its share of Britain’s foodservice industry from 5% in 2015 to 7% in 2018. This could soon reach 9% based on The NPD Group’s prediction of a 28% increase in delivery by 2021 based on current growth rates. Delivery spend increased £1.35bn in 2018 compared with 2015 and The NPD Group said the British foodservice delivery market could be worth £6.3bn by 2021. With more than 60% of delivery orders occurring at dinner, the channel is strongly associated with evening meals. However, The NPD Group suggested this gave delivery ample room to grow at other times of the day. Breakfast and lunch combined accounted for 20% of deliveries in 2018, an increase of 74 million, almost doubling since 2015. Snacking delivery orders are also growing rapidly, up 67 million since 2015, indicating the increasing appeal of delivery across the day. About seven in ten deliveries are to residential addresses, while one in ten are to work locations. However, delivery isn’t only growing among young consumers as orders from over-35s increased 45% or 63 million occasions between 2015 and 2018. Although British pubs accounted for less than 4% of the delivery market in 2018, deliveries have increased 84% since 2015. Branded pub chains in particular are expected to offer more food for delivery in the future as an effective way to keep kitchens busy during quieter trading times. Delivery orders over the phone are declining in favour of apps, the research found. Phones accounted for 56% of all delivery orders in 2015 but this shrank to 45% by 2018. App orders are up 182% since 2015 and accounted for 21% of total delivery orders in 2018. For 16 to 24-year-olds, app orders now account for 30% of total deliveries but The NPD Group said operators would only see further growth if they got the formula right in terms of quality, price, freshness and speed-to-customer, while also meeting public concerns over excessive packaging. Better packaging and on-time delivery is especially important for food such as burgers and chicken, which don’t suit being reheated. Burgers were included in 6% of delivery orders in 2018 and chicken in 23%. Other British foodservice industry innovations will reduce costs, expand reach and increase automation, The NPD Group said. It expects drones to be a feature of the delivery channel in Britain within five years, with branded drones offering a new marketing opportunity to increase customer loyalty. Drones are also likely to be more sustainable than other forms of transport and could work well in rural and city locations. Dominic Allport, insights director (foodservice) at 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 have an impact on 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. There’s much more innovation to come from the delivery channel. Consumers will love the novelty value of receiving their food via drones. As soon as British foodservice operators get a viable and authorised drone delivery platform, they’ll offer it to the public for appropriate food in selected markets.”