November 5, 2021

Emerging Trends: Grocery Delivery

Ever since its inception, the food delivery and ghost kitchen sector has been at the forefront of industry innovation. It’s a market segment that thrives on modernisation and efficiency – driven by fierce competition and high customer expectations.


Exciting new trends appear at a rapid rate. One of the most significant recent developments has been the rise of “on demand” grocery delivery. But what exactly does this mean, and how is it impacting virtual kitchen brands?


The growth of grocery delivery


In March 2021, the US giant Walmart announced their partnership with Ghost Kitchen Brands – with the intention of developing over 50 ghost kitchens across America and Canada. Another US big hitter, Kroger, had previously announced similar plans. The amalgamation of pre-prepared food delivery and groceries is clearly hitting the mainstream.


There are many smaller players revolutionising the market, such as Weezy, Getir, Fancy, Dija, Jiffy and Gorillas. With the aim of delivering groceries to customers doors within minutes – they make food delivery as simple as picking a movie on Netflix.


This rapid expansion has been driven by over £9.8 billion worth of funding since the start of the pandemic. Whilst traditional online supermarket orders are nothing new – these “quick commerce” players focus more on individual small-scale orders. Think of a pint of milk, bottle of wine, craft ale, crisps and snacks.


In Moscow, this “on demand” food delivery already accounts for over 30% of the online grocery market. Many commentators believe it will grow to be an even more significant part of the market, with multiple small players serving various customer niches.


How does “quick commerce” grocery delivery work?


The main selling point of these new food delivery services is their speed. To ensure a rapid service, “dark stores” are used. This just means small, localised distribution centres, often partnering with larger food delivery platforms.


With fewer stocked items, inventory is easier to keep a track of – with ranges targeted specifically to local shoppers’ needs. 


The customer base is as varied as the products on offer. Those ordering grocery food deliveries range from students to busy parents, young professionals and those who struggle getting to traditional supermarkets.


What does this mean for ghost kitchen brands?


The new rapid grocery delivery market offers significant opportunities for ghost kitchen brands. It means that revenue streams can be diversified and supplemented – at little cost to existing restaurant franchise operations.


If you’re already running a virtual kitchen, stocking great produce and running an efficient delivery service – why not pass these benefits on to customers? Ghost kitchens are likely to already stock key staples such as milk, bread, butter (etc.!). By allocating just a bit of extra storage and fridge space, you can vastly expand this range to include grocery delivery.


Targeted extras (for instance a box of chocolates or bottle of wine to accompany existing food delivery orders) can quickly increase average customer spend. It can also help with food waste. For instance, if you have several items of food that you know will be expiring soon – could these be offered at a reduced rate? It’s a win, win for franchise owners and customers alike.


To stay up to date with the very latest trends for restaurant franchises and virtual food brands, take a look at the Peckwater Brands blog. From setting up loyalty schemes to investing in the best technology and connecting with your online customers – make sure your food delivery business is always one step ahead of the competition.

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