Food delivery is a great way for restaurants (and other food establishments) to generate more income. But is running delivery services for food too much hassle when you’re already managing a restaurant? And is the extra revenue worth it?
The short answer is, yes — it’s worth it.
Our partners sell an extra £12,103 to £45,823 per month just from operating a virtual kitchen and delivering food to customers. There’s clearly potential for growth by becoming a delivery pro in the hospitality market.
If you’re thinking about launching food delivery for your restaurant but you’re not 100% sold, you’ve come to the right place.
In this article, we’ll cover 5 food delivery service benefits, why food delivery is an essential service for any kitchen, and how working with Peckwater Brands can help you run a successful virtual kitchen.
First, let’s take a look at how food delivery is influencing the market.
How restaurant chains are reacting to an increase in delivery
The online food delivery market is booming. In the UK alone, the value of the market is around £3.7 billion. It’s steadily grown by an average of 40.5% each year since 2017.
The COVID-19 pandemic undoubtedly accelerated this hospitality trend. With so many hospitality brands forced to close their doors, there was a clear increase in restaurant delivery. They turned to food delivery to keep themselves in business.
But even though most restaurants have reopened their doors for dining, online food delivery is here to stay. In fact, a study from Statista predicts that the online food delivery market will reach $223.7 billion by 2027.
With figures like these, it’s no surprise that restaurant chains are jumping on the bandwagon and increasing their restaurant takeaway services. Even fast food restaurants like McDonald’s are available on delivery platforms like Uber Eats, Deliveroo, and Just Eat.
Some chains even offer takeaway services directly from their own website without a third-party app. Of course, this is one of the benefits of being a chain restaurant. These companies have more disposable income and resources than a smaller, local business.
But there’s definitely room for independent restaurants to increase revenue with food delivery services. In fact, 65% of consumers feel better about ordering from a local restaurant than from a chain, and 87% like supporting a local business.
When done well, food delivery can massively grow your restaurant franchise and increase your revenue. Plus, it’s convenient — especially if you launch a virtual brand off the back of your existing business.
To launch a virtual brand (also known as a virtual kitchen), you don’t have to find new premises, buy new equipment, or hire new staff. You simply run the entire operation from your existing kitchen with your current employees.
And if you use a delivery franchise partner (like us here at Peckwater Brands), you won’t have to worry about any of your marketing. We’ll take care of all your virtual branding, including your logo, company name, and even your menu.
Find out more about launching a virtual brand with us!
What are the benefits of food delivery?
Now that we know why food delivery is so popular, let’s look at the benefits of launching a food delivery service from your existing restaurant.
1. Increase your revenue and boost your profit margin
Let’s cut straight to the chase. One of the main benefits of restaurant online ordering is that it means more revenue for your business. It really is that simple. You sell more food with a small increase to your overheads (if any), so your income goes up while your outgoings remain pretty consistent.
What’s more, if you’re running a ghost kitchen brand (also known as a dark kitchen or virtual kitchen), you already have the resources to prepare food for delivery. This keeps your overheads even lower and your profit margin higher.
Delivery platforms do charge a commission for each order you get (the amount varies based on which platform the order comes from). But as long as you’re getting enough orders and you’re not forking out bags of money for a premises or staff, chances are you’ll still see an increase in restaurant revenue.
2. Reduce food waste
Food waste is a problem in the hospitality industry. A report from the UNEP Food Waste Index in 2019 found that over a quarter of all food waste came from the food service industry.
But the good news is, when done well, food delivery can reduce food waste.
Think about it. With all those ingredients you’d usually throw away, you could prepare additional meals for customers ordering from home. It means less waste, and more income. It’s a win for the environment, and a win for your business.
At Peckwater, we take food waste into account when working with our partners. We can produce menus that help you utilise your existing ingredients. That way, you have less food waste and you don’t have to spend extra money on new food items.
3. Reach more customers and improve brand awareness
Restaurants that deliver food via third-party platforms (like Just Eat and Uber Eats) will get more brand awareness.
Simply because being present on large food delivery platforms means more people see your brand. As a result, you’ll reach more customers and increase your chances of getting orders.
Think of food delivery as free advertising. It gets your brand in front of more people, which boosts your chances of getting more food orders.
It also helps you reach an audience you might never have had with in-person dining.
Think about Millennials as an example. When it comes to food, they’re more likely to order online than any other age group. By launching a food delivery service, you’re able to capture this new market.
And the more people see your brand online, the more familiar it’ll become. A study from OnBuy.com found that 71% of consumers are more likely to buy from a brand they recognise, so this can only be a good thing!
4. Use your existing resources to generate more income
Launching a food delivery operation sounds like a time-consuming and expensive task. Well, we’re here to dispel that myth. Food delivery doesn’t have to be expensive or time-consuming.
By using your existing resources, food delivery can help you generate more orders, more revenue, and more profit.
Let’s take a look at one of our case studies to see this in action.
Deluxe Pizza is a fast food restaurant that delivers (yep, you guessed it) pizzas. Hamdi, the General Manager, knew that virtual brands and food delivery were the way forward. However, he was hesitant to make the jump due to a lack of space and limited kitchen staff.
Fortunately, our model only takes up a small amount of space in his kitchen. How? By creating a menu that streamlines with his existing ingredients by 95%.
Since working with us, Deluxe Pizza is now bringing in £17k+ per month.
Even with limited resources, food delivery can generate more income. You just have to be smart with how you do it, which is where working with us comes in handy! We can help you run a successful delivery franchise from your existing kitchen. We're fast to launch, with very little upfront cost, and no minimum contract length.
5. Stay on top of food trends
Research from DoorDash found that 46% of consumers will order something new on a menu because they get bored of eating the same thing.
In other words, to keep your customers happy and to encourage them to buy from you, you need to stay on top of food trends.
Fortunately, online food delivery helps you do just that.
With online food delivery, you can access valuable customer data. You can see what your customers are ordering, what they’re not ordering, and better understand what they want from your franchise. As a result, you can provide them with food they actually want to order.
And if you partner with a delivery franchise company, you’ll also get access to industry experts who can monitor trends in your local area.
Look at Peckwater Brands as an example. Using local search information, we’ll create a menu that appeals to your audience. For example, if ‘fried chicken’ seems to be a popular topic in your vicinity, we’ll incorporate this into your menu.
Work with Peckwater Brands to launch your own virtual kitchen
If you’re running a traditional restaurant, food delivery offers a fantastic opportunity to diversify your revenue streams. The benefits of online food delivery include reaching more customers, reducing food waste, and staying on top of the latest food trends.
To transform your business and bring your own virtual kitchen to life, get in touch with Peckwater Brands. We have years of experience working with partners just like you, so we know a thing or two about launching a successful food delivery brand.
We use real insights and local data to create high-quality, exciting menus for your customers. No need to worry about creating menus or designing packaging - we’ll take care of everything. All you have to do is accept the order, prepare the food, and send it on its way.
Find out more about how it works or book a quick 15-minute call with us to get the ball rolling.