Delivery or Disruption? Third-Party Mobile Apps Offer Both

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It has taken a while for the mobile revolution to threaten serious change in the food service business, but the advent of third-party delivery apps may change that dramatically. This is one of the major issues David Henkes, senior principal for Technomic’s advisory group, will tackle at the upcoming VIBE Conference. The group is responsible for directing strategic consulting and research assignments for clients active in the food, beverage and related industries, and as a senior member of the firm, Henke’s specific responsibilities include client development, engagement oversight, and industry relations. One of his two sessions will look at the pace of change in the on-premise space, chief among them third party deliveries and how they’re really changing the game.

“One of the reasons it has the potential to make such an impact is that it addresses how, if you can’t get your customers to come to you, how you can come to them. But that’s impacting the beverage occasion, whether it’s beverage alcohol or non-alcohol, they may be losing out on that,” says Henkes.

The pace of change in the on-premise drinks business has never been faster; evolving consumer dynamics present both opportunities and challenges for operators and suppliers alike. Henkes, along with Technomic’s associate principal Donna Hood Crecca, will look at shifting consumer demands, key drinks performance metrics, and the outlook for the on-premise adult beverage occasion in 2018 and beyond in the on-demand economy.

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With competitors springing up—not only Uber Eats but Postmates, DoorDash and others—these disruptors are growing fast, says Henkes. Some chain operators have become involved with varying degrees of success. Meanwhile, the issue of store traffic, which has plagued chain operators recently, is not likely to be helped by delivery options, he says.

“Third-party delivery services really level the playing field. In our research and from other studies we’ve seen, chains are losing out to independents in a pretty big way in the full-service casual dining realm. Forecasts show that independent casual dining is growing faster than chain operators already. The advantage chains have had has always been scale and the consistency they’ve been able to bring rather than their uniqueness. What’s happening now is the convenience factor that has helped drive so many dining occasions, that advantage is being taken away because with that delivery service, you’re looking at a whole host of options for the consumer.” 

Of course, alcohol is a major issue as delivery becomes more prominent. Beverages overall but especially beverage alcohol offer a much higher profitability that restaurants depend on, and things get sticky as delivery expands.

“That’s one of the things we want to explore,” says Henkes. Buffalo Wild Wings, for example, has been testing beer delivery in some locations, as has BJ’s in California. Many others have been testing initiatives in the last year as chains dip their toes into alcohol delivery themselves.

“There are so many different laws—state and local—it’s hard to build a common approach across the country, but I think some of the more forward-looking chains are looking at how to include beverage into the order. Beverage alcohol is such a driver for guest satisfaction if you are able to include something you are known for as part of the away-from-home experience in delivery, even though it is not actually on-premise, that will drive satisfaction,” Henkes says.

How to navigate those issues, as well as how to protect an operator’s reputation for quality when food is handled by a third party, will be a key part of the “Dealing with Disruptors” presentation, scheduled for the VIBE Conference’s second day.

“Lots of companies are still figuring it out, but we’ll look into what the best of class ideas are, and some thoughts and guidance on how to make it more successful and a bigger part of their business.”