Takeaway and home delivery set for strong future in wake of COVID-19 lockdowns

The COVID-19 lockdowns hit our market hard, but the response from many foodservice operators has once again exemplified the creativity and innovation that has long been a part of the industry. The buzzword of the past few months has been ‘pivot’ – with switched-on foodservice professionals demonstrating their adaptability under fire by retooling their business models to focus on takeaway and home delivery, enabling many to ride out the worst of the lockdowns.

While Melbourne businesses are still struggling as a result of Stage 4 restrictions and the eight o’clock curfew,  many foodservice operators outside of Victoria are now regarding the future with cautious optimism – reporting an upsurge in takeaway and delivery orders that appears set to continue even as businesses reopen their doors to dine-in. It seems as though the lockdowns have generated a new awareness among Aussie consumers regarding the convenience of these options – and many foodservice businesses who weren’t offering them before are now talking about keeping them on permanently.

This is true even of operations which in the past would have been solely focused on dine-in, such as RSL clubs. At The Ary Toukley on the NSW Central Coast, Executive Chef Alex Patterson says the decision to move into takeaway and delivery grew out of a desire to be there for the local community while the club was unable to offer dine-in.

The decision to move into takeaway was likewise due to customer demand – “we already had pizza boxes because we were doing takeaway pizzas, so again it made sense to extend it. We can’t take phone orders because it’s just too busy during service – but customers can come in and order the food, then pick it up when it’s ready. That’s good for the club because it brings them through the doors. Last Sunday we had a table for ten which would have included a visitor from Sydney, but he couldn’t come in because he was outside the local area and we’re restricted to Central Coast residents only right now. So instead they asked if they could order takeaway – that way he wouldn’t miss out – and they ended up taking away ten whole meals, entrees, mains and chef’s specials. 

“I think this has opened up new opportunities for the market and it’s going to stick around,” Alex affirms. “Foodservice operators of all kinds will need to be as versatile as they can going forward, you can’t just keep doing what you did before because the old ways aren’t going to work. We could actually have done it earlier but we were focusing on other things – but we’ve moved to it now and it’s working very well for us.”

But this promise of lucrative sales is not without its downside for those operators who have to rely on third party order platforms to deliver their meals to customers. Commissions of up to 35 per cent per order were not uncommon prior to COVID, and businesses which had to quickly sign up with one of these platforms had no choice but to accept the current structure.

Since then the major players like Menulog, Uber Eats and Door Dash have made some concessions: Menulog halved commissions on pick up orders and waived activation fees, Uber Eats reduced commissions for independent operators from 35 to 30 per cent and Door Dash allowed operators to sign up for free for 30 days. But as Consultant Chef Adam Moore points out, more change is on the way: “I think people have realised there has to be a better solution, and there are new systems and new players looking at evolving the distribution model.

“It’s much better for the operator to have their own database because then you can market to those customers yourself and generate more repeat business. So operators are increasingly saying, if I have to use a third party platform then I’ll need to adjust my prices so the user pays – so it’s one price if you order out, if you order in there’s a discount, and so on.”

While some operators have moved to bring deliveries back inhouse and employ their own fleet of delivery drivers, others are taking advantage of new platforms which have come on the market, such as Melbourne-based Hungry Hungry which provides foodservice businesses with a fully featured online ordering portal and is currently processing more than 50,000 orders per week.

“We started off as a venue ordering solution, so venues could present a digital menu and allow customers to order from their phone,” explains Hungry Hungry’s co-founder Mark Calabro, a longtime veteran of the foodservice industry. “But just as COVID hit we saw what was happening and we quickly repurposed everyone from out of venue ordering towards pickup and deliveries. It was entirely driven by wanting to help out people in the industry who were like friends and family – this industry is largely mums and dads, not sophisticated corporates, so we felt we could champion them and we knew we could deliver tools that would have a direct and positive effect on profitability.”

Hungry Hungry allows customers to order takeaway, drive through and home delivery and charges a low commission rate of five per cent per order, with no subscription fees or contracts. “Whenever we set up an online order site for venues, it’s representative of who they are in terms of corporate identity, colour scheme and graphics,” Mark explains. “The business owner is then proud to put it out there because it looks like they’ve invested time and effort in building something that exemplifies their business – so when a customer goes to, say, the Last Piece in Mulgrave, they feel as if they’re ordering directly from them and not using the Hungry Hungry platform.

“And in addition to the tools and features we’ve built in, the platform’s designed to help get in more orders during those peak times and provide the venue with the actual data – so the venue owner can engage with their customer after the transaction,” Mark explains.

“That’s not something they may have a lot of time to do at the moment, but thinking six to 12 months ahead, being able to have that engagement with your own customer is, we believe, a fundamental benefit – we’re not about creating a wall like the big global aggregators have done. We have a sense of responsibility and care for the industry and I think that comes from our years of being involved in it and having established lifelong friendships with people – some of them are famous chefs, others are mums and dads who are inspirational in their own right. And the other part of it is, this industry is the largest employer of youth and migrant workers – it’s small business that employs most of our population, so if we don’t have these hospitality businesses surviving and being able to make a profit, it’s a disservice to the whole country.”