Voice of the Restaurant Industry
Reported by foodem.com, the online wholesale food marketplace-
Ever since the fall of Webvan in 2001, a bankruptcy some have called the worst in dot-com history, investors have been hesitant to embrace the idea of grocery delivery. Recently, some daring entrepreneurs have questioned this hesitation. One can now order just about anything from Amazon or elsewhere and have it arrive at their doorstep in a matter of hours. So why can’t that be the case with food?
There’s a tech startup scene emerging for local food delivery, and DC and New York are leading the charge. In New York City, there’s FreshDirect. In the Richmond/Charlottesville area of Virginia (and soon expanding to DC), there’s Relay Foods. And, unlike the late Webvan, these scrappy upstarts are going easy on the capital expenditures.
Arnie, COO of Relay Foods, outlined the efficiency of his company’s strategy at a recent DC Tech Meetup. Instead of buying huge, expensive warehouses to store inventory (which is a major reason grocery store margins are razor-thin), Relay partners with established grocery stores such as Whole Foods to source products. To further avoid expenses, Relay doesn’t usually deliver orders to doorsteps (although it can as a convenience for a premium). Instead, it sets up trucks outside of office buildings and other locations at which multiple pickups take place–saving Relay and its customer unnecessary driving (and saving the planet some CO2 emissions in the process–after all, it's all about sustainability). Add local to the mix, and boy is that a trend!
The national grocery market generates $700B in revenue every year, and grocery delivery services have barely gotten off the ground (the combined revenues of FreshDirect and Relay Foods are well under $1B). As consumers begin to expect the same level of convenience, flexibility, and efficiency from their groceries as they do from everything else they purchase online, look for grocery delivery to flourish. And after all, nothing says "We're local!" more clearly than appearing on someone’s doorstep.
Here at Foodem, we know food distribution is an industry ripe for change. That’s why we’re the only B2B online marketplace that connects wholesale food distributors with wholesale food buyers. That’s also why we think it may be worth it for you (as restaurant-owners or other food-distributors) to explore this fledgling industry. There are models of success, and yet the sky is still the limit. That is a rare opportunity indeed.