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Food Delivery Services – 5 reasons for business growth

Food delivery

Food Delivery services has completely changed the food industry in the last decade. Despite the economic slowdown, the food delivery business is still expected to grow and reach USD154.34 billion in 2023. It has come as a complete game changer for the food industry. Today, a restaurant can reach a customer several miles or kilometers away. For the customer, he is able to order that food from his favorite restaurant in the other end of the city. This has all been possible with the advent of smart phones and mobile applications. While we may curse technology for having eaten up on traditional jobs, it has also given rise to newer opportunities.

History of Food delivery

 Now if you thought that the food delivery service came into existence recently, you are in for a shock. As per Wikipedia, food delivery was first introduced in the year 1768 for naengmyeon (cold noodle) in Korea. Haejang-guk (hangover soup) was also something that was known to be delivered in 1800 and by the year, food delivery would also be advertised in local newspapers.

#1 Promising Income and Consumption Levels

 With an increasing number of younger people being productively employed in lucrative business sectors like IT services have raised the living standards and made their wallets fatter too. The World Bank reports a staggering 50% increase in per capita income since 2006 until now. Urban world sees a visible change in the social setting, which further fuels the advance of fast food restaurants. Higher disposable income is also a key driver for other sub-categories of food products too.

#2 Favorable Lifestyle Changes

 Today most house holds have 2 or more income sources. Due to either both parents working or a secondary source of income, the extra money coming in has changed lifestyle. In their busy schedule and time crunches, food delivery services play a very important role to ensure that there is food on the table. This also ensures that family is able to spend quality time after otherwise busy days work.

 #3 Rising Number of Working Women

 We have also seen a growing number of women leaving the kitchen and joining men at the workplace. Be it working with corporates, running businesses or just plain and simple following their passion. Women end up spending most of their time doing stuff that’s more productive and fulfilling. Working women typically spend a large amount of their disposable income on buying takeaways or eating out. This is again a key demand-driver for the food delivery business.

#4 Expanding Variety of Cuisines

Today, a lot of food that satiates the taste bud, ix extremely difficult and time consuming to prepare at home. Think of the effort in order to make that favourite pizza at home from scratch. Or cooking that chicken biriyani at home when guests visit our home. Firstly, the amount of time that has to go in to the cooking. Secondly, we can expect food that is consistent in quality and taste. If all this can be ensured by just using your phone for just 5 minutes, then ordering food certainly does make a lot of sense.

#5 Rising of Contract Cultivation

 Contract cultivation is essentially a binding agreement that guarantees farmers’ purchases from giant global companies, provided they agree and supply the preferred crops to the companies. For example, McDonald’s currently has over 400 farmers cultivating potatoes for them in over 2000 acres of farmland in the state of Gujarat.

 The shift is here to stay.

For a hotelier, he clearly has 2 options today. Investments includes rent, designing interiors, furniture and so on. This heavy cost forces him to sell his food at a premium in order to recover his investment. Otherwise, he can just set up a kitchen and have food delivered to his customers doorstep thereby saving on the investment required to set up a restaurant. Hence, he caters to a greater customer base than a traditional restaurant at a lower cost, giving him a high and lucrative return on investment.

Shall be back with more dynamics in the food delivery system involved shortly. Until then, stay safe.

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9 thoughts on “Food Delivery Services – 5 reasons for business growth”

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