Food shopping has been evolving ever since the advent of Ecommerce in the early ’90s and the UK is now one of the most digitally connected economies in the world with online food shopping growing at 9% a year according to the latest statistics from ONS. But as shoppers’ expectations and needs change, a canny food business has to ask itself how it can harness new tech to anticipate those needs and increase margins across the board.
There are many reasons people shop online; the ‘want it now’ culture is undoubtedly a big part of this. Online grocery shopping has already stepped up a level to accommodate this desire with Sainsbury’s introduction of Chop Chop in London whilst Tesco’s MD, Adrian Letts, claims they could deliver in less than an hour if there was sufficient demand. But with most Londoners living within half a mile of a Tesco branch, will that demand exist?
But it isn’t just the big supermarkets that are getting in on the act. Look at businesses like Deliveroo and Uber Eats who have changed the landscape of food delivery forever. And in the US, Amazon Fresh have tied up with All Recipe to allow users to order a single meal for two in the morning and find it waiting for them at home that evening. This delivers the freshest ingredients and a level of spontaneity that can’t be matched.
So how does this translate into the food service industry…
Look further out of the UK and there are some big American companies leading the way. Dine Market was one of the first to the market. Through them restaurants and distributors are directly connected; a chef that orders online at the end of service can be confident that the order will be delivered in plenty of time for service the next day. In Tokyo, SEND directly connects farmers and growers to restaurants, and handles the farm to kitchen delivery through their own transportation infrastructure.
In the UK distribution is still controlled in the main by a small number of major distributors, but that looks set to change as tech startups begin to enter the sector. Innovative companies such as GoKart, FoodChain and COLLECTIVfood are poised and ready to grow this increasingly buoyant sector. This will generate strong opportunities for small and artisan producers, and give them access to a wider market than they would otherwise have.
Already a number of smaller producers have found that providing an online sales channel can be a real game changer when it comes to driving up sales to larger food businesses and once this new technology is up and running it should create exponential growth in online food sales direct to consumers. But it is also clear that one of the factors slowing the growth of the channel is the lack of confidence that food ordered online will arrive in optimum condition due to delays between order and delivery. Independent online producers who can link up with disruptive tech companies to embed immediacy in their online channel will be the first to see this growth hit their balance sheets.