Delivery services such as Delivery Hero or HelloFresh were among the big beneficiaries of the corona pandemic. That’s it. New trends are conquering the market.
Delivery services such as Delivery Hero or the meal kit delivery company HelloFresh were among the big beneficiaries of the corona pandemic. Many shops were closed at the time and dining out at restaurants was only possible to a limited extent.
It was a time when contact with other people should be avoided wherever possible in order to quickly get the spread of the pandemic under control. What could be more obvious than having the necessary groceries or entire meals delivered?
The industry prevailed A mood of optimism
New providers were springing up like mushrooms. The delivery service Gorillas, for example, managed to become a billion-dollar company within just a few months of being founded. It didn’t matter whether the company was in the black. Investors were willing to put a lot of money into this booming industry.
The business idea was not new. The first pizza bakeries delivered Italian specialties to your doorstep as early as the 1960s. Above all, the business idea is simple, the barriers to entry are not particularly high. “You have to find a few drivers. You have to connect a few restaurants. And then you can get started,” says Stefan Riße from the fund company Acatis. This fueled the boom during the pandemic.
Previous Business models have a hard time
But that is exactly where the problem lies. “We haven’t yet figured out how it will be worth it at some point if I deliver a meal that is worth between 15 and 30 euros and I have to ride my bike for ten minutes to reach my customer,” says Riße.
And not only that. Everyone involved wants to make money from the deliveries: those who prepare the food, those who deliver the food and those who provide the logistics. “The volume of orders doesn’t seem to be enough, even in large cities, for this to ultimately work profitably.” The working conditions of courier drivers are repeatedly criticized.
Many customers value the quick delivery of groceries or ready-to-eat meals. But not everyone is willing to cover the costs of bringing it to the door. The fact that the economic conditions have deteriorated is putting additional pressure on delivery services. Many customers have to save money.
Not all delivery services are the same
A lot is changing in the industry. The delivery service Yababa, which specializes in oriental food, is bankrupt. The organic supplier Alpakas is in bankruptcy proceedings. The former Edeka subsidiary Bringmeister was sold to the Czech competition. The online supermarket Knuspr wants to become profitable soon with this takeover.
Collaborations are the order of the day, including concentrating on fewer locations. After two and a half years, the food delivery service Delivery Hero has separated from its share in British industry rival Deliveroo. Start-ups like Circus rely on new ideas: customers can use an app to help themselves from a menu. Some of the dishes are pre-cooked and delivered in-house.
Another trend can also be observed, says one Study by the Hans Böckler Foundation. Providers like Knuspr and Picnic are investing heavily in automation to reduce costs. “In the future, orders could be put together fully automatically and brought to the delivery vehicles.” Deliveries using drones are already being tried out.
“A consolidation of the market seems inevitable,” the study continues. “Few will survive.” The researchers predict that the market will concentrate on one or two large companies and a few niche providers.