Why We Built Feedr The Way We Did
by Feedr COO and co-founder Lyz Swanton
I’ve read a lot recently in VC opinion pieces about how food delivery has had its day in the sun, but inherently it’s a loss making business, funded by either restaurants to support their normal business, or VC dollars.
We think it’s time to totally change how we think about food delivery.
If you look at it from the perspective that everyone needs to get food to them in order to eat it, ‘delivery’ is just the last link in the food supply chain. And from that perspective, the last mile still has to happen. Whether the last mile is a Pret-a-Manger store that someone walks into, or a large corporate canteen, someone needs to get that food into the final consumer’s hands, and their mouths, in some way.
We believe that you need to look at the chain as a whole, and find the most efficient way to get great, high quality, healthy food to people in a way that eliminates waste and promotes sustainability.
Traditionally, in any city where hundreds of thousands of people are planning on eating lunch in the same place and at the same time everyday, they would do one of three things:
- Buy food from a restaurant or shop
- Bring food from home
- Eat in a communal canteen
And then, there was food delivery
The brave new world of delivery soon came along, and opened our eyes to the fact that we could have everything we ever wanted in 32 minutes. Not just a cheap takeaway stir fry (though we all do love that every once in a while, don’t we?), but good food, delivered. And we all rejoiced.
When it came to thinking about the costs of that model, things became a little less clear. In a one-to-one, on-demand delivery model, if you are ordering one meal, then you’re paying for someone to go get that meal and bring it to you. To pay for that, you get charged a delivery fee, and the restaurants gets charged for your business for them. This all becomes pretty difficult to fit into the average lunch price.
At the same time, it’s hard to build a successful grab and go business. Delivery is a blessing and a curse – it brings you new business and awareness, but eats away at margins. 60% of restaurants fail within one year of opening, rising to 80% at the 5-year mark, and high streets are dominated by chains who are able to churn out enough volume to justify rents – usually sacrificing quality to do so.
The result? People still compromise on what they eat at work.
We aren’t happy with the status quo. The way people eat at the office is already changing, and there’s more and more evidence that we all want more. People are demanding healthier, higher-quality options, all with greater convenience. Corporate canteens are on the decline, and with real estate prices as they are in London, it’s no wonder companies are thinking hard about whether this is the right choice when individuals demand more variety and quality than the typical corporate canteen can provide. More people are buying lunch out, and the average time spent on a lunch break in Britain has dropped to 34 minutes.
What does a better model look like?
So far, we’ve established people are looking for better quality, more variety, and time-efficient options for their lunch at work. The ideal delivery model then must encompass:
- High-quality food, made fresh, from quality ingredients
- Low waste and a lower carbon footprint
- Responsibility to people throughout the chain – this means enough room for everyone to be making a living wage
- Convenience & affordability for the end user
- A unique and diverse set of food options that feels personalized and meets a diverse set of personal tastes and requirements (more on this in part 2 in our series!)
How is Feedr different?
Feedr is disrupting the traditional food delivery model, because we built it with the above factors in mind. We wanted to build something intuitive, flexible, and simple, that would tick all the boxes a 21st century city-worker is looking for from a lunch provider, while supporting London’s independent food scene as much as possible.
- It’s about understanding the economics of the vendor
The economics of a grab and go restaurant in central London, or any major city really, mean that in order to be successful, you either have to have very high footfall over one service period, or you need to make it as an all-day site. We thought about how to increase utilization of restaurant capacity in a much more efficient way.
Effectively, Feedr’s pre-order model is a way for our vendors to perfectly predict demand. By sending them batched orders ahead of time, we give our vendors the flexibility to prep our orders during their quieter times. This means we provide them with extra business that they can handle, by optimising their kitchen and staff capacity.
- Making the best use of delivery capacity
We believe we can make a delivery model as cost effective and efficient, if not more than a local grab-and-go shop. The model overall reduces real estate costs / increases real estate utilization, and slightly increases delivery costs as a whole across the chain.
We make best use of delivery capacity by grouping orders together, and then clustering people who are ordering at or near the same location.
Choice on the menu is limited each day to do this – similar to a normal restaurant which only provides what is available that day. What sets Feedr apart is that we can rotate menus each day, rather than seasonally at best in the typical restaurant.
- Reducing waste throughout the model
By perfectly predicting demand, we reduce food waste considerably. The majority of food waste at a restaurant is from overproduction. We can eliminate this.
There is also no waste on-site. Each meal that is delivered is delivered to an individual. When compared with a canteen, it’s much less wasteful.
This means lower costs for the vendors, and more margin can go into great quality ingredients.
We also reduce packaging waste – while there is still disposable packaging for the actual item, we use reusable transport boxes, and a maximum of one bag per 3-5 items, rather than the one bag per item seen in a typical food delivery model. We believe we can further reduce this in the future by replacing disposable bags with reusable thermal ones, and are targeting 100% eco-friendly packaging by early 2019.
- Focusing on restaurant innovation
We seek out vendors that are doing the best in their category. This means we’re looking for the best classics, and the best innovations. This is one of our favourite parts of the job – we’re able to scour London for the people doing interesting, new things both in the food they’re producing, and in how they are doing it.
We have vendors who are reinventing the humble meeting sandwich like Kaleidoscope and Norigami.
Sweet potato, chili and tahini rice paper rolls by Kaleidoscope
Smoked trout with pesto and roasted veggies by Farmstand
Sharing platters by Detox Kitchen and vegan tagine by Deliciously Ella
To sum it all up
We think food delivery services have the potential to be a huge advantage to the hospitality sector, if done right. Independent vendors don’t usually have the capacity or the desire to deliver themselves. Feedr’s batch-order model helps vendors to optimise their kitchen capacity. Additionally, because we focus on building great tech and work with over 80 eateries across London, we are providing the city’s offices more choice, increased flexibility, and an easier ordering system, modernising both the traditional office catering and food delivery models in one go.
So, what do people then do with all the time they’re saving at lunch not standing in line, and more energy they have from eating healthier food each day?