Should your restaurant start offering delivery?

Arguably the most popular industry that young entrepreneurs want to get into is foodservice, especially in a food-loving country like the Philippines. Every block in Metro Manila has its own signature food joint, each competing to be the next viral Internet hit, and each offering the latest gimmick, trend, and hybrid cuisine.

But one area of foodservice that has not gained much attention is the food delivery business. As the digital era continues to take over Filipino life, more opportunities are becoming available to Filipino food brands looking to offer delivery services.

When ride-sharing and logistics services giant Grab Philippines unveiled its smart city vision to “empower a future of seamless mobility,” on-demand food delivery services were one of the company’s top priorities, along with logistics, cashless payments and financial services, to be integrated into its app.

This means that Filipinos can now not only book different types of Grab rides to get to work, they can also pay for their favorite lunch meal with GrabPay, deliver gifts to their loved ones through GrabExpress, and even order their dinner and eat in the comfort of their home with GrabFood.

GrabFood, in particular, can spell huge opportunities for food merchants in the Philippines, as the transport network vehicle service company has promised to make significant technology investments in its platform to bring an expanded range of online consumer services this 2018.

“Consumers will now be able to order food from restaurants near them through the newly launched GrabFood within the app. With no minimum order required, consumers can satisfy their cravings and order from the wide selection of cuisines available, enjoying the convenience of having their favorite food delivered fast, right to their doorsteps,” Grab said in a statement.

More important, foodservice delivery is going beyond its status as simply an add-on for restaurants, becoming a necessity in the industry globally. According to international information firm The NPD Group, foodservice delivery in the United States has been taking in sizable gains in terms of visits and sales over the last five years, despite the general weakness of the market.

Restaurants saw an increase in delivery sales by about a fifth, while delivery foodservice visits were up 10% on the back of the growth of digital ordering, which now represents over half of all delivery visits.

“Delivery has become a need to have and no longer a nice to have in the restaurant industry,” Warren Solochek, The NPD Group senior vice-president for industry relations, said.

“Restaurants need delivery in today’s environment in order to gain and maintain share. It has become a consumer expectation.”

The NPD Group report, titled ‘The Future of Foodservices Snapshot: Restaurant Delivery,” goes on to show that consumers have become so accustomed to ordering delivery that they are ordering it at breakfast and lunch in addition to dinner, which historically has been the most popular daypart to order it. Growth of delivery at dinner has remained flat over the last five years and has grown at breakfast and lunch.

Although digital ordering is a major contributor to the growth of foodservice delivery, using the phone to order still represents 49% of delivery visits. Third-party delivery services, like UberEats, Grubhub and DoorDash, account for much of the digital delivery growth. However, the share of digital delivery by third-party services is more than double among full-service restaurants than quick-service outlets.

“Convenience is among the chief reasons why consumers visit restaurants and delivery brings a heightened level of it,” Mr. Solochek said. “We forecast that delivery will grow over the next five years and the growth will source to non-traditional delivery outlets and dayparts.”

In the Philippines, the availability and the growth of services like FoodPanda, Honestbee, and The Delivery Guy is proof enough that such international trends are making their way here. The restaurant landscape is changing fast, and sooner or later Filipino brands will have to adapt.

In Grab’s case, its existing and new delivery partners from its already-thriving GrabExpress courier service, can generate additional income and job opportunities from delivering food orders on top of delivering parcels.

The company plans to provide food establishments and restaurants with their own online storefront to serve the online and mobile population by leveraging the fleet of delivery partners, eliminating the need to rely solely on foot traffic by customers to their shops or stalls as their primary source of revenue.

They will also get the added benefit of incremental business revenue by tapping the large user base of Grab and gaining access to GrabFood’s promotional schemes and marketing channels to grow their business.

“GrabFood is the next major step in our move to serve the daily needs of consumers. Food delivery is a natural extension of our transport offerings. Each day, millions of people in Southeast Asia rely on ride-hailing services to bring them from place to place, as well as food delivery services to save time from travelling around in congested cities to satisfy their cravings. With the expansion of GrabFood across the region, we are working with local merchants and delivery partners to deliver the best of Manila’s kitchens to the doorsteps of our consumers,” said Brian Cu, country head of Grab Philippines. — Bjorn Biel M. Beltran