Is This What the Future of Food Delivery Looks Like?

Ann Saunders

by Ann Saunders

Insights & Planning Supervisor

During the throes of the pandemic, many of us began experimenting in the kitchen. We sauteed unfamiliar produce in obscure spices, made soups and stocks, and tried our hand at emulsifying and infusing. We perfected sauces, and we discovered the joy of baking bread at home. #bread #artisanbread #naturallyleavened #wildyeast #realbread #baking #foodie. According to Hunter’s Food Study Special Report Wave Two, nine months into the pandemic, Americans were cooking more (51%) and baking more (41%) than they did during the same period the prior year. Cooking and baking became our entertainment and an outlet to channel fears and anxieties.

But as time went on, the allure started to fade, and we had our fill of sourdough. We also craved dishes from local restaurants and became passionate about supporting our favorite community eateries that were struggling to stay open — so we turned to our smartphones. Order after order, we contributed to the U.S. online food delivery market, which Statista projected will reach $63.02bn in 2022.

Even before COVID-19, food delivery was seeing consistent growth. But during the course of the pandemic, delivery apps reported a massive acceleration in orders. DoorDash pulled ahead of the competition in 2020 and held 57% of market share in the U.S., but the competition remains stiff and the landscape crowded. DoorDash, Grubhub, Uber Eats, Postmates, Seamless, Gopuff, Wolt, Deliveroo — the list goes on and on of companies whose business model is rooted in consumer convenience. But that didn’t stop Marc Lore from launching his new food delivery venture in 2021 — Wonder.

To be clear, while Wonder is another convenient option for food delivery, it wasn’t a product of the pandemic, nor is convenience its reason for being. The company was founded by Lore and his brother in 2018, while Lore was still an executive at Walmart, and its mission is to elevate the meal delivery experience.

Unlike other food delivery apps, Wonder is a mobile restaurant kitchen that arrives at your house with a chef who will finish and plate your meal outside, seconds before walking it up to your front door.

What’s even more differentiating is that Wonder partners with popular, often celebrity, chefs and restaurants to create exclusive menus that can be delivered to consumer doorsteps. The company secures the rights to recipes, then learns firsthand how to make them so that they can be recreated in the Wonder kitchens, tasting just like the originals.

Wonder launched in the affluent town of Westfield, New Jersey, which represents about 17,000 households. It has since expanded to surrounding towns in north Jersey, reaching about 130,000 households.

So how does it work? People within its service area download the Wonder app and select different dishes from exclusive menus. There are currently 19 restaurants available. A few of note are:
• Bobby Flay Steak (Atlantic City, NJ)
• Fred’s Meat & Bread (Atlanta, GA)
• Maydan (Washington, DC)
• Chai Pani by Meherwan Irani (Asheville, NC)
• Frankies Spuntino (Brooklyn, NY)

The Wonder team starts making the food at a central hub. Then, a “chef on the road” drives a mobile kitchen to your home. The van is equipped with professional-grade cooking equipment, which the chef uses to finish the food outside your location. Proximity to your doorstep ensures it is piping hot and has not been sullied in transport.

Prepping the food in a central kitchen helps keep food costs lower than in a restaurant. And unlike traditional delivery services, which collect fees from restaurants for each order, Wonder will pay restaurant owners and chefs a single fee for the exclusive right to deliver their food, which is another notable difference from other apps.

Reviews of the food and the experience have been positive so far…

• “Everything tasted great, and having it served from the chef to my door, faster than a restaurant, is a game changer.”
• “Blown away. Cannot believe this is our new reality in the suburbs!”
• “It’s pricey, but the food is excellent and the price matches having a chef cook for you in your driveway!”

The service area remains limited, which frustrates some…

• “I’m advised that I’m on the waitlist as my area is not being served yet. I can walk 5-10 minutes where their trucks are located, yet my area is not part of the area they serve. I guess Wonder is for the upper middle class and wealthy towns only.”
• “Wonder keeps telling me for months now that it’s not available in my area, yet I watch trucks drive past my block quite often to get back to home base. So you’re telling me you’ll drive past me but won’t drive to me? That makes no sense.”

And some are even more dissenting…

• “Bad for local economy and environment! This app takes business away from the local restaurants, doesn’t pay local taxes, consumes parking spaces, and idles their engines for prolonged periods of times, contributing to global warming.”

In full transparency, concerns have not been limited to one guy on Google. According to a July article by The Spoon…

“By and large, the residents of the northern New Jersey suburbs where Wonder delivers agree that the well-funded startup’s food tastes great.

“What they can’t agree on is whether having hundreds of Mercedes diesel vans idling curbside each night while Wonder employees prep meals is a good idea at a time when most experts agree climate change is fast becoming an existential crisis.”

The company claims that an all-electric fleet is in their future, but in the meantime, they are offsetting carbon emissions. The complaints likely won’t end there. As Wonder continues its suburban expansion, “Not in my backyard” could become a collective reaction.

Only time will tell whether Wonder will be successful, but it is certainly an interesting proposition. The company says the long-term goal is to feature menus from 30 to 40 of the most incredible chefs and restaurants across the country and expand coast to coast by 2035, but they won’t be without challenges.

In its 2022 State of the Restaurant Industry, Yelp indicated that consumers are in fact ordering less takeout this year, even if it remains more prevalent than it was pre-pandemic. Instead, it says, “Customers returned to restaurants in force in the first quarter of 2022, making more reservations and seeking out indoor dining at higher rates than a year ago — particularly at places that offer a special experience.”

But what a difference a few months makes. A survey conducted in June by Morning Consult found that consumers may have finally hit their limit, with over half (53%) of U.S. adults reporting that they changed their eating and drinking habits as a result of inflation. All that to say, it is a challenging time to be in the foodservice industry. And not just because of the shifting dynamics of consumer discretionary spending.

According to McKinsey, the “economic structure [of food delivery] is still evolving,” and most platforms remain unprofitable. That hasn’t hindered investments from happening in the space though. “Wolt raised $530 million in January 2021, REEF Technology raised $700 million in November 2020 and Rebel Foods $26.5 million in July 2020.” Which means Wonder, which recently raised $350 million in funds, will have these other delivery brands nipping at its heels as it attempts to grow and become a household name.

Personally, I fear the novelty of Wonder will eventually subside and the higher-income target will resume on-premise dining, leaving Wonder with a very niche market of special occasion catering. But I hope not. In A Room of One’s Own, Virginia Woolf wrote, “One cannot think well, love well, sleep well, if one has not dined well.”

Wonder’s mission to elevate the delivery experience is all about providing access. Access to great restaurants and chefs that people may not normally be able to experience. It’s a wonder-ful mission, and one that I can get behind.

 

SOURCES:

https://www.statista.com/outlook/dmo/eservices/online-food-delivery/united-states

https://www.foodnavigator-usa.com/Article/2020/04/15/Survey-Cooking-at-home-will-become-the-new-normal-post-pandemic#

www.businessofapps.com/data/food-delivery-app-market

www.thespoon.tech/late-stage-empire-sort-of-stuff-wonder-faces-backlash-over-environmental-impact-of-vans/

https://www.restaurantbusinessonline.com/consumer-trends/customers-are-dining-out-more-getting-less-takeout

https://morningconsult.com/2022/06/21/inflation-has-consumers-cutting-back-on-dining-and-meat/

https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/ordering-in-the-rapid-evolution-of-food-delivery

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