startups food

19.05.2015

“The future of restaurants is no restaurant” – startups changing the way we eat

Image | Eatwith

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”

This is how a recent article in Techcrunch began about the interface battle. The mobile phone is a powerful tool that can unite supply and demand (those who need something with people who have something to offer) and create intangible corporations (hotel services without property, distributors without inventory or transportation companies without a taxi fleet). The one that is easiest to use, or finds the best design to simplify the complexity of the process, wins. This change is also coming to the restaurant industry.

“The future of restaurants is no restaurant”,  writes Jason Calacanis about his investment in BENTO, an Asian food company that reduces the options (as the menus at Asian restaurants can be quite long), but also the time and ordering process.

food startups

How restaurants are changing: logistics, distribution and food on demand

Bento is one of many startups in the sector that is shaking up the food industry, and it is changing in several different ways. From logistics to distribution, distribution on demand and even food substitutes – there are more and more companies that are changing or trying to change the way we eat. Let’s look at some examples:

  • Distribution. Founded in Denmark in 2001, Just Eat has been dominating online food distribution for the past fourteen years. It went public in 2014, and it has been expanding internationally by acquiring local players: in Spain, it bought Sindelantal before Rocket Internet took Nevera Roja. Another recent example is Uber, which launched its UberEATS service in Barcelona earlier this year, through which it offers a daily selection of dishes from various restaurants in the city. All of them compete with the same concept: you’re hungry and you want to eat, so instead of going off to a restaurant or cooking, you order online. The best known American version of this model is GrubHub.
  • Catering on demand. Eatwith, Kitchen Surfing, Feastly… the idea is to connect supply and demand, and these startups use the Airbnb model to bring experiences and dishes to people by connecting them. From I’ll have some extra space at home and so I’ll start my own small restaurant’ (Feastly), to ‘I like to cook and can commute, so I’ll go to your house and take care of it there’ (Eatwith).

food startups

Image | CBSinsights

  • Fast food 2.0. BENTO brings Asian food to your home. The company is still testing its idea: it only has an app on iOS and only works in San Francisco. If all goes well, the next step for startups like this is to escalate: take the model to other cities and replicate it. Like Bento, Lish is another delivery service that offers food prepared by local chefs in Seattle.
  • Local product distribution. Instacart has already raised $274 million in five rounds of funding. It started in 2012 and is one of the juiciest of Silicon Valley startups. It’s model? Local products – vegetables, meat, beans, fish, dairy – at your house in just an hour. It is another of those intangible startups: no warehouse, no employed delivery men. “Instacart uses software that makes ‘hundreds of calculations’ a second to determine the right time to dispatch a shopper, based on weather, traffic, sporting events, and other factors, so that the groceries are still fresh when they arrive at the door,” explained the Washington Post. As with Uber, part of the company’s value is in route calculation. The Spanish version is Comprea, which is testing its model in Valencia before expanding to other cities.

CB Insights has published a report with a graph that explains these as well as other models. Quite a number of these startups are changing the hotel and restaurant sectors at full speed, and will have an equal impact on businesses and consumers. Are you ready?