Eating in: delivery food could become major part of restaurant revenue

By Emily Hamann
The Bellingham Business Journal

If you want hot food delivered to your door, you now have options beyond calling out for pizza.

Over the past few years, a number of services have sprung up across the country that pick up food from a variety of restaurants and deliver it to the customer.

In Whatcom County, locally owned and operated Viking Food has operated the service for years. Recently UberEats, Doordash and Postmates also began serving Bellingham.

These services are on the rise as more and more customers are getting their food delivered.

Pentallect, Inc., a food industry strategy firm, projects that over the next three years the third-party food delivery market is expected to grow 13.5 percent annually, reaching $24.5 billion by 2022.

“It’s the age of convenience I think we’re in now,” Kyle Mattox, co-owner of Viking Food, said.

When Viking Food started in 2013, it was the only service of its kind in town. It began with the mission of only working with local restaurants.

It has stayed true in that commitment, even as the market has gotten much more crowded.

“We don’t work with chains, and Bellingham has that local feel, so I think that gives us an edge,” Mattox said.

Since it started, Mattox said improvements in technology has made food delivery better, providing more accurate time estimates and GPS directions.

Customer expectations, however have stayed the same.

“They just want nice hot food,” Mattox said, “and they want it quickly.”

Mattox said he isn’t worried about the other delivery operators in Bellingham now.

“I don’t think we’re having any problem keeping it competitive,” he said.

“Customer service is the name of the game.”

Mattox said third-party delivery has many benefits for restaurants.

For one, it gives restaurants access to a new customer base. People aren’t buying delivery instead of sitting down in a restaurant — they’re buying delivery instead of cooking at home.

“The people that order from us aren’t going to go into a restaurant,” Mattox said.

The delivery app can also be a good way for customers to learn about a restaurant.

In that way it can act as marketing for restaurants and attract new loyal customers.

As third-party delivery grows, the restaurant industry is rushing to adapt, Anthony Anton, CEO of the Washington Hospitality Association, said.

“We have more customers that want to buy our products,” Anton said. “So that’s a good thing.”

On the other hand, it does pose some new challenges. Currently, third-party delivery makes up about two percent of restaurant sales, Anton said.

Eventually, however, the association predicts it could make up 40 percent of sales. That could cause a major disruption in the way restaurants operate.

Customer flow is one problem, Anton said. Restaurants have to figure out how they’re going to fit in incoming to-go orders if they already have a full dining room and backed-up kitchen. Some restaurants might choose not to take to-go orders during rush times.

Other restaurants might choose to forgo the dining area entirely and only serve to-go orders.

The other thing restaurants should be concerned about is packaging and food quality.

“If we’re really honest,” Anton said, “a great piece of Alaska salmon was not meant to sit in recycled cardboard for 25 minutes and still taste great.”

Anton said new packaging could help, but it’s another thing restaurants need to figure out as third-party delivery continues to grow.

Richard van Dommelen, owner of the Jeckyl and Hyde barbeque and pizza restaurant in Bellingham, said there are pros and cons to third party delivery.

“It’s fast for the customer. They can order from home,” van Dommelen said. “It’s convenient for them. It’s revenue for us.”

If it’s a busy night, however, some delivery customers might have to wait a while before getting their food, which could cause frustration, he said.

He also worries that the quality of food degrades as it travels to the customer.

“You’re not going to get the top of the line quality all the time as something’s getting cold as it’s being delivered,” he said.

On the plus side, he said the delivery services have helped spread the word about his restaurant.

He has seen who hadn’t heard about the restaurant, saw it on the delivery app, and became regular walk-in customers.

“I would say, yes, it’s a great marketing tool,” he said.

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