The rise of foodie culture has caused a seismic shift in how we eat, and now even the most time-crunched consumer is unwilling to sacrifice quality for convenience.
Enter on-demand, mobile-app ordering – from more established services like GrubHub and Postmates to newer players like UberEATS and DoorDash.
DoorDash, a San Francisco-based company founded in 2013, is one of many delivery startups that collectively raised about $1 billion in funding in 2016, according to CB Insights. DoorDash alone received $187 million in funding, which allowed it to expand outside of its established California territory to other large markets and particularly out West, including Las Vegas and Phoenix.
While DoorDash just launched in the Vegas market in January, the company has already blown its initial goals "out of the water," said Brandon Silverman, DoorDash general manager for Las Vegas. The presence of competitors such as Postmates and UberEATS in the Vegas market doesn't trouble him.
"We did a lot of research into the Las Vegas market," he said. "There are many successful delivery businesses here already, and many great restaurants and customers with a demand for this service. Instead of focusing on the competition, we're focusing on what we know is important for the customers: having a great selection [of restaurants] and great customer service, and deliveries that come quickly and come correctly."
Room for growth
The numbers support his outlook, according to Morgan Stanley Research. While the restaurant industry brings in about $500 billion in revenues annually, only $11 billion comes from online delivery. And when you exclude pizza – long the king of the delivery domain – it shrinks down to $4 billion – less than 1 percent of the total restaurant sales market. Third-party online delivery is basically in its infancy.
In Las Vegas, DoorDash has hundreds of restaurant partners that span from higher-end restaurants and local favorites to fast food and national chains. They've already expanded once since launching and are planning on greater expansion throughout the Las Vegas Valley.
Yet with restaurant delivery, you're still paying the restaurants' prices, plus delivery service charges on top of that. Suddenly the burrito you just didn't feel like driving to get yourself cost you $25 for the convenience.
You're also not getting the kind of customization you would have cooking your own food. Say, perhaps, you have a severe peanut allergy and cannot be assured that a particular place won't accidentally cross-contaminate your food, or you have a severe aversion to mayonnaise and a general distrust that the "no mayo" specification will be honored after one too many disappointments.
The growing meal kit industry – which includes companies like Blue Apron, HelloFresh, and Plated – appeals to those who still want to cook at home without spending all that time on meal planning and trips to the grocery store. With carefully portioned ingredients, meal kits also spare the excess of having to buy a whole bunch of scallions when you only need two or spending $6 on a bottle of esoteric spice for one-eighth of a teaspoon, not to mention having leftovers that will just take up space in the fridge before it's finally time to throw them out.
The problem is, you still have to cook everything.
That’s where a third prong in the food delivery fork comes in: fully prepared on-demand meal delivery. Not as expensive as restaurant delivery, though more expensive than meal kits, to be sure. This is where your time vs. money differential calculation may vary.
And there aren't quite so many players in this space yet, with Freshly and Munchery probably being the most recognizable names.
The concept might seem new, as food-tech services churn out of Silicon Valley tech startups, but Carl Ferro, co-founder and president of Sunfare, has been doing this for 20 years.
From Phoenix to Las Vegas
Sunfare launched in Los Angeles in 1997 and expanded into Phoenix 14 years ago. The company creates fresh, healthy, chef-prepared foods designed to suit an individual's height, weight, activity level, and dietary preferences and restrictions. Meal plans include monthly subscriptions and a la carte weekly options for breakfast, lunch, dinner, and morning and afternoon snacks.
"Plans are completely customizable," Ferro said. "You can go online, view the monthly menu and make meal substitutions based on your likes and dislikes or [what you feel like having], and we also have client counselors you can email right from the website. It's a completely automated interface. We're as much a tech business as a delivery business and nutritional food business."
Everything can be adjusted, from calories to ounces of protein or starch, depending on an individual's dietary and fitness needs. The option to work with nutritionists to develop meal plans around these macros is what really sets Sunfare apart from other meal delivery services, Ferro maintains. It's also less expensive and much healthier than ordering from restaurants; the downside is that it takes a bit of preplanning.
"Our meals are a little bit cleaner and have less fat than ordering from restaurants, and the amount of money you'll spend is comparable or even less," said Ferro. "If we can put food in your fridge you love to eat and you eat the food, you'll get the results."
In Las Vegas, Chefery recreates the fine dining experience in the comfort of your own home and at a fraction of the cost. Founded by graduates of the renowned Culinary Institute of America in Hyde Park, New York, Chefery serves gourmet, chef-prepared meals delivered directly to customers' homes.
"We wanted to give an elevated at-home delivery service," said Brian Skenandore, founding partner of Chefery. "We deliver to customers' homes par-cooked meals that are 90 percent of the way [that they can then] finish in the oven or microwave.”
Chefery doesn’t have the expenses of restaurant space or house staff so it is able to pass those savings onto the customer “at a pretty good reduction from restaurant prices," Skenandore said. Items like filet mignon and Atlantic salmon, for instance, are in the $15 range.
Chefery was recently set back after a kitchen fire closed the business until a new commercial kitchen space can be obtained, but Skenandore remains positive and says that he is using the time to focus on retooling some aspects of the business to help relaunch even stronger in the next year.
Skenandore says about one-third of their clientele lived alone and didn’t want to cook every night but also didn't want to go out every night. Retirees, doctors, personal trainers, and new parents helped build a "small but loyal" following since launching in 2015. Chefery focused on serving fresh and in-season ingredients, with an emphasis on nutrient-dense superfoods.
"It was a pretty big blow [but] we have a lot of groundwork laid for this company," said Skenandore of the fire. "This is a good opportunity to figure out what worked and what didn't. We were growing ten times annually and would have been close to $1 million in revenue this year.”
Skenandore isn’t worried about competition in the marketplace for his still-small startup, even with having to take a year off to relaunch.
"I feel like the market is so big and there's so much room for different kinds of [services]," he said. “There's a big hunger for this kind of service that saves so much time and money."