The Food Delivery market in the world

Food delivery in 2023 has gone through a very interesting phase. After the vertical growth driven by the COVID-19 pandemic, trends are stabilizing. This is especially the case in Western markets (e.g., Europe), which are less responsive at this time than emerging or booming countries such as India, China, or the U.S. The reasons are complex and may depend on consumer density, disposable income, and many other factors. At the same time, large food delivery companies show different results: some decreasing, others showing sustained growth.

Food delivery is going through a phase of change: it has to make investors, employees, customers, and restaurants happy, not to mention governments. Managing this complex and ever-changing ecosystem is quite a challenge.

The global reach of food delivery is vast. In terms of consumer purchase value (or GTV), the global market is worth about $361 billion. About 2.6 billion people can be defined as food delivery users, that is, people who use it several times a year. This is what attracts entrepreneurs and investors.

Recent research predicts that the global food delivery market will grow at a CAGR of 18.1 percent from 2023 to 2032 (source: straitsresearch.com). There are many analysts’ forecasts, and all of them point in the direction of industry growth and consolidation.

361

Billion € turnover

+11% VS 2022
(Straitsresearch.com)

+18,1%

CAGR

PLATFORM-TO-CONSUMER
(2023-2032)

Italian market consolidates

The value of the digital food delivery sector in Italy is currently of 1 billion (source: FIPE 2022) with another 1.8 billion generated by so-called “offline” or traditional food delivery, i.e., delivery that takes place through traditional restaurant channels (e.g., telephone) a service that has always existed and is home delivery through the business’ staff up to a certain radius of miles.

As for the mode of service, “offline is a bit of a backwater because it was what had taken off the most during the pandemic; once the health emergency ceased, many decided not to continue,” Luciano Sbraga, director of the Fipe Confcommercio Studies Office, explains to Adnkronos.

“Online food delivery is much more developed in large urban centers partly because,” he explains, ” it is the same platforms that develop more business in cities where there are more customers, while especially in the South, offline work more.

The online market involves an audience of about 25-30,000 establishments, representing about 18 percent of the total 150,000 establishments throughout Italy.

Another interesting data point concerns home grocery, which is now increasingly cleared through customs. According to the Netcomm – Politecnico di Milano B2c eCommerce Observatory, however, the progression of Food & Grocery in 2023 will slow down (+1% compared to twelve months ago). Online penetration of total Retail purchases is 12 percent, stable compared to 2022.

1,8MLD€

VALORE FOOD DELIVERY TRADIZIONALE ITALIA

1MLD€

VALORE FOOD DELIVERY DIGITALE ITALIA

20MLN

ITALIANI CHE ORDINANO A DOMICILIO

150.000

RISTORANTI, BAR, GELATERIE CHE CONSEGNANO A DOMICILIO (1 SU 2)

In the dynamic world of the restaurant industry, staying abreast of the latest trends and adopting innovative strategies is essential to a venue’s success. The year 2023 was very significant in terms of costs and rising inflation and in this context, it is essential that higher costs than in previous years also begin to correspond to a Quality level of delivery and takeaway service to make a difference against the increasingly large and fierce competition.

The elements that make a quality delivery and takeaway service

The importance of selling through direct restaurant channels

One area in which restaurants should continue to invest to encourage direct sales is the digital end-customer experience. It has been found that customers generally prefer to order through the direct channels of restaurants. In 2023, 40% of consumers opted to order directly from the restaurant’s website, compared with 13% who expressed a preference for apps or third-party websites. Therefore, to protect direct sales, the restaurants should work to make direct and in-store ordering channels more appealing, in order to compete with the more expensive menus offered on third-party channels (Source: The future of restaurants: The new normal and beyond – Deloitte 2023).

Quality as a guarantee of loyalty

Another critical element for success with delivery and takeaway is ensuring a high-quality delivery and product experience for the customer. Also according to the survey conducted by Deloitte, 60 percent of customers said they would no longer accept poor-quality delivery when ordering take-out or home food.

Moreover, when service problems occur, people still prefer to use the phone to convey complaints. However, customer preference for mobile chat and text messaging increased from 20% in 2021 to 27% in 2023.

Reducing costs with new delivery models and technology

Due to the exponential growth of costs due to inflation and in favor of service scalability, many restaurants have opted to inaugurate ghost kitchen (a lab that works for multiple brands dedicated to delivery), dark kitchen (kitchens specializing only in home delivery), social kitchen (where to organize events with cooking as a common thread) and shared commercial kitchen (shared commercial kitchen spaces that thus optimize operating costs).

As a function of this evolution, we expect to see an increase in technology providers offering technology solutions to help with business processes essential to smooth operations, especially with multiple virtual brands in the same store.

The real potential is in digitalization

The main factors encouraging the growth of delivery are the widespread adoption of smartphones and the growth of digitization even in developing countries. On the other hand, however, the biggest challenges are logistics or regulatory compliance issues, especially in relation to riders, which pose limits to this sector’s double-digit development.

IN 2024, THE DELIVERY REACHED OVER

2,6MILIONI

OF USERS IN THE WORLD

How can restaurants offer quality delivery?

1. Strengthen technology infrastructure: invest in quality technology and software for effective order management, kitchen and delivery logistics, ensuring fast and efficient operations;

2. Improve marketing support: focus on marketing, branding, and messaging to engage and retain customers, avoiding leakage or divestment to third parties;

3. Multichannel strategies: leveraging relationships with product, technology, and delivery service providers for better terms, increasing brand visibility, and aiming for a strategy that enhances one’s presence on as many channels as possible;

4. Data analysis: use analytical tools to obtain detailed information on consumer preferences, peak times, and other crucial data to optimize menus, delivery, and takeout strategies.

In this photo we see a screenshot of Deliverart, for advanced statistics management and data analysis on delivery and takeaway

Statistiche delivery Deliverart analisi dati

What trends will drive the food delivery industry in 2024 in Europe?

Major stakeholders such as Doordash, Deliveroo, Uber Eats, Zomato, and Swiggy dominate the international market, while in Europe, Just Eat Takeaway, Deliveroo, Uber Eats, Domino’s Pizza, and HelloFresh stand out.

In its latest quarterly announcement for 2023, DoorDash revealed a turnover of $17.6 billion, with year-on-year growth of 22.1 percent, just below Zomato, whose year-on-year growth over the same period was 26.7 percent.

Uber Eats grew by 16.1 percent and Deliveroo by 3.5 percent. Delivery Hero fell -3.4 percent, and JustEat Takeaway fell -5.0 percent, still an improvement from the previous quarter’s decline of -6.5 percent.

(Source: Company results, The DeliveryWorld)

Trend Food Delivery 2024

2024 trend of the food delivery market

There are many upward trends, just as many downward trends (e.g., quick delivery), but according to analysts, the main trends to be monitored in 2024 will be as follows:

  1. Seeking all-in-one delivery services and customer adoption of more convenient lifestyles (Mc Kinsey)

  2. Increase in planned orders (+14% in 2023, compared to 2022), especially in the grocery sector (home shopping)

  3. Rise of the delivery model of ready-to-heat meals or meal kits (meal kits)

  4. Increased use of restaurant software and apps (Pitchbook)

What scenarios are expected in 2024 in the food tech/delivery market?

A Digital Food Lab report released in April 2024 points out that this year, after a stabilization phase in the market, three scenarios could be encountered:

  1. Investment growth: after a major decrease in investment in delivery between 2021 and 2023, we could see growth in investment in the sector, focused on the need for upgrading the technology infrastructure (e.g., AI)
  2. M&A: many food delivery companies may be experiencing a stabilization phase instead, where large corporations will buy smaller companies in order for them to scale up
  3. Development-oriented degrowth: multinational delivery companies could divert their investments to the internal development of new innovative solutions

(Source: STATE OF THE EUROPEAN FOODTECH ECOSYSTEM- Digital Food Lab)

4 stadi dell'evoluzione del foodtech in Europa

The market for delivery management software

In 2023 and 2024, key trends that have driven and will drive the delivery management software market include:

  • The rise of cloud-based solutions,
  • The adoption of artificial intelligence (AI) and machine learning (ML) for automation and efficiency,
  • a focus on optimizing the customer experience through real-time tracking and personalized communication,
  • There is a need to comply with regulations governing delivery operations.

3.7MLD$

ESTIMATED VALUE IN 2028

DELIVERY MANAGEMENT SOFTWARE MARKET (Verified Market Research®)

Food delivery: sustainability goal

The home delivery industry has sustainability as its now imperative goal.

Delivery operations contribute to carbon emissions, waste generation and energy consumption. Transitioning to sustainable practices can help reduce the industry’s environmental footprint and mitigate the effects of climate change.

But what are the main effects of delivery on the environment?

  1. Greenhouse Gas Emissions.: The food delivery sector contributes significantly to greenhouse gas emissions, with vehicles used for deliveries responsible for 3 percent of global emissions. This environmental impact is set to grow, with projections showing an increase of up to 17 percent by 2050 if corrective measures are not taken;
  2. Use of single-use packaging: Excessive use of single-use packaging in food delivery generates plastic waste, contributing to the waste crisis and environmental pollution. Suffice it to say that each year, the European population produces 25 million tons of plastic waste, but less than 30 percent is collected for recycling (source: Istituto Superiore di Sanità);
  3. Energy consumption: Food delivery activities require significant energy consumption, both to operate the vehicles used for deliveries and to maintain the infrastructure involved in the process. Every year in the world, about a third of the mass intended for human consumption is lost in the food chain, and in caloric terms, up to a quarter of the total (source: ISPRA, 2017). Unfortunately, the inefficient use of energy contributes to the aggravation of climate change and the depletion of natural resources.
Le 3 sfide del 2024 per il delivery

The problem of single-use plastics in delivery packaging

According to the OECD (Organization for Economic Cooperation and Development), plastic waste has doubled from 2000 to 2019, and 40 percent comes from packaging.

Initiatives are moving internationally to change the restaurant industry’s approach to single-use plastics.

Switching to biodegradable packaging instead of cheaper plastic is not an easy choice. The reusable packaging industry has been developing for several years with companies such as DeliverZero e Dispatch Goods offering solutions for circular systems of reusable containers.

Interesting is that Uber Eats’s experiment launched in late March 2024 with DeliverZero has extended experiments on container reusability to the West Coast of the United States. The trial allows customers to opt for reusable containers (currently out of 130 restaurants) at about $1.00 for reusable packaging.

Impact: Since the pilot began last year in New York City, the initiative has prevented more than 11,000 single-use containers from ending in landfills. DeliverZero estimates that it has saved about 1,810 kg of greenhouse gas emissions.

“We are at a critical point for our planet where we can no longer afford to extract materials, use them for five minutes, and then throw them away,” says Michael Oshman, CEO of the Green Restaurant Association in the United States. “The goal is a complete transition to reusable, at least in-house, but also for food delivery. […] We are at an early stage, but we have to overcome this hurdle.” (Source: Nrn.com)

Challenges and prospects of sustainable delivery

At present, one of the problems for the spread of reusable is the lack of standardization, which makes investments variable for restaurateurs. Another difficulty is definitely the higher cost of eco-friendly packaging.

But it is a matter of time, and as adoption increases, prices will come down, and practices will become standardized. Government support will be critical in facilitating this transition locally and globally.

What can technology do to make delivery more sustainable?

Technology can play a crucial role in making delivery more sustainable through several innovative solutions. Here are some actions that can be taken to promote sustainability in the delivery industry:

  1. Route optimization: use advanced algorithms to optimize delivery routes, reducing miles traveled and minimizing greenhouse gas emissions associated with deliveries(as, for example, Deliverart already does in 2019)
  2. Electric Vehicles: Promoting the adoption of electric vehicles for deliveries, reducing the environmental impact associated with the use of internal combustion vehicles and contributing to more sustainable transportation;
  3. Sustainable Packaging.: Encourage the use of biodegradable and recyclable packaging to reduce the production of plastic waste and promote more eco-friendly practices in the packaging of delivered products;
  4. Research and development: Investing in research and development to develop new technologies and innovative solutions that can reduce the environmental impact of delivery, improve operational efficiency, and promote sustainability in the delivery industry.

The Sustainable Development Goals of Delivery

SDG 8

REDUCE STRESS IN LABOR INTENSIVE OPERATIONS

SDG 9

ENHANCING TOOLS TO SUPPORT INNOVATION

SGD 11

MODIFY AND IMPROVE THE PER CAPITA IMPACT ON CITIES

SDG 12

REDUCE WASTE AND CONTRIBUTE TO THE ADOPTION OF SUSTAINABLE MODELS

SDG 13

OPTIMIZE ROUTES TO REDUCE KM AND CO2 EMISSIONS

SDG 17

PROMOTE COLLABORATION BETWEEN DELIVERY OPERATORS

The 3 challenges of 2024 for delivery

Artificial intelligence and personalization

Among the hottest trends are leveraging AI to predict customer preferences and develop personalized offers, implementing intelligent chatbots for more efficient and interactive customer service, and optimizing delivery routes with advanced algorithms.

Circular economy and sustainable packaging

The imperative is to reduce the use of plastic and non-recyclable materials in packaging, promote compostable or reusable packaging, and network to collaborate with companies that offer recycling and reuse solutions.

Not just food

Not only food delivery, but also personalized and interactive experiences. Deliveries of cocktail-making kits, gourmet dinners, or creative activities. Home delivery of services, drugs, repair service, and delivery to theaters, stadiums, and hotels. Let us stand by and monitor in what direction the industry will develop!

Deliverart Software Gestionale per il delivery

Deliverart is the solution to centralize delivery management

Deliverart is an ecosystem of food delivery services that simplifies the management of orders and home deliveries. Aggregate and consolidate all restaurant delivery orders from phone, website, apps and delivery platforms in a single interface, manage orders automatically and create multi-delivery routes optimized for riders.

Through automation, we give restaurant managers back the time they normally spend coordinating repetitive operations that steal mental energy, making them more efficient and optimizing a more sustainable and healthy restaurant model.

Would you like to know more? Contact us!