Another Food Delivery Twist

The Lempert Report
August 17, 2018

There are three problems facing food delivery: fragmentation, last-mile logistics and a lack of pricing transparency.

Techcrunch writes that services such as Amazon and Instacart are pushing for our business and attention and thus making it great for the end users. By comparison, food and ingredient delivery for businesses is vastly underserved. The business of foodservice distribution hasn’t gotten nearly as much attention — or capital — as consumer delivery, and the industry is further behind when it comes to serving customers. Food-preparation facilities often face a number of difficulties getting the ingredients to cook the food we all enjoy.

We are talking about restaurants, hotels, school and business cafeterias, catering companies, and many other facilities that supply to grocery markets, food trucks and others. U.S. restaurants alone earn about $800 billion in annual sales according to the National Restaurant Association, foodservice distribution in the U.S. is $280 billion.

Big business that doesn’t make the headlines, mostly because this channel goes thru food distributors. Not a likely to make headlines as these distributors are completely fragmented, and the quality of fresh ingredients varies meaningfully from one distributor to the next. Prices fluctuate constantly, typically on a weekly basis. What’s worse, Techcrunch says is delivery timeliness, or rather the lack thereof. These distributors each employs their own delivery staff and refrigerated trucks.  

What seems to be below the radar, and not getting any of the hi tech talent or VC money like Instacart and others are this important channel.

Why not create a platform that hosts a catalog of products from these distributors, with updatable availability, pricing and inventory. To be fair there are smaller start ups like Forager that are trying to do just that – but the sourcing is limited and not able to supply all the foods and beverages that are needed for foodservice.