Despite it having the best company name we’ve heard in months, there are no actual trucks involved in ClusterTruck’s business.
Rather, the Indianapolis, IN-based delivery-only food service is making a name for itself because of the way it approaches the delivery business. ClusterTruck controls the entire process, from putting menus online to taking orders to getting the actual food to the customer’s door. They create the recipes, write the software that powers their operation, and pay their own set of gig-based drivers. Founder and CEO Chris Baggot believes this vertically integrated approach to food delivery is the most sustainable way to do business over the long term.
To use the service, customers go online and choose from the rather extensive menus ClusterTruck offers. You can order as many different types of food as you like, so long as they’re on the menu. So, for example, Sally across the office might want a cheeseburger, and Dan prefers a salad. You, on the other hand, want cold noodles. All those meals can be rolled up into a single order on ClusterTruck, and paid for together (the company doesn’t accept cash payments).
Behind the scenes, the company’s in-house software system is calling the shots. When an order comes in, kitchen workers wait to start cooking it until the system tells them exactly where the driver is. If food takes five minutes to cook, the time to start the order is when a driver is five minutes away. Because the software allows for more precise timing, the drivers don’t even have to get out of the car; food is ready as soon as they arrive.
And despite doing it all themselves, ClusterTruck service, from order to delivery, is about 20 minutes faster than the industry average.
Baggot, a prominent Indianapolis entrepreneur, founded ClusterTruck in 2015, but he’s a software guy through and through. Prior to ClusterTruck, he founded the companies Exact Target and Compendium, then sold them to Salesforce and Oracle, respectively. He also started Tyner Pond Farm, which raises livestock and sells it locally via an e-commerce site.
Baggot became interested in food delivery when he realized the current model, driven largely by third-party services such as Grubhub and Uber Eats, is actually quite ineffective for delivering food. “You have this system made up of three constituents: drivers, customers, restaurant,” he says. “And nobody is happy. At the same time, people are putting up with this because there’s no better alternative.”
According to Baggot, the major problem the industry faces right now is that restaurants and delivery services alike treat food delivery as incremental business. As such, it gets treated as an add-on, which only creates extra friction and complications for the restaurant. The software used to integrate delivery isn’t the main software the restaurant uses; it’s extra. Or, a classic case in point, workers contend with Tablet Hell, where multiple devices from multiple delivery services wreck havoc on restaurant operations and hog physical space.
But, as is proclaimed ad nauseam at this point, delivery is only going to become more prevalent. ClusterTruck isn’t the only business thinking of it as the business rather than a small part of business, but the company certainly has an aggressive approach.
As Baggot sees it, “everyone is sort of treating [delivery] like Sears as opposed to Amazon.” By that he means that Sears —an “everything you need” store — should have been one of the winners in the early days of internet commerce. But the department store instead treated the internet as incremental, a side dish to the main brick-and-mortar business. It was Amazon who proved internet shopping wasn’t just incremental revenue; it was the entire business model. And we all know the ending to that story.
However, Baggot doesn’t want his company to be the Amazon of delivery. His original inspiration came from Google’s cafeterias, whose assortment of food on offer is practically legendary. “A lot of that has to do with shared ingredients,” he says. The food in Google’s cafeteria, despite being quite varied, gets made in one kitchen, with one set of shared ingredients. ClusterTruck employs the same tactic, rather than splitting the different types of foods into different operations, as is common with ghost kitchens. Baggot believes the single-line approach to the kitchen is more efficient for the workers and makes better use of ingredients.
Delivery-only kitchens are certainly getting more popular. Just look at Kitchen United, who netted $10 million last year and Swiggy, a delivery-only business operating in India. As yet, though, no one else has pulled the entire delivery operation fully in-house, and this is something Baggot believes will be a major differentiator for ClusterTruck in the long term.
ClusterTruck operates right now in Indianapolis, Columbus, OH, Kansas City, and Denver. The company also has a couple more kitchens built but not yet open, in Cleveland and Minneapolis. The Minneapolis location is actually in a parking garage, which Baggot believes will make the operation even more efficient.
While the company isn’t targeting major places like San Francisco or NYC at the moment, it does plan on further expansion in future. “Anywhere that third party exists, we’ll be there,” says Baggot. “And we will win.”