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The Spoon

Daily news and analysis about the food tech revolution

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In-House Delivery Needs to Disrupt Delivery

Some of the talk at last week’s Smart Kitchen Summit revolved around two newish concepts that are especially compelling when it comes to thinking about restaurants: in-house delivery and disrupting third-party delivery. Together, the two could substantially shift the the off-premises meal journey of the future.

Technically, in-house delivery — also called “native delivery” or “direct delivery” — is a decades old practice championed by Domino’s, Jimmy John’s, and other restaurants that have always used their own staff to ferry orders to customers’ doorsteps. But ever since customer demand for delivery went through the roof and then some, most restaurants have found it more economically feasible to offload delivery operations to third-party services like DoorDash and Uber Eats. 

As we cover ad nauseam around here, third-party delivery comes with its own lengthy catalog of grievances, and many restaurants don’t actually make money from those orders. On top of that, they lose control of customer relationships and oftentimes their own branding. 

In-house delivery 2.0, then, is all about restaurants bringing some of that control back under their own rooftops. One SKS panelist mentioned fast-casual chain Panera as a pathbreaker in this area, as the chain still uses its own drivers for many of its orders and only offloads the technical logistics of processing an order to third parties. Bloomin’ Brands, parent company of Outback Steakhouse and Carrabba’s, also handles many of its delivery orders in-house, and Panda Express recently launched its own program that handles the entire delivery journey, from order processing to food transport.

Simultaneously happening is the rise of services like ShiftPixy, which use their technology to power custom-branded websites for restaurants that can process ordering and payments. ShiftPixy also works with restaurants to provide them with drivers, erasing third-party delivery from the process.

All of these approaches to in-house delivery were mentioned during SKS. In a discussion about the rise of ghost kitchens and virtual restaurants, one set of panelists agreed that in the future we will see a wider range of restaurants — major chains and independent mom-and-pop stores — gravitate to in-house delivery as a way of controlling their customer relationships and branding, to say nothing of dodging predatory commission fees from third-party services.

The mention of mom-and-pop shops is important to note. Right now, most can’t afford to build out their own mobile ordering and payments system and pay employees to deliver the food. That territory currently belongs to the Paneras and Panda Expresses of the world, which brings me to our second point: disrupting third-party delivery.

At SKS, more than one person I spoke to predicted that the act of unseating third-party delivery apps’ dominance over restaurants won’t come from imposing more rules and regulations, but from someone bringing a better, cheaper solution to the table. As more restaurant chains with deep pockets take back more of their delivery stack, those solutions might very well surface in the process. 

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Del Taco Is Launching a Drive-Thru-Only Concept

Following in the footsteps of KFC, Chipotle, Burger King, and other chains, Del Taco is doubling-down on the drive-thru as an important source of sales in the future. The Lake Forest, Calif.-based chain announced on its recent Q3 earnings call it will build a drive-thru-only prototype that can be placed at Del Taco locations with a smaller physical footprint. CEO John Cappasola said during the call this prototype will include “a modernized design, improved functionality, and other operational enhancements,” though he didn’t get more specific than that.

If this story sounds somewhat familiar, it’s because other chains have made similar announcements in the recent past. Most notable among them is Burger King, who several weeks ago announced its own drive-thru-centric design prototype meant to take up less physical space and serve more drive-thru orders in a shorter amount of time. 

Drive-thru has been the most important sales channel for QSRs during 2020’s lockdowns and continued uncertainty over the dining room. However, QSR Magazine’s recent 2020 Drive-Thru Study found that drive-thru times are nearly half a minute slower than they were last year, so it’s not a surprise more chains are redoubling their efforts to make the experience faster and more efficient. With winter fast approaching, outdoor dining is about to get way less appealing to consumers in many regions. Chains will need every order they can get from drive-thru, curbside, and other off-premises channels to make up for lost sales in the dining room/patio over the next several months.

Restaurant Tech ‘Round the Web

A wider slowdown could erase up to 2 million jobs restaurant and retail, according to new research from Gusto cited by Restaurant Dive. The losses could total roughly $190 billion.

Following openings this year of three off-premises stores in Chicago, P.F. Chang’s will expand its to-go-concept to 27 locations by 2021. The company is also testing an in-house delivery service at 10 of its locations in the U.S.

As we reported this week, Burger King is piloting reusable cups and sandwich containers in New York, Portland and Tokyo next year. The program is being done in partnership with TerraCycle’s Loop, which is also doing the McDonald’s reusable cup trial in the U.K.

Week in Restaurant Tech: Ordermark Expands Kiwi Deal, Blaze Takes on Big Pizza

McDonald’s grabbed the main spotlight this week for its acquisition of voice-order tech company Apprente, which it says could make your future drive-thru experience faster and simpler. But while Mickey D’s continued its evolution from burger chain to tech company, plenty of other new developments unfolded in the restaurant space this week past week.

If you want to learn more about the latest in restaurant technology, be sure to head to Seattle this October 7–8 for The Spoon’s Smart Kitchen Summit. Grab your tickets here and come on down.

Panasonic Unveils Kiosk-as-a-Service Solution
Panasonic, which has over 11,000 kiosks deployed at QSRs around the country, introduced a new hardware-software offering this week that promises a one-stop-shop solution for restaurants when it comes to integrating kiosks into daily operations. Dubbed ClearConnect, the platform rolls hardware, the company’s iQtouch software, installation, integration with existing restaurant systems, and after-sales service into a single system restaurants pay a monthly fee for. The new solution also includes a suite of drive-thru technologies. No voice-order capabilities yet, but it’s only a matter of time before we see such a feature make its way to the kiosk.

Ordermark Expands Kiwi Partnership
Ordermark, who helps restaurants organize and streamline restaurant orders, said this week it has expanded its partnership with Kiwi, whose six-wheeled bots enable autonomous delivery service on a few different college campuses right now. According to the press release, the deal gives Kiwi access to Ordermark’s portfolio of restaurant customers, which will expand as the former rolls its bots out to other locations, including Sacramento and Palo Alto.

Image via Blaze Pizza.

Blaze Wants to Take on Big Pizza With Delivery Strategy
LeBron James-backed pizza chain Blaze unveiled two new initiatives this week: larger pies and an integrated delivery partnership with DoorDash. Up to now, Blaze has been known for its 11-inch personal pies loaded with customizable toppings that don’t exactly travel well. The addition of larger, more shareable 14-inch pizzas makes Blaze’s offerings better candidates for delivery. As with a growing number of integrated delivery options, customers can place orders directly through the Blaze website or app and still get food delivered via a DoorDash driver. (Customers can also order Blaze via DoorDash or Postmates.) Blaze also says it’s taking on Big Pizza with this new delivery partnership — though it will be some time before an upstart pizza brand has the same reach as a behemoth like Domino’s.

Del Taco Debuts New Beyond Meat Burritos as Fast Food Embraces Plant-Based Meat

Today Del Taco announced two pieces of (meatless) meaty news. First, it revealed that the Beyond Meat Taco, which hit Del Taco menus nationwide in April, was one of its most successful product launches ever. Springboarding off this popularity, the fast-food chain also announced that it’s expanding its plant-based lineup with two new Beyond Meat burritos.

The Beyond 8 Layer Burrito ($4.49) and the Epic Beyond Cali Burrito ($6.49) will be available in more than 580 Del Taco locations nationwide. The two look pretty similar, except the Epic Beyond Cali Burrito subs in french fries (!) for beans and is therefore presumably better for curing hangovers.

It’s no wonder that Del Taco is introducing more products featuring the plant-based beef. In the weeks following April’s widespread launch of Beyond Tacos, Del Taco reported an increase in both check size and traffic. According to an email from Del Taco, so far the chain has sold a whopping 2 million Beyond Tacos.

Del Taco isn’t the only fast-food restaurant experiencing an uptick in sales after introducing new meatless products to their menus. Burger King decided to roll out the Impossible Whopper nationwide after only one month of testing, during which its pilot location in St. Louis saw an 18 percent increase in sales. White Castle reps also stated that sales of the Impossible Slider exceeded expectations and that the new product appealed to both new and existing customers.

Skeptics may question whether these sales bumps are just that — bumps. Once the novelty wears off, will consumers keep returning to certain restaurants just to get the Impossible Whopper or Epic Beyond Cali Burrito?

Seeing as the alternative meat market is rising at a CAGR of 6.8 percent with no sign of slowing, my bet is yes. However, as more and more fast-food restaurants embrace plant-based meat (except for you, Arby’s), chains will have to come up with new ways to differentiate themselves and lure in curious consumers.

We’ll see if the new Beyond Burritos can help Del Taco lure diners away from Mexican fast-food competitor Qdoba, who serves bowls and tacos made with Impossible “beef,” or Taco Bell, which has a vegetarian menu (though no plant-based meat).

Adding french fries into the mix can’t hurt.

Beyond Meat Dishes Up Plant-Based Options at Del Taco

Today Beyond Meat announced that it’s teaming up with Del Taco to “beef up” their menu.

The plant-based meat startup will launch two branded tacos: the Beyond Avocado Taco (which is vegan), and the Beyond Taco (which is just vegetarian). Judging from photos, they look like hard shell tacos with Beyond crumbles, lettuce, and tomatoes — the vegan option also has an avocado slice, while the vegetarian one has cheese. Customers can also sub Beyond Meat into any other Del Taco dishes (burritos, nachos, etc.). I wasn’t able to find any pricing information online, but as customers are allowed to swap in Beyond, I’m assuming that it’s on par with the meatier options.

This marks the plant-based meat company’s first partnership with a fast-food chain, and, according to Beyond Meat’s press release, it’s also the first time a Mexican fast-food restaurant will serve plant-based meat.

The announcement comes just a few weeks after Impossible Foods rolled out their vegan “bleeding” burgers to White Castles nationwide. It doesn’t take a genius to see that Beyond Meat, which typically markets itself directly to consumers in supermarket aisles, is now trying to establish itself as a strong player in the plant-based B2B market — for all price points.

While their products are already available in over 10,000 restaurants, their Del Taco launch is their first fast-food drive-through partnership in the U.S. (they’re already available in Canada’s A&W chain). We’ll see if the company can keep up with the high demand of quick service restaurants (QSRs), especially if they decide to offer Beyond Meat at all 564 Del Taco restaurants nationwide.

The Beyond Meat tacos will be available in two California Del Taco locations, one in Santa Monica and the other in Culver City. If you live in the area and are lucky enough to give them a taste, drop us a line and let us know about your experience!