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Daily news and analysis about the food tech revolution

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Report: 56% of Consumers Want to Know How Restaurants Use Their Data

Over half of restaurant customers want to know more about how restaurants use their personal information, according to Technomic’s recently released Technology Consumer Trends Report. The report, which is part of Technomic’s ongoing research into how technology is impacting the foodservice industry, looks at U.S. consumers’ preferences and demands in this area. 

Restaurant these days are testing out all manner of technological tools, from self-service kiosks to digital menu boards at the drive through to AI-powered mobile apps that increasingly rely on customers’ past orders and dietary preferences to offer the most relevant recommendations. All these tools require at least some level of customer data, as do delivery apps from the likes of DoorDash or Grubhub. 

Customers’ control over their own data is a key theme in Technomic’s report, which notes that “control over personal data is becoming the expectation.” Over half of consumers, 56 percent, want to know more about how restaurants use their personal information. Currently, less than half (37 percent) say they trust food service brands not to misuse their personal data. 

At the same time, restaurant customers seem more willing to part with personal data if it means getting an easier, faster, more personalized experience with a restaurant. As one survey respondent noted, “The benefits of using technology to order/pay for food and beverages from restaurants outweigh the risks to my personal data.”

We see this adoption in the success brands like Chipotle and McDonald’s, who wouldn’t have billion-dollar-plus digital businesses if customers weren’t willing to hand over at least some of their data. And it’s not just your past orders and address restaurants are after, either. Some, notably Sevenrooms, envision a day when any restaurant will be able to know things like a customer’s dietary restrictions, birthday, and favorite dessert, thanks to data. Others, like 5Thru, are using license plate scanning technology to collect data and make the drive-thru experience faster and more personalized for customers. Then there are ghost kitchens, which more or less run on customer data, as all orders are placed digitally.

As consumers get more comfortable parting with their personal data to navigate the drive-thru line faster or speed up food delivery times, the next big challenge for the restaurant industry will be establishing trust with these customers. As Technomic’s report noted, “. . . brands must meet consumer expectations for privacy and control over their personal data, especially as more brands leverage technology to obtain customer data to personalize the experience.”

Right now just over half of those surveyed for Technomic’s report said they want to know what restaurants do with their data. We can expect that figure to jump over the next several months as demand for off-premises experiences increases and the number of customers ordering digitally goes up. That makes establishing trust a major priority for the rest of 2020.

Speaking of data-driven individualization, we’ve got a whole event devoted to personalized food: Customize! Use code SPOON15 to get 15% off tickets and join us in NYC.

 

Survey: Two-thirds of Restaurant Operators Are Banking on More Automation for the Future

Roughly 65 percent of restaurant franchisees believe increased automation and a more widespread use of mobile apps for ordering will greatly impact the restaurant industry in the future, according to TD Bank’s recent Restaurant Franchise Finance Group survey data emailed to The Spoon.

The survey polled a select group of restaurant owners, operators, and executives from multi-unit restaurant companies, both independent and franchised, at the 2019 Restaurant Finance & Development Conference that took place in Las Vegas this past November. 

Among the survey’s findings, nearly two-thirds of respondents believe more automation and mobile loyalty apps will “alter the restaurant landscape.” The survey specifically mentions self-service kiosks and mobile apps as technologies driving this change. In a statement, Mark Wasilefsky, Head of the Restaurant Franchise Finance Group at TD Bank, deemed technologies like self-order kiosks “necessary to compete” for restaurants.

One doesn’t have to look far to see such technologies already been widely implemented in restaurants, particularly QSRs and fast-casual chains. Shake Shack, Dunkin’, Sweetgreen, and many others already include kiosks as an option for customers when ordering. Many more in addition to those chains offer loyalty programs through their own mobile apps.

Wasilefsky noted that “Industry leaders expect these technologies to grow in popularity, driving a ‘trickle-down’ effect, where smaller local and regional chains consider adopting these offerings to meet diners’ preferences.”

Mobile apps are, of course, a key part of any delivery strategy these days — and there are plenty of delivery strategies now. In TD’s survey, 85 percent of respondents said they had a delivery strategy, up 10 percent from 2019. Fifty-two percent said delivery comprises “up to” 10 percent of their overall sales, while 20 percent said delivery accounts for more than 20 percent of their sales.

That number will keep rising, thanks in no small part to third-party providers like Uber Eats and DoorDash, who by some accounts will make up 70 percent of restaurant deliveries by 2022. Wasilefsky noted that the cost of delivery is decreasing as “third-party providers become more efficient and larger operators are able to negotiate more favorable deals, there is tremendous potential for operators to use delivery to account for a larger percentage of their businesses,” Wasilefsky said.

Not talked about in the survey, however, is third-party delivery services’ impact on smaller restaurants and the growing litany of controversies and complaints the businesses have with these services. Multi-unit restaurants like the ones polled for TD’s survey tend to have more leverage (aka money) when it comes to negotiating contracts with the DoorDashes and Grubhub’s of the world. As for the rest of the industry, including the mom-and-pop shops with shallower pockets and less negotiating power, the impact of automation and mobile ordering seems a little more up for question at the moment.

Week in Restaurants: Ghost Kitchens Might Be Hurting Small Businesses

Food delivery has a dark side. That we knew, but it does seem to be getting more airtime lately, with legislators and restaurants alike pushing back against some (okay, most) of the practices companies like DoorDash, Grubhub, and Uber Eats employ. We saw more of that this week when a San Francisco restaurant owner took Grubhub to task and urged others to join her. Judging from Grubhub’s latest earnings call, though, the service isn’t budging on certain practices.

Read on for more on those as well as other noteworthy restaurant news from around the web this week.

Ghost Kitchens Get an Oversight Hearing in NYC

Ghost kitchens are all the rage, but not everyone is thrilled with them. On Thursday, New York City council members held an oversight hearing to discuss whether ghost kitchens are a friend or hindrance to local business, and if they need to be regulated. “Are you a threat to our mom-and-pop restaurants, or should you be embraced as a partner that’s going to help them continue to flourish and grow?” councilmember Mark Gjonaj asked ghost kitchen operators at the hearing. (Gjonaj has also been vocal when it comes to third-party delivery in NYC.)

Kitchen United CEO Jim Collins was present, as was Zuul Kitchens cofounder Corey Mancione. While regulatory measures were not discussed, the event definitely puts a spotlight on the more controversial aspects of ghost kitchens. The main debate at last night’s hearing was whether ghost kitchens hurt small, independent restaurants by lessening overhead costs for bigger chains, who have the deep pockets to more easily embrace off-premises ordering.

Image via Unsplash.

TripAdvisor Unveils a Review Aggregator for Restaurant Operators

TripAdvisor launched a new tool on Wednesday that aggregates restaurant reviews from multiple websites so that owners and operators can view all of them from a single dashboard. Dubbed Review Hub, the subscription-based feature gathers reviews from Facebook, Google, Yelp, and “other major review sites” into one place. The aggregated view promises restaurant owners an easier, faster way to spot trends in feedback, see what’s working and what isn’t, and respond to customers more consistently. Subscriptions are available on both a monthly and annual basis.

Planet Hollywood Founder Launches a Virtual Restaurant Network

Robert Earl, known as the founder of Planet Hollywood, has launched a virtual restaurant concept called Wing Squad, which is available exclusively through third-party delivery platforms Grubhub, Uber Eats, DoorDash, and Postmates. The online menu is fairly streamlined, offering up just wings, sides, and a few desert options, all of which is cooked in ghost kitchens. The restaurant is currently available in 16 cities, including Los Angeles, San Diego, Detroit, and Las Vegas. Earl, whose Earl Enterprises owns chains like Buca di Beppo and Earl of Sandwich, said in a statement that Wing Squad is part of his Virtual Dining Concepts network. Other online-only restaurants are coming soon.

Grubhub Added 150,000 Non-Partnered Restaurants

Grubhub beat Wall Street estimates for Q4 2019 in what was a drastic change from the company’s dismal third-quarter results. Part of the third-party delivery service’s efforts in Q4 included doubling its restaurant inventory by adding 150,000 non-partnered restaurants — that is, restaurants that do not have contracts with the service and have not given permission to Grubhub to use their menus online. The controversial tactic is also used by Postmates and DoorDash. While Grubhub defends the strategy, saying it is meant to reverse the slowdown in daily orders, more and more restaurant owners are speaking out against the practice, turning the issue into the latest battle between restaurants and delivery services. Mark Gjonaj, over to you.  


Will the Restaurants Themselves Be Third-Party Delivery’s Biggest Opponent?

A while back, I wrote that third-party delivery services like DoorDash and Grubhub are engulfed in a massive fight now against all manner of opponents, from government regulators to investors worried about profitability to the force that is social media. But in the wake of fresh controversy, these delivery companies’ strongest opponents might actually be the restaurants themselves. 

Restaurants’ need to push back against delivery services was (once again) brought to light recently when San Francisco restaurant owner Pim Techamuanvivit, who owns Michelin-star restaurant Kin Khao, left the following tweet:

Techamuanvivit went on to explain how she discovered that Kin Khao was listed on Grubhub and its subsidiary brand, Seamless, despite the fact that the restaurant has never offered delivery or even takeout. After all, it is a Michelin-star joint.

An excellent article from Wired goes into the full details on how Kin Khao got mixed up with a virtual brand that operates out of one of Reef Technology’s ghost kitchens. (It was a technical error.) But the bigger point, as Wired underscores, is that Grubhub had listed Techamuanvivit’s restaurant in the first place, without her knowledge or consent, and that doing so is actually a common practice Grubhub started some months ago.

Essentially, Grubhub identifies non-partnered restaurants — that is, restaurants with which it doesn’t have a contract — that are popular in a city, creates a page using the establishment’s menu and basic information (pulled from public sources), and has orders sent directly to Grubhub. Grubhub then figures out how to actually get the order, which usually involves sending a driver to retrieve a pickup order. However, in the case of a high-end restaurant like Kin Khao, which only offers dine-in service, that tactic clearly doesn’t work.

Many restaurants have voiced concerns over this practice. Steven Sorensen, general manager and partner at The Farmhouse at Jessup Farm in Colorado, had a similar experience to Techamuanvivit’s, even though his restaurant had “routinely” declined to partner with Grubhub. “Our food is not designed for that app,” he told the Coloradoan. “It’s designed to be enjoyed immediately in the restaurant.” 

Another restaurant owner, this one from Ohio and going by the handle @ThaibyTY, tweeted that Grubhub had listed incorrect information about their business and incorrect menu items and prices:

Other services like Postmates and DoorDash follow a similar practice. The argument is that listing non-partnered restaurants widens third-party services base of restaurants and and is a way to drive more delivery orders to local restaurants.

But this practice of listing restaurants without their consent is just one of many griefs with delivery businesses are getting louder about.

Grubhub has for some time now also been dealing with a controversy around charging restaurants “bogus” phone order fees. The service announced a new phone-order system in January (which NYC regulators immediately labeled “insufficient”), but according to the NY Post, the service has yet to refund the majority of its restaurant partners on those erroneous fees.

That service, along with Uber Eats, was the center of an oversight hearing in Manhattan last year that called into question the commission fees delivery services extract from restaurants, usually 20 to 30 percent of each transaction. Caps have also been proposed for these commission fees.

DoorDash isn’t off the hook, either, given the controversy last year around how the service tips its workers, a point that’s the center of a lawsuit filed by DC Attorney General Karl Racine.

I wrote back in December that, for at least the first half of 2020, we should expect the already messy food delivery space to get even messier “get messier, raise more questions, and incite more regulatory battles as it progresses towards normalization.”

But maybe it shouldn’t normalize, at least not in its current form. Maybe this latest controversy should instead encourage more restaurants to vocalize their concerns around the unregulated, unsustainable beast third-party delivery is becoming, and in some cases, take further action in order to become a legitimate threat. Techamuanvivit, for her part, is promising legal action against Grubhub and has encouraged other restaurants to do the same.

Litigation is tricky, though. In-N-Out Burger famously tried to sue DoorDash in 2015 but the case was dismissed two months later in a confidential settlement. What the industry needs to see are examples of such lawsuits going to trial and their outcomes forcing changes in how business gets done between restaurants and third-party services. There are no guarantees that will happen.

There are arguments out there that if restaurants don’t like the way these third-party services operate, they shouldn’t use them. That angle might have held water two years ago. Now, off-premises orders are expected to drive most restaurant sales over the next decade, which means delivery is practically mandatory for many restaurant types. Unless you’re a restaurant like Kin Khao, where delivery doesn’t make sense for your brand, most restaurants have to contend with marketing costs, paying drivers, and managing the technical logistics of on-demand ordering. Often the cheapest way to do that is to use third-party services, which may handle the heavy lifting of delivery operations for the restaurants but which are also largely unregulated and as of now face little accountability for their business practices.

Whether Techamuanvivit’s Twitter takedown of Grubhub and possible forthcoming lawsuit can inspire others in more precarious positions (those restaurants who feel they need the partnerships with third-party services), remains a question.

Meanwhile, talk of consolidation among third parties continues, and worry from investors over profitably continues to threaten the model. Coupled with growing concern and louder voices from the restaurants themselves, it seems more likely that something big is going to give very soon. And it should. Otherwise, everyone loses in the long term.

Troubled Food Delivery Service Waitr Shifts Drivers From Hourly to Contract Workers

Food delivery service Waitr said this week it is shifting its model so that drivers are classified as contract workers rather than hourly ones, according to KATC.

Under the new policy, Waitr drivers will get paid per delivery rather than by the hour. Companies paying contract workers aren’t legally required to offer benefits or withhold taxes, something Waitr must do under its current employee model.

For a long time, the service stood by its policy of paying drivers hourly and categorizing them as W-2 employees. Waitr founder and former CEO Chris Meaux was positive about the model when he spoke to The Spoon last year: “Efficient employees are much less expensive,” he said, adding that, “If you manage the driver flee right and you schedule the drivers when you need them, [you] can do it with a fraction of the drivers that [competitors] require.”

That tactic doesn’t appear to be paying off, however. KATC obtained an email Waitr sent to drivers that frames the change, which will take place in April, as a positive one, though it’s hard to buy that pitch looking back through Waitr’s activity over the last several months. 

The service, which went public in 2018, outraged customers and restaurant partners alike last year when it introduced a new “performance-based” fee structure for restaurants. Protests ensued. 

The company has also done three rounds of layoffs since June 2019, with the most recent one being last week. The company was for a time in danger of being delisted from the Nasdaq, and one report from October stated the company only has enough cash to run through March of 2020.

Waitr has seen its fair share of role changes, too. Meaux stepped down as CEO in August of 2019. He was replaced by Adam Price, who resigned at the end of December and was replaced by Carl Grimstad. Waitr’s CFO, Jeff Yurecko, also resigned, as have two board members.

Considering that glut of bad news, reclassifying its workers as contract rather than hourly seems less the positive change Waitr is trying to spin and more a desperate scramble to cut costs and try to save the struggling company. It’s doubtful that will be enough to save the company.

The switch also comes at a time when talk of how gig economy workers get classified is loud. California’s Assembly Bill 5, which reclassifies gig workers as employees rather than contract workers, was signed into law last year, though it’s getting significantly pushback from delivery companies. 

Ice Cream by Air! Unilever Tests Ben and Jerry’s Drone Delivery

In the future, when I have an ice cream craving, I won’t need to put on pants to walk across the street for a pint — I’ll just open the window and a drone will be waiting for me with some frozen treats.

This scenario is likely years away, but Unilever took a step toward that vision with a successful drone delivery test of Ben and Jerry’s, according to a press release issued this week. The company, partnering with Terra Drone Europe, demoed the drone delivery of three Ben & Jerry’s mini cups to a predetermined destination inside Unilever’s U.S. headquarters during its annual investor event.

The demo was part of Unilever’s Ice Cream Now service, which launched in 2017. The program uses apps such as UberEats to deliver sweet treats to customers using gas station and convenience store freezers as distribution points. There are at least 900 pickup points across the U.S., The Tampa Bay Times reports. The location and timeline of any commercial ice cream drone delivery roll out has not been determined yet, a spokesperson for Terra Drone told The Spoon.

“With regulations around future drone flights expected to become more flexible, the consumer goods company is preparing for a drone logistics service that will deliver products to more customers faster,” according to the press release.

The race is on to develop delivery drones. Uber unveiled its delivery drone last year and plans to test it this summer in San Diego. Amazon has been at work at its own drone program and patented tech that would charge drones in mid-air. Israeli tech company Flytrix has conducted drone deliveries in Reykjavik, Iceland, as well as a North Dakota golf course.

The big hurdle for drones isn’t so much the technology, but regulation, and if that’s ever cleared, a pint of non-dairy Chocolate Chip Cookie Dough will be flying my way.

Chipotlanes, New Store Formats, and Personalization Are Driving Chipotle’s $1B Digital Business

Chipotle outlined big plans for its digital business, which surpassed $1 billion in sales in 2019, according to the company’s Q4 earnings call this week. 

The fast-casual chain saw digital sales in Q4 alone jump 78 percent to $282 million, and Company CEO Brian Niccol said on the call that digital orders made up one-fifth of Chipotle’s sales during the same quarter. He also recapped the company’s efforts around delivery, off-premises ordering, and other digital-focused initiatives, including the one everyone seems to be really excited about — the Chipotlane.

These are drive-thru lanes dedicated to customers ordering ahead via the Chipotle mobile app. Like digital drive-thru efforts from other chains, Chipotlanes are meant to speed up service for this particular order channel, which has seen wait times get progressively longer over the last several years. The tactic is clearly working: Niccol said on the call that Chipotle will more than double the number of Chipotlanes in 2020 “because our guests love the convenience and it strengthens our economic model by making our highest margin channel more accessible.”

The other big area of focus Niccol and Chipotle outlined on the call was the new store design, which the company unveiled in December and is trialing in a few different U.S. cities. This new design is Chipotle’s take on the express store format, which many QSRs and fast-casual chains are pursuing these days to cater more to the ongoing demand for delivery and takeout orders. These restaurants have fewer seats, and, in the case of Chipotle, digital pickup shelves where customers can simply grab their order and go. The company is currently monitoring the performance of the new store design’s initial locations.

Niccol hinted at personalization on the call when talking about the company’s loyalty program, which it has grown to 8.5 million members over the last few years. While he didn’t dive into much detail, saying only that “personalization and engagement are cornerstones of our evolving loyalty strategy.” But we’ve already seen what more personalization can look like in the restaurant world, from McDonald’s installing Dynamic Yield’s AI tech in drive-thru lanes last year to Taco Bell’s recent push to make recommendations via its app more personalized to each customer. 

Niccol said he expects it “to become a bigger driver in the future as we gain more experience gathering customer insight, while continuing to expand our digital ecosystem.”

Kitopi Raises $60M to Expand Its Ghost Kitchen Network

Ghost Kitchen startup Kitopi has raised $60 million in new funding, according to an article this week from The Financial Times. The round was led by Lumia Capital and Knollwood. Kitopi declined to provide numbers around its current valuation.

The Dubai-based company operates more than 30 ghost kitchens in cities around the world, including its hometown, Abu Dhabi, New York, and London, among others. 

Like other ghost kitchen facilities, Kitopi offers infrastructure for restaurants wanting to fulfill more off-premises orders and also expand into new geographic areas where they might not have a brick-and-mortar location. Kitopi specifically caters to those companies preparing meals for third-party delivery apps like DoorDash and Deliveroo. The company rents both space and staff to restaurants, who provide Kitopi with recipes and menus with which to fulfill the orders. Kitopi works directly with the food delivery services to fulfill the last mile and actually transport the food to customers. 

The company has also developed an in-house tech stack it calls “a smart kitchen operating system” that “optimizes all aspects of kitchen operations in real time.”

According to FT, Kitopi will use the new funding to open a second headquarters in NYC, where thanks to soaring rents and shrinking margins, restaurants are scrambling to stay afloat and meet the demand for off-premises. Kitopi already operates some ghost kitchens in that city; adding more will give it more muscle when it comes to competing with the likes of Zuul, which recently opened the first of many planned NYC kitchens, and Kitchen United, which is expanding east and has a location planned for Brooklyn. 

Kitopi plans to open 50 new kitchens in the Big Apple this year in addition to 100 additional locations worldwide.

The Food Tech Show: Are We Ready to Eat Bugs?

The Spoon team got together talk about the most interesting food and kitchen tech stories of the week, including:

As always, you can listen to the Food Tech Show on Apple Podcasts, Spotify, download direct to your device or just click play below.

Audio Player

British Authorities Open Investigation Into Just Eat-Takeaway.com Merger

Fresh off the heels of a bidding war for the acquisition of UK-based delivery service Just Eat, Takeaway.com, who also offers on-demand restaurant food delivery, faces a new opponent: British regulators.

The Competition and Markets Authority (CMA) said late last week that it is investigating the proposed Takeaway.com-Just Eat Merger to see whether the deal, worth £6 billion (~$8 million USD), would “result in a substantial lessening of competition” in the UK food delivery market, according to The Associated Press.

Specifically, the CMA is looking into whether Takeaway.com would have re-entered the UK market, which the service left in 2016, without the Just Eat deal.

This isn’t the first time the CMA has brought the hammer down on a major deal between two food delivery companies. In May of 2019, Amazon announced a major investment in Deliveroo, only to have it flagged by the Authority, who said it “presented reasonable grounds” that such a deal would make the two companies “cease to be distinct” from one another. In other words, the deal would undercut competition from other food delivery services in the UK, including Just Eat.

The Amazon-Deliveroo investigation is still ongoing, and at last check the deal was said to be in serious jeopardy.

For Takeaway.com and Just Eat, the situation seems a little less dire, at least for now. Takeaway.com said the deal would still go through but be delayed by one week. Takeaway.com said it was confident that clearance on the merger “will be obtained.”

Takeaway.com first announced its intentions to acquire Just Eat in July 2019 in an all-share deal that would create a new company, Just Eat-Takeaway.com. The company then found itself in the middle of a bidding war with Naspers-backed tech investment firm Prosus, who over the last several months has offered multiple counter bids for Just Eat.

While that bidding war was put to bed recently, it, along with this latest investigation from the CMA, underscores how fiercely competitive the food delivery market is getting, and just how thick in the middle of a consolidation process it is. With demand for off-premises orders set to drive restaurant sales for the next decade and investors applying pressure for these companies to show the third-party delivery model can be profitable, companies across the space are shutting down services, selling their operations, and, at least in the case of the big guys, gobbling up the smaller players. 

For its part, Takeaway.com said it was confident that clearance on the merger “will be obtained.” Now we’ll have to wait and see if that really does mean a simple one-week delay or if the two companies have a longer, more complicated battle on the horizon.

Ready Meal Delivery From Grocery Stores Could Be a Really Big Deal

It’s not uncommon in the Albrecht house to, at four o’clock in the afternoon, realize that we don’t have anything really for dinner. More often than not, the solution is to swing by the grocery store and pick up a broiler chicken from the hot bar. And while we’re at it, maybe a salad and sides too.

It’s a lot cheaper than getting a restaurant meal, and we can bundle it in with any other groceries we need to get. Plus, while we have done nothing other than pay, having a roast chicken kinda provides the illusion that the family is eating a home cooked meal.

Instacart announced this week that it was rolling out delivery of made-to-order foods, and this move could be a very big deal. And not just for the Albrechts.

The Instacart press announcement mentioned the deli counter of a grocery store in particular, but it’s not hard to imagine all of the hot bar and salad bar areas of a retailer jumping on board. Rotisserie chickens, flatbread pizzas, orzo salads all of it available for delivery to customers.

Supermarkets are already focusing more on prepared foods. A Progressive Grocer Retail Deli Review survey last year found:

The vast majority of survey respondents said that their prepared food programs are increasing both in dollar (78 percent) and unit (80 percent) sales. Additionally, nearly 70 percent of respondents said that they’re either “significantly” or “modestly” increasing the space devoted to prepared foods.

While online grocery shopping is still a small percentage of overall grocery sales, adding the ability to get hot, prepared grocery food delivered to your door is a good way for a retailer to get a halo of additional sales online. Much like when I pick up a roast chicken, I also get milk and probably a dessert of some kind, it’s likely that when ordering a hot, prepared meal I’d throw a few more things into the basket.

In particular, Amazon and Walmart could get a nice jolt from selling more prepared foods for delivery. A quick perusal of Amazon/Whole Foods and Walmart websites shows that they currently offer some prepared foods for delivery, but there is a lot of room to add more. Given the lightning fast logistics of both companies (Amazon Prime members get two hour delivery, Walmart offers Delivery Unlimited), it’s not hard to envision just in time delivery of a hot dinner to your door.

Additionally, think about all the new types of data that could be gleaned selling prepared meals for delivery would translate into. In addition to a customer’s CPG buying habits, the company would get much more insight at what people eat and they actually eat it.

For its part, Instacart can provide the delivery and logistics to its retail partners, but then retailers are turning over that customer relationship to a third-party delivery service. If made-to-go meal delivery takes off, it could wind up biting Instacart in the basket and retailers bring that customer relationship back in-house.

This could also set up another front in the third-party delivery wars. Postmates, Door Dash and Uber Eats have dabbled in grocery, leaving it mostly to Instacart. But when the groceries you’re delivering are actual hot meals for dinner, you could see Door Dash and Uber Eats get more aggressive about forming grocery relationships.

There are still plenty of ifs, surrounding the idea of delivery of made-to-go meals from grocery stores. But at least Instacart isn’t too chicken to try the idea out.

Instacart and Publix to Launch a ‘Digital Deli Counter’ for Made-to-Order Meals

Instacart announced today it is expanding its partnership with Publix to include a solution that will let the supermarket chain’s customers get made-to-order meals for delivery and pickup via the Instacart app.

Called Instacart Meals, the service will, in the words of Instacart, act as a “digital deli counter” where customers can choose items like sub sandwiches and other deli fare. Customers access Meals via the Instacart storefront and can add menu items, including “build-your-own” sandwich options, to their regular grocery cart. An Instacart shopper will pick up the deli items just as they would fulfill an order for groceries. 

This is Instacart’s first venture into made-to-order meal delivery — an apparently lucrative area for supermarkets these days. “Made-to-order food counters are among the fastest-growing aisles in the grocery store. These items represent up to 15% of sales for our grocery partners and have among the highest margins of anything sold in-store,” Instacart President Nilam Ganenthiran said in a statement. 

That popularity makes sense given the uptick in online order and delivery among the general population. And in many cases, it could be a cheaper option for consumers when it comes to ordering a quick bite. Delivery fees are expensive, and if a customer can simply order lunch on top of the evening’s groceries, they would theoretically wind up paying less in taxes as well as service and delivery fees. 

A pilot of the service will roll out in Orlando, Florida over the next few weeks before expanding to other Publix stores around the state. From there, Instacart Meals will make its way into all of the chain’s stores in the Southeastern U.S. “in the coming months.”