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The Spoon

Daily news and analysis about the food tech revolution

Foodhini

The Year in Food Delivery

Despite a distinct cooling off of investment in the food delivery space this year, some big names like Uber, Google, and David Chang threw their hats in the ring.

That’s because the online food delivery market is estimated around $210 billion, with companies like FreshDirect raising $189 million in the past 12 months. It’s become such a pervasive part of our way of life that Google even added a food-delivery shortcut to Maps. And there are plenty of food-delivery crowdfunding projects to go around.

But enough with the numbers. Here are the highlights in this space over the past 12 months.

More Big Players Joined the Party

This year everyone wanted a piece of the pie. Google started to ship fresh food to customers in California through Google Express. Instacart and the Food Network launched a meal-kit delivery service, and Square acquired startup Maine Line Delivery in Philadelphia to boost Caviar. Meanwhile Facebook and Foursquare made it easier to order food from within their apps through Delivery.com.

NYC darling chef David Chang decided to blow up the entire idea of a nice restaurant by launching Ando, a restaurant that only does deliveries, and he raised the bar on delivery food everywhere by launching Maple, his own delivery service that promises a daily delicious menu.

Plus, where would the year be without a few gimmicks? Taco Bell and Whole Foods both came up with ChatBots that help you order food or suggest recipes, respectively, solely through the power of emojis. And Domino’s will now let you order pizza with one tap on your Apple Watch.

The Year of UberEats

So far I haven’t mentioned the biggest player, though: Uber. The company has had quite the year in food delivery. It shut down Instant Delivery in New York City, then launched UberEats in both the U.S. and London. Next UberEats drivers staged protests over the way the pay structure has been changed, and in November a courier filed a lawsuit against the company for missing food delivery tips. Yikes.

All of this commotion from big names and turmoil within UberEats suggest that the food delivery space is still young enough that no one has solved some of the primary problems within it. Companies are grabbing on to any stronghold they see (emojis! self-driving trucks! drones! more drones!), without regard to the longevity of the solution. Uber has faced the brunt of this fast-paced growth, but we expect to see more struggles in the coming years for other players as well.

Eat Local

This year the quest to eat healthily expanded even more into food delivery. Whole Foods hinted at a “meal solution spectrum” with some sort of delivery component in the future. Good Eggs, which many thought was defunct by this point, rose from the ashes with a $15 million round of funding to help it deliver local, quality food.

And Amazon, never one to be shown up, expanded its Amazon Fresh program to Boston, among other major cities. The difference here is that Boston customers can shop from local markets, a feature that we imagine will be implemented elsewhere if it’s successful in Beantown.

You Say Potato, I Say Share Economy

In such a young and moneyed space, different business models are flying around faster than those drones I mentioned earlier.

Some want to deliver fresh ingredients to customers to help simplify cooking at home. Juicero, for example, delivers prepackaged ingredients for green juice, made in its blender that doesn’t even require cleaning. Similarly, Raised Real wants to deliver ingredients for homemade baby food, thereby making it that much easier to make your baby’s food from scratch (sounds ambitious to me).

Speaking of raising babies and tapping new markets, Drizly raised $15 million for its liquor delivery service, among other parts of its ecommerce model. And DoorDash added alcohol to its food delivery options in California (what about the rest of us?!).

Meanwhile Foodhini calls itself a “for profit social enterprise” and delivers ethnic food made by immigrant chefs: Foodhini and the chefs each receive $2.50 from each meal, after costs.

And BringMe wants to out-Uber Uber by combining delivery with the share economy in Fairfax, VA, enlisting regular folks to deliver food as “bringers.” There are already a few models out there like this, such as Favor in Texas and Tennessee, and we expect to see more too.

Of course, while all of these business models are innovative and interesting, none of them beat the ultimate and original delivery food: pizza.

Food Delivery Startup Serves As A Platform For Social Change

Noobtsaa Philip Vang’s mother came to the U.S. from Laos after the Vietnam War. She worked multiple jobs to support their family and her economic struggles as an immigrant combined with her delicious home-cooked meals served as the inspiration for Foodhini.

Foodhini is one of the newest startups aimed at a crowded food delivery market, a 70 billion dollar industry with stiff competition from big names like GrubHub and Postmates. But Foodhini’s model is different – they call themselves a “for profit social enterprise” with a mission to build sustainable incomes for immigrants in the U.S. through a food commerce platform. But beyond the social good business model, the key differentiator for Foodhini lies in their delivery of local, ethnic cuisine crafted and served by authentic immigrant chefs.

The demand for food delivery is there – either in the form of hot meals ready to eat from nearby restaurants or a collection of ingredients with a recipe, designed to take the guesswork out of dinner prep. Foodhini plans to bring hot meals to your door, but with a twist. Instead of nearby restaurants cooking your dinner, it’s a local immigrant chef preparing authentic cuisine from their culture. Through a shared revenue model with each chef, Foodhini provides the operational infrastructure (a commercial kitchen and a commerce platform) and assumes the bulk of the risk while the chefs are tasked with preparing home-cooked ethnic cuisine that can be served for 2 or 4 people and ordered through the Foodhini online platform.

Vang, who previously led engineering projects for 3M, received his MBA in social enterprise from Georgetown. Having grown up as a first-generation Hmong-American, he recognized the challenges that immigrant communities faced and at the same time felt an appreciation for the unique foods and dishes served in those cultures. Vang used this background to create a platform to empower immigrant chefs and founded Foodhini in the summer of 2015.

“I believe Foodhini is a powerful force for change because we provide a scalable way to impact people’s lives,” said Vang. “Foodhini allows independent immigrant home chefs to leverage their existing culinary skill to create ready to eat authentic home cooked ethnic cuisines direct to consumer using on-demand delivery.”

Foodhini is currently part of the Union Kitchen food incubator based in Washington, D.C. and says that their market research shows around 41 million consumers, concentrated in urban regions, that have a desire for ethnic foods currently not available on restaurant menus. Currently, the startup’s website only shows one chef serving a menu of Laos cuisine, but the company plans to offer 10-12 different cuisines per day with between 1 to 2 meals per chef. The cost of each meal, between $11 and $14, is comparable to average takeout costs. According to Vang, for each meal sold on the platform, the home chef and Foodhini will each receive two and a half dollars of the revenue after costs. Their goal is to deliver 350 meals a day by 2017.

With a crowded food delivery field and the majority of food tech investment continuing to focus on delivery and food commerce startups, Foodhini will have to work hard to establish itself using a unique model. Focusing on social enterprise and the core mission to help immigrant communities might enable them to get some attention. But their ability to scale the platform to urban areas around the country will rely on the strength of consumer demand for locally produced ethnic food, delivered to their doorstep.