"It will soon be just as cheap to have your food prepared and delivered as going to the grocery store and making it yourself."
I doubt this very much.
I doubt this very much.
One major expense for a restaurant is rental costs for a dine-in area. These don't apply to cloud kitchens. More so, the cloud kitchens are not in a very popular high-rent area.
However, cloud kitchens can increase competition resulting into less profit.
That is what makes a restaurant a restaurant, rather than a takeaway. Restaurants didn't end up with dine-in areas by accident, nor do they offer in-house dining as some kind of loss-leader, they have it by choice because it makes them more money!
(that is, pre-Covid, of course...)
I think that was true in certain situations, but very hard to pull off in general. We are seeing a shift away from restaurants as a luxury good, and in doing so I think the mythos of white table cloths, domestic labor cos-playing, etc. will go away. That, in turn, was I think a big part how they raised margins, so I think the basic cloud kitchen premise is correct.
It's hard, but many do it. The biggest advantage sit-down has is "addons", primarily booze. Breaking even on the food and making a profit on beer, wine, and cocktails is very common. Cocktails are intended to be drunk at the time of mix, and I have better quality and cheaper wine and beer already at home. No reason to order it with delivery.
Also when you're in the restaurant, you can (and are encouraged to) keep ordering more food vs a one time transaction on your phone.
Absolutely. That's why good restaurants invest in wine stewards, and extra table staff, and coat check facilities, etc... People pay extra for the experience of dining out. Not everyone eats like they're in college for the rest of their lives.
True, but this applies to a minority of upscale restaurants not majority of the restaurants. There is of course going to be a need for these date-night, business-lunch like restaurants that will always cost more than cooking at home.
Restaurants are a science. There are entire companies devoted to using subtle cues to get dine-in people to stay for dessert.
"Distributed hyper-local private ghost kitchens". (OK, I just mean home cooking).
But looking at your own kitchen as a tiny business, it's pretty clear that market size (OK, I just mean household size + friends & relatives) is probably the key factor in amortising overheads (food waste, labour, fixed overheads like space & equipment, etc).
The time most people would spend cooking or grocery shopping isn't financially valuable time: it isn't time I would've worked another hour, and if I did, I'm salaried so the wage is the same.
For some, it will still feel comparably expensive. Why spend $25 on delivery, if I'm not going to do anything for the next hour anyways and raw materials cost $5? I'm paying rent on a dwelling that has a stove regardless of the decision.
It comes to having the disposable income and being price insensitive.
I think the idea is the overall costs will be similar enough that a lot of people would consider delivery from cloud kitchens. This does not apply if it costs 25 for delivery.
For people who have ample time, retired people, people who take care of their kids home, the time factor doesn't apply. But nothing really applies to 100% of the population.
If the costs are similar, people would rather spend an extra hour with their loved ones, playing video games or whatever makes them happy than cook.
Until preparation and delivery become roboticized, it is absolutely not true.
I live in New York City, eat meat, and it's easy to spend only ~$300/mo. on groceries for the month if you're paying attention to prices and cooking yourself.
That's $3.25 per meal. Please show me how exactly I can get nutritious full prepared meals at this price, let alone delivered...
Maybe this doesn't qualify as "full" (or possibly even "nutritious") but could food preservation figure into it?
also, recognize there is a demand.
Another thing I think about, is that probably in the 90's (the era of the CD) I remember meeting someone who worked in digital music (this was so long ago I can't recall who). But I remember what he said "in the future, digital music will probably cost like 10 or 20 cents a song or less". I couldn't imagine it at the time.
Could the same happen with food? Maybe there's a lot of overhead built into our current model of getting "cheap" groceries and cooking.
Could $300/mo on groceries be expensive compared to buying component items like flour or rice or salt?
and what if delivery brought a week of meals instead of one-offs?
Velocity (in money) is an unintuitive concept (Returns = Margin * Velocity), but it's how many ethnic grocers get returns on relatively low margins. (that, and tremendous cost control, staffing with family members, different supply chains, etc.)
$300/mth sounds about right (I checked mine, ~$325 in Chicago, at big box grocery stores, eating healthy, lots of meat and produce). There was a time when I was shopping exclusively at ethnic groceries and my average was ~$200/mth ($50/wk).
But I cook for myself because food prep/delivery simply isn't nutritious enough. There's just no way to get enough high-quality protein and high-quality veggies. (Like, I order a salad, and it has 3 cherry tomatoes in it when I want 20. Or the salmon filet is 3 oz when I need 10.) Delivery is either way too high on carbs, or way too low on calories.
And here's the secret: if you do all your prep work and actual cooking in huge batches and then freeze, it takes remarkably little time. I'll cook two pork shoulders, or ten pounds of chicken thighs, or twelve eggplants, at a time. I've got probably 200 Rubbermaid freezer containers of various sizes.
Then when it comes to mealtime, it's just assembly that takes 5 minutes. Microwaving protein, assembling a salad, toasting some bread. An easy breakfast burrito in a pan with some fresh eggs. That kind of thing. And of course I throw everything in the dishwasher afterwards, and it definitely takes less than a minute to wipe down my counter and stove afterwards.
I shop once a week for milk, eggs, fresh produce, etc. It takes a grand total of a half an hour.
Granted I have a lot of culinary experience. But honestly, the total time spent cooking+shopping is minimal. Plus I enjoy it anyways.
I mean, if you're making complicated recipes every night cooking can easily consume all your free time. But if you plan, prep, freeze, and never use recipes because you know how to cook from experience, the time spent just isn't significant in your life.
How it would work is:
1. You tell the service that within a certain time slot, you’d like your order of [insert order here] to be delivered.
2. All your neighbours do the same
3. At the time slot, a vehicle (or robot) deposits the food in some kind of storage locker for you and several of your neighbours to pick up.
This would substantially drive down the per-order delivery cost.
A dense city where everyone lives in apartments, such as New York, would be an ideal place for this idea, since orders for everyone in your building could be dropped off at one point
The problem is that people want 30 different types of food (Chinese, Italian, Ethiopian), they don't want it cold, and while NYC is dense it's not dense enough.
Even in a building with 100 apartments (which is much larger than the norm), at most maybe 2 apartments will want the same type of food in the same half-hour slot. It's not going to be much different from what a delivery driver already does, which is take out 3 orders from the same restaurant to 3 different buildings at the same time.
And remember that's just the delivery aspect. The costs of food prep are massive too.
Cloud kitchens, with dozens of restaurants, delivering food to a single drop point, serving dozens of residents at once, would enormously drive down delivery costs. Likely to well under a dollar per order.
I think the biggest stumbling block with this idea is that enormous amount of customers that would be needed to make this operation efficient. You’d need to convince hundreds of people within a neighbourhood or apartment block to give up cooking, and rely on the delivery service
If more people work from home in the future it could make sense as an alternative to the office canteen, not the traditional anything anytime takeaways.
If you are an anxious overachieving professional, the above is probably already true and you survive off fast casual.
If you live in a food desert working 3 part time jobs, the above is probably already true and you survive off convenience store non-perishables and fast food.
I like to cook. If my home situation was a little bit different, I'd probably cook full proper meals every night, no questions asked. It would take me at minimum an hour each night, and often more when you include prep and cleaning (which you should, they're integral parts of cooking a meal).
Combine that with long hours at work and the fact that I like to at least get some leisure time in my day along with sleep, and those hours add up. I've actually taken to eating mostly frozen food (stuff that still requires a little prep, not TV dinners, mind you), because it's a little faster and the cleanup is easier(stick some frozen chicken on foil in the oven and the cleanup is "throw the foil away"). When I don't do that, I'm meal-prepping on sunday afternoons, which takes four or more hours out of my precious weekend (with the exchange of being able to just microwave whatever I'm eating for lunch and dinner that week, again saving time).
Yes, where I live, groceries cost far less than anything you can get at a restaurant. And I'm hesitant to say that this will go anywhere, because it really seems like a long shot. But if it does get somewhere...the dollar cost of groceries is not the only thing to focus on. Time spent making meals absolutely matters.
Totally. I love cooking. But when I say I love cooking, I mean I love standing over a pot or pan, stirring, tasting, seasoning, and sauteing. Prep work is the worst part, and also often the part that takes the longest.
Is this the case where you live?
In my country, daily restaurant eating is less a sign of success, and more a sign of not knowing how to cook, which is a source of embarrassment for most overachieving professionals.
I have been living alone for a long time, but was used to having lunch in cafeterias / restaurants and only cook on weekends mostly. Over the last months of working from home, deciding to cook for myself ~90% of the time, it took me quite a while to figure out a good balance between being cost/time effective, having little waste as well as being reasonably diverse and fresh. E.g. what I have seen some times, that people food prep on Sunday 5x the same lunch to eat during the week, absolutely does not work for me.
It is cheaper than having food delivered, but only if I don't count my own time. If I didn't actually like cooking or weren't reasonably good at it, I would order food most of the days.
Let's assume for a second that it is actually cheaper for the company (a very big "if" considering the profitability of current delivery operations), do you really think they'd just pass on the savings to you, as opposed to pocketing them and/or wasting them?