Innovation is key to all kinds of success, yet business innovation seems to be difficult to discuss. Ask 15 different experts what innovation is, and you’ll get 15 different answers, yet at the same time, innovative companies are easy to recognize. Innovative brands are often disruptive and change the status quo, like brands in the burgeoning yet highly successful fresh meal delivery industry such as HelloFresh. Our snapshot will give an overview of the innovation in food delivery brands, services, and technology.
Top Companies Innovating Meal Delivery
Emulating industry leaders and brands that successfully break into new markets is a key way to see what does (or doesn’t) work with customers and learn the underlying tactics that make them leaders in business innovation.
One of the market leaders in meal subscription services that ships 7.5 million meals to 850 thousand home chefs worldwide monthly, HelloFresh, brings cooking creative meals back into the home. It makes the entire process easy by allowing subscribers to customize their food preferences via the website and by shipping everything the consumer needs including clear preparation and cooking instructions, along with the precise amount of ingredients needed to prepare the chosen number of servings. It provides incredibly healthy, fresh ingredients that are locally sourced and occasionally even partners with celebrity chefs (e.g., Jamie Oliver) and delivers them to the consumer’s front door.
Where HelloFresh and its similar brands, like Plated or Blue Apron, shook up the standard restaurant and fast food industries, Freshly stands to disrupt the meal subscription industry. It offers many of the same qualities (fresh ingredients, elevated food experiences), but rather than shipping ingredients to craft a meal completely from scratch, Freshly provides ready-to-heat meals, which maximizes the efficiency of the process for subscribers.
Traditional taxis have a hard time standing up to brands like Lyft, because they provide faster turnaround times for pickup and spur improvement for drivers through its rating system. It also benefits from an easy-to-use app and allows normal users to become drivers, assuming they and their vehicle meet the standard qualifications. Lyft has begun to partner with brands like Walmart and organizations like Meals on Wheels to help deliver food to people at home.
Arguably Lyft’s biggest competitor and No. 3 on Fast Company’s list of 2017 World’s Most Innovative Companies, Uber provides a sleek app and many of the same services. What garnered the transportation service its spot in the list, however, is the way the brand has promoted and accelerated autonomous driving. It currently operates in 73 countries. While it also participates in delivery programs like those for Walmart, its breakout in meal delivery is UberEats, which looks to change how restaurants handle delivery.
What started as a simple way for college students to connect has grown to be a global giant, yet in 2016 Fast Company put it on its World’s Most Innovative Companies for continuing to “act like a startup.” It’s a robust example of a company that is continually evolving to provide efficacy and efficiency for the general user and businesses alike, from its Messenger app and emphasis on “thumb friendly” mobile techniques to data-based ad targeting. In terms of food service, it now offers an in-app food ordering and delivery option where consumers can order food directly from a company’s Facebook page. In partnership with Delivery.com, a food-delivery startup operating in about 40 US cities, Facebook provides any restaurant with a business page and a Delivery.com account, the ability to take orders from their page.
Climbing from its No. 6 slot in 2016 to No. 1 in 2017, Amazon lives and breathes innovation. Where once it was thought it couldn’t compete with traditional book sellers, this global powerhouse is regularly disrupting new markets and isn’t afraid to break expectations to continue meeting customer needs (see: catapulting e-readers to mainstream popularity, actually opening physical stores). It’s taking on food delivery services with the same gusto and innovation: not only is Amazon approaching click-and-pickup, it’s offering grocery delivery and intends to take UberEats head on with its new Amazon Restaurants service.
What They’re Doing Right
Innovative companies are regularly generating new ideas about how to approach their own industry or a new market while also spending the time to execute those ideas well. They focus on acquiring different perspectives that allow them to constantly move forward and bring value to customer and company alike by addressing real problems. There’s much to be learned from these thought leaders, so we’ve contextualized them according to how they represent innovation within the food delivery services industry.
Effectively meeting needs.
Having an effective answer to a real problem is the name of the game in business innovation. Amazon found its grocery delivery service to be so effective that it’s expanding into click and pickup groceries, which streamlines the process and adds an element of immediate satisfaction. It’s also banking on the effectiveness of its technology with its new Amazon Go offering, a frictionless grocery store where customers just need to check in with their app, and Amazon tracks everything else to be charged upon exiting. Hello Fresh offers a straightforward answer to customers who can’t afford the time to grocery shop for meals they might be interested in experimenting with; with just a box of labeled ingredients and easy to follow instructions, the brand fundamentally alters the way people approach their meals for the week.
Provide efficiency as value add.
Its most recent round of investments is proof of Freshly’s efficiency, at least in part. Comparable prices to competitors like HelloFresh generate more value because time-starved customers have less work to do to have their delicious meal. Perhaps a better example is Facebook’s in-app food ordering feature; it’s partnered with Delivery.com, but doesn’t even require users to have a Delivery account as long as they have a credit card on file with the social network. Uber and Lyft also bring a new layer of effectiveness to grocery delivery; by partnering with Walmart, the retail giant can provide the delivery of groceries ordered online with the promise of timely and even same-day deliveries for lower costs, all while benefiting the drivers through additional driving opportunities.
Capitalizing on creative solutions.
Creativity is what sets new solutions apart as innovations in the eyes of consumers. Freshly changed things up, potentially revitalizing the food subscription service industry, by providing meals that were already prepared. Perhaps the most shining example is Netflix. In 2015 it unveiled a branded DIY button that could be customized by customers to link to particular apps and commands to craft the perfect date night; with a single press of the Netflix and Chill button, users can dim their lights, queue up the streaming service, and even order dinner from major services like Seamless.
While these brands are known for their charitable options — AmazonSmile donates a portion of sales to user-selected charities and offers to ship Goodwill boxes for free. For example, while Facebook entered the charitable giving realm in 2015 with its Donate action button and standalone fundraiser Pages — it’s the smaller brands that stand out the most for their innovation in integrity. In response to self-led volunteer initiatives formed by its drivers, Lyft officially partnered with Meals on Wheels to better enable drivers to perform acts of kindness and make more charitable efforts in the future possible. On a much smaller scale, Facebook also maintains its sense of integrity with its food ordering service specifically because it doesnt take a cut of restaurant profits.
While some brands offer limited services while testing the solution, UberEATS expanded to 22 new countries last year, and had already invested in six cities internationally. Amazon only has one location for its non-traditional grocery store at the moment, and its Amazon Restaurants service is limited to the US,
The Future of Food Delivery
Given Amazon’s entry into the market, food delivery services aren’t likely to diminish any time soon. In fact, home delivery from the top five global food service markets is expected to see growth to nearly $40 billion by 2020. And the market has yet to truly be saturated. However, there may be some consolidation on the horizon. Before Freshly saw its fresh round of funding, the number of meal subscription services was starting to diminish as startups closed their doors. Freshly has injected a new element, and brands like Hello Fresh are looking to customization to freshen up their offerings, but it remains to be seen whether consolidation remains in the meal subscription future. On the restaurant delivery spectrum, keep an eye out for new businesses like Britain’s Deliveroo, which is exceptionally streamlined and opens up delivery channels for high-end yet smaller-scale restaurants.
Technologically speaking, brands will become more and more mobile-first, according to Hello Fresh’s CEO in 2015. Brand’s like Britain’s Just Eat are even investing in augmented and virtual reality, as well as autonomous delivery robots, and it’s already utilizing AI like Amazon’s Alexa, which facilitates reorders by voice command. It’s also developed customer service chatbots on a Microsoft framework. Innovative brands will stay on the forefront of technological developments to harness them quickly to best serve customers.
There’s a lot to be learned from innovative companies and the way they’ve approached food delivery. Their ability to uncover new products and services that take on a real challenge in a fresh way to bring better value to customer and company alike is something that every business should emulate.