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Food delivery services gain popularity during the pandemic – where are they Heading?

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With the Coronavirus bringing on robust lockdown measures nationwide across Canada, food delivery services have been pretty much the only viable business in hospitality. This explains the sideways integration from restaurants towards home delivery, and it’s fed the bursting appetite for some decadence.

Just as restaurants can re-open in Montreal though, Canada looks to open back up its doors to international travelers by the end of this month. Admittedly, highly infected countries may not make the list on who can enter as a traveler, but the threat of a second wave nevertheless persists.

It seems more likely than not that Canada will enter a second wave, just like most other countries. But, given their first-round, example-setting dealings with Coronavirus, they should still have things under control.

That’s just it though… Having things under control is usually coupled with stringent lockdown measures, which means businesses suffer. It really is a trade-off between health and business; which perhaps more widely reflects on how differently Canada and the USA have dealt with COVID-19. Afterall, fiscal stop-gaps can’t last forever.

So, this likely means restaurants will go back into closure, or at least some form of partial-closure, sometime in the near future. Perhaps some won’t even make it out in the first place. Delivery service is getting better at dealing with the high demand, and restaurants should still be at least making some regular income this way. The Restaurant’s fate isn’t sealed yet, and nor is the certainty of a second wave.

The meal kit boom

Our food shopping has also become difficult due to coronavirus with long queues, odd protocol and at times, empty shelves. Meal kits and food delivery services online have become the safer option as a result. Meal kits are a relatively new service in which the customer buys meals off a menu for the week, and they send you the ingredients. Nevertheless, they send the exact ingredients, so there’s no waste and no surplus.

It’s similar then to just ordering online groceries, but it’s much quicker. You don’t have to think of meals, research what you need, count how much of each you need, and so on. Many people don’t do this with regular online grocery shopping, but those are often the people contributing to throwing out inordinate amounts of perished goods, wasting food and hurting the environment.

It may not be a service for everyone, but the coronavirus has brought meal kits to a lot of people’s attention, and many companies have been fully booked throughout the pandemic as a result. Meal kit companies in Montreal for example, have witnessed a dramatic boost in customers and sales.

Even huge grocery stores have ‘suffered’ from being fully booked, let alone these more expensive, more specialized meal delivery services. To show their intentions on providing zero-waste food, Hello Fresh have donated $40,000 to food banks across Canada to highlight the food insecurities throughout the country.

The true reason behind their popularity though may just be their convenience. We are all running short on time, and they provide us with the recipe, ingredients and delivery — all we need to do is cook. This is why they’re so popular among the elderly, students and those with demanding jobs. But, with the current movement towards ecological awareness, meal kits are also riding the wave of conscious shopping.

Will this be a change of trends after Blue Apron’s relative failure?

Blue Apron has been struggling for a long time now. They’ve had layoffs, lawsuits and an underwhelming IPO. In fact, it has even been considering selling itself to maximize value for shareholders. It had been scoping out a potential merger option too, as well as potentially raising some capital. All of this wailing was before COVID-19, which normally you would assume that a company is hardly going to improve due to a pandemic.

It did. The entire meal kit industry is booming and the rising tide is lifting all boats it seems. It’s been forecast that the market will witness steady growth until 2027 — post Pandemic. Blue Apron’s stock price had an incredibly impressive rally during March against the cliff that the NYSE fell off during March’s first 3 weeks.

Of course, once the pandemic slows for good and hysteria subsides, many will return to their restaurants and supermarkets. But the key here is that the number of customers post-pandemic will still be way higher than pre-pandemic for Food delivery services, Blue Apron, as they have entered a new growth cycle. Many new customers will be telling their friends too, and the brand awareness will grow.

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