How Are Innovations in the Delivery Vehicle Going to Change Food Delivery?

How Are Innovations in the Delivery Vehicle Going to Change Food Delivery?

By Kitchen United Executive Vice President of Information Technology, Jessi Moss and Vice President of Operations, Carl Orsbourn

Over the last couple years, we’ve seen a flood of investment into the development of new last-mile delivery vehicles. Zume Pizza received a $375M investment from Softbank for its revolutionary pizza-warming truck (soon after, Pizza Hut announced its own similar project). Wayback Burgers also built an eco-friendly electric food truck, and other “mobile storefront” providers such as Fleat stepped into the market.

In addition, a separate set of companies are focused on automating the delivery process; companies like DoorDash and GM, who partnered to test self-driving cars for food delivery, and Starship Technologies, who sent a fleet of snack-serving robots to roam the campus of George Mason University. Uber and FedEx’s drones and rovers (respectively) aren’t to be forgotten here, either.

So the food industry finds itself with a plethora of future technological possibilities that will (should) make the delivery experience better and continue to build an already fast-growing sector. However, these innovations come with different benefits and drawbacks, different users, and different launch timeframes – all of which impact restaurants’ strategy in utilizing them.

We asked Kitchen United’s EVP of Information Technology, Jessi Moss, and VP of Operations, Carl Orsbourn to weigh in with their evaluation of each category of technology from their unique perspectives. Jessi’s background includes leading technology divisions for Pick Up Stix and Leeann Chin. Carl’s background includes managing operations for Ampm. Here’s what they had to say.

Mobile Storefronts

This is the category under which we’ve filed Zume, Wayback, and Fleat. Essentially, kitchens-on-wheels.

Jessi: The resurrection of the mobile storefronts as they regain popularity will reintroduce an experience that has been unfashionable. Vehicles equipped with refrigeration, ovens, automation technology that is driven by complex data, the mobile storefronts will be better equipped and stocked to meet the demand of the consumer.  The just in time order from the consumer can be fulfilled by a mobile storefront within the general vicinity and be delivered to that consumer at the product’s highest quality. I remember as a child seeing the Schwan’s food delivery truck traveling down the street while visiting my grandmothers house in Minnesota. I would run to the large panoramic window and press my entire face against it with excitement and a bit of anxiety that the delivery truck may pass grandma’s house.  The Schwan’s truck meant to me that there would be delicious frozen pizzas, ice cream treats and many other refrigerated products. Mobile storefronts build a direct relationship with consumers by putting the product in front of a consumer base that may be out of a brand channels reach. The impressions that are created with potential consumers is invaluable; just ask this kid.

Carl: The use of technologies from EV to drones and robots certainly attract attention from the innovation savvy media but the realities of commercializing this remain front of my mind. The investment in one vehicle or technology type to service a few guests needs to be efficiently delivered for it to be a scalable and sensible path for consumers to enjoy or it could risk the price of such convenience being too high against traditional alternatives. I think of the milkman who used to serve us fresh milk and how that capital intense and labor heavy model was replaced with improved grocery store logistics and higher levels of product quality. How many guests could one unit of technology effectively serve on a Saturday night? That may be limited on the location where they are at and the number of ‘relocations’ during that period.

Takeaways:

  • Benefits include vastly improving the delivery customer service experience and hotter, fresher food
  • Challenges include extra cost to consumer for service and better quality, and labor cost to business to staff the vehicle.

Automated Delivery

In which robots (or robotic systems) do all the work. These innovations include drones, self-driving cars, and robotic rovers. While still some years away, how do restaurants go about processing and evaluating this opportunity?

Carl: The beauty about having someone there [in a mobile storefront] is that you know the food is going to be hot. When it’s in a drone, there’s a question mark as to how warm it’s going to be kept. So the interesting thing is, do you get to a point where the drones have some kind of capability beyond just thermal support, to heat the food in some way, or does the food even get cooked en route?

There’s also an opportunity to prepare for autonomous delivery without sitting on your hands for the next few years. Think about it this way: how do you enable Kitchen United to operate with a drive-thru setup? Instead of having drivers come into the location to pick up, you have the package go straight to their car. That’s quite solvable, but it does require some design specs and some system changes, and the right locations to enable it. Now once you have that, you could argue that you’re potentially creating the channel for a new technology to operate through that same channel.

Jessi: Let’s start with the last 100 feet. You have to have everything laid out or you have to have everything mapped – all the rooms, all the dimensions of the buildings – for a drone to actually navigate in that particular facility to drop the product off. Our buildings are not really built for drone delivery, yet, though I assume that they’ll eventually have landing pads of some sort, and then the consumer will have to come pick it up from that drop-off point.

In terms of prioritizing, you should consider that in order for a drone to be able to fully complete the delivery, everything must be mapped. I know that they have the technology, there are people going through buildings to provide that geomapping, but then there’s the other part: how do the pieces fit together? Is it a land drone that takes the product from a driverless vehicle up to the door? Or does an airborne drone deposit the order on the back of a rover to carry it up the stairs to the correct floor? Either way it’ll definitely be a challenge; I mean, drones can’t push the button on the elevator yet.

Takeaways:

  • Benefits include faster delivery, no labor cost, and ultimate convenience.
  • Be mindful of high fixed cost of purchase/implementation and the timeline to deploy taking longer due to nonexistent mapping and infrastructure.
  • Understanding the differences between the last mile and the last 100 ft is a key step to analyzing the whole opportunity of automated delivery. For example, a self-driving car may fulfill the last mile (from the kitchen to the outside of the consumer’s residence), where then a rover takes over to carry the delivery the last “100 ft” to the consumer’s door.

When and how?

Automated delivery is approximately 8 years out (until 51% market penetration), and that’s an aggressive estimate. Mobile storefronts, however, may catch on much sooner.

In terms of evaluation, it makes sense to prioritize mobile storefronts in the near term, and keep in mind automation in the longer term (unless a brand has presence in an innovation hotbed market, such as San Francisco or Columbus).

Obviously, for restaurants the technology is highly cost-dependent.

Jessi: Marketplaces and restaurants who may want to offload labor cost and invest in owned automated delivery fleets. They may also opt to lease small groups of vehicles – either mobile storefronts or automated vehicles – for individual trade areas, rather than purchase outright.

And finally, we asked: what is driving this innovation? The technology, or the demand?

Businesses have demand, yes – both from restaurants and from marketplaces – from consumers, not necessarily yet. But consumers have yet to sample the technology; it could be that there is a definitive preference for better-quality delivered food, or for even greater convenience, that will drive the technology in a more specific direction. It’s too early yet to say.

Conclusion

Tracking innovations in the delivery vehicle will be a key component to succeeding in the fast-growing off-premise sector, and successful implementation of such an innovation will lead to even faster growth. Though there are many technologies in development, there may never be one clear, best solution for all restaurants. Instead of making a hard bet on either mobile storefronts or automated delivery, restaurants should identify which parts of their brand can be improved through utilizing each new method, and begin preparing their systems to adapt to whichever is most in line with their delivery experience goals.

Carl Orsbourn is the VP of Operations for Kitchen United. His background includes managing operations for Ampm.

Jessi Moss is the EVP of Information Technology for Kitchen United. His background includes leading technology divisions for Pick Up Stix and Leeann Chin.

KU offers restaurant brands a turnkey way to expand into new markets and reach the off-premise diner. Subscribe to the KU Insights newsletter where we break down industry trends and give an insider view of what’s happening in the world of KU.

Featured photo by Bruno Martins on Unsplash.

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