Delivery apps open up online food market

Behind the booming online delivery market are the “dark kitchens” creating hundreds of meals without tables, chairs or waiters.

They are springing up everywhere.

One housing six restaurants, an ice-cream parlour and a bottle shop operates in a laneway in inner city Melbourne, occupying a space less than half the size of a tennis court.

Across town in Footscray, there are two more dark restaurants. And just a few kilometres away in Richmond, there are two more.

And those two are virtual – they only exist through an app.

Deliveroo and restaurant conglomerates like George Calombaris' Made Establishment Group are building most of these restaurants in capital cities.

But there are others operating out of backyards or next-door neighbours of established restaurants.

Levi Aron, the general manager of Deliveroo Australia, said it’s a good arrangement with the data indicating exactly what customers want. That means the delivery company will match demand with supply.

"We're building kitchens around Australia, around the globe," Aron told the ABC.

"[We] use our data to find where those gaps are — whether that's a cuisine gap, a pricing gap — get a property and build kitchens fit for delivery."

The delivery services market, powered by apps on smart phones, is growing. It racked up $1.5 billion worth of orders in Australia last year.

Morgan Stanley forecasts that the market will more than double to $4.2 billion by 2025.

The kitchens are fundamentally different from those found in normal restaurants.

For a start, they are streamlined for delivery.

Also, the menus are shorter than the normal dine-in restaurant.

And the food and containers are optimised so that menu items travel better, Delivery is everything.

The restaurants pay for staff and produce, but the app provides the space for free.

Deliveroo takes a higher percentage of the meal costs. Potentially, that’s up to 35 per cent although normally it's between 20 and 30 per cent.

Leon Gettler - 13th April 2018