Not all business models are equal
This post first appeared on blackdog.ie “Not all business models are equal”.
Recently in my office there has been a few lunch delivery services that have popped up. Anything that helps me avoid going out in snow and freezing temperatures is a good thing. The two that I’ve tested are Fooda (www.fooda.com) & Peach (www.peachd.com). I started to think about while they both basically do the same thing, they are in fact quite different. In this case I tested Fooda’s popup store (they also do food delivery & catering).
Both services partner with local restaurants and food trucks to get them in front of the eyes of customers who may not have already tried them out already, or who would otherwise eat somewhere else in the downtown area.
1) Communication methods
Peach is quite proud of their SMS system, which sends you an SMS each day, with a picture of the food and to order you simply need to reply yes. You can also order online, they don’t (as of yet) have a mobile app offering. At the launch in Boston I had some issues receiving SMS’s. You can also see the week’s menu on their website and order directly from there. In my case this was the easiest way to order.
Peach had some issues delivering SMSs to my phone. I’m not sure if it’s my carrier (T-mobile), the SMS sender (probably twilio) or Peach’s fault. Either way the SMSs weren’t getting through, their support staff were helpful and useful.
Fooda emails you daily the details of the menu at your location. You can also see the week’s menu on their website.
2) Ordering & payment
To order at Peach you need to commit by 11am by replying to the SMS (or ordering online by 11am). Once your food arrives you’ll get a further SMS about the pickup. In my case the food arrived around 11:45am. Your food individually packed up and is in a bag. The bag in turn has a list of names on it. So you get to choose which portion you want.
Concerns: I would have concerns about their ability to keep your food warm and in the condition it was prepared in. Once the food is portioned out and transported to the office it’s likely that these will degrade over time. If I was a restaurant I would also be worried about these issues as well, their last quality control check is when it’s put in a heated / chilled bag possibly 1–2 hours before the customer eats your meal.
Fooda Popup is a physical stand, in my case it’s in the building lobby, where you can order and pay right on the spot. You can easily customise your order and collect it warm when you want it.
Concerns: The food is served in the lobby of our building. While the food isn’t prepared on site, it’s just portioned out. I didn’t see any facilities for staff to wash hands or any food permit posted. I’m not 100% sure they need this.
Where does the money go
This is all a bit of conjecture so I may not be 100% accurate in my analysis.
Peach does all the payment processing on behalf of the restaurants, and they then in turn pay out the restaurants. Opening up new locations for delivery is quite straight forward.
I did notice that Fooda’s servers were using Square and that the billing was going directly to the restaurant. I’m guessing that Fooda either charges a % of sales or a location fee, or both. Fooda curates the locations on behalf of the restaurants. Controlling the inventory is key here. The effort to open new popup locations is high.
Both services are discounting their food right now, I guess you have to spend that VC money ;).
Fooda guarantees that there will be at least 1 dish that costs $8, where as Peach have dishes that cost significantly more at $11.72. I think that Peach’s price points are still a little high, the benefits of bulk ordering for a group doesn’t seem to be passed on to the consumers. The only benefit they appear to be offering is the easy ability to order.
Both operations are targeting bulk buyers like businesses that can pay a portion of the food costs on the employees behalf. Fooda also has a catering arm, which can deal with one off orders.
I did notice that I enjoyed the whole experience of seeing my food being assembled before my eyes with Fooda. You can talk to the servers and find out a bit more about the food that they are selling. These staff are employees of the restaurant / food truck.
For Peach your food arrives and while there is someone at the pickup location to help with orders, they can’t really offer you any information about the food that’s there.
Final thoughts & concerns
Fooda curates the locations for the restaurants and appears to be more like a hot desk for them. Most of their menus are from food trucks.
Peach is bundling ordering with delivery and making it simpler.
Both companies are opening the markets at the right time of year, namely winter. People are more likely to go for something quick that will help them avoid a frosty walk. It will be interesting to see how these companies get on in the summer time.
As far as I can see both companies haven’t focussed on customer loyalty schemes yet. i.e looking to reward behaviour like multiple visits to a location. This could be due to the fact that margins on food are low. Peach does have a referral system to encourage their growth.
Try Fooda & Peach out.
Of course I have links if you’d like to try either or both.