The Unbundling of Food

I saw this post a few weeks ago on how one of the working world’s greatest productivity tools (Microsoft Excel) was spawning a whole new generation of specialized software and technologies. This “unbundling” of core Excel functions, has lead to the birth of companies that specialize in doing a core function or set functions better and often with less hassle.

Excel is just one example of a formerly indispensable service that has seen it’s monopoly start to slowly erode. Some notable examples of unbundling elsewhere:

• Cable television: the internet age brought with it a fading dependency on television as our connection to the greater world. News and educational programming can be accessed online, sports through respective streaming services, scripted entertainment by Netflix and escapism through applications on our smartphones.
• Banking: one of my favourite unbundling acts. An individual can now open a bank account, make an investment, send money to friends or family and take out a loan, all without ever stepping foot within a traditional bank branch.
• Education: no longer is the field tied strictly to ivy-covered buildings and fancy pieces of paper. Options such as massive open online courses (MOOCs), nanodegrees, coding bootcamps and distance learning have completely changed the game.

Technology has enabled us to more effectively interact with distinct components of industries and services all around us. This has given us much greater freedom to carry out life on a more accommodating schedule. Unbundling has been a major cog in this shift, seeking to remove unnecessary complexity and hassle from people’s lives.

This unbundling of once static services got me thinking about what else is rapidly (or slowly) being torn apart into distinct parts. One industry almost instantly came to mind.

Food.

Everything associated with the production, distribution and consumption of what we eat is being transformed at an astounding pace. Entire sectors within the food industry are being completely overturned thanks to the proliferation of technology. Some of this is somewhat surprising given than some sectors within this realm (looking at you, hospitality and restaurant industry) are notoriously late adopters of innovation.

Where the most noticeable change is happening for everyday consumers is within the foodservice sector. The industry has gone from a very static existence to full-throttle disruption in the last five or so years. And due to size of the industry and its history of improvement, there is still much change to come.

Here’s a quick look at how individual parts of the dining experience have been unbundled recently.

• Reservations: no more calling or emailing a restaurant to reserve a spot. OpenTable, Nowait, DINR and others can help you snag a spot for dinner. This bodes well for both diners and restaurants, with patrons avoiding overbooked tables and restaurants avoiding the mess of managing a reservation book.
• Ordering: in urban areas, order ahead apps have flooded the market and hit on a pain point felt by most foodservice consumers (lack of time) to gain adoption. Apps such as Ritual, Just Eat, GrubHub and Grabb cater to independents and small businesses. Larger companies, including McDonald’s and Starbucks, have also recently integrated order ahead functionality into their mobile offerings.
• Delivery: is time an issue AND are you looking for a restaurant-quality meal from your couch? Just turn to Foodora, UberEATS, Deliveroo, DoorDash, Caviar, Eat24, . . . this is a long list. And rightfully so, this is quite possibly where the greatest impact has been. It seems almost non-sensical when a restaurant doesn’t have a delivery option nowadays.
• Payment: if you do decide to dine-in, the ways in which you can pay have started to change as well. While there has not been many successful startup efforts, tech firms have enabled us to pay with our smartphones (Apple Pay and Android Pay). This is the one segment where it is difficult to envision new entrants finding much success.
• Scheduling: behind the scenes, foodservice employees are starting to see the benefits of the industry’s tech revolution. 7shifts and Humanity are two solutions that are working to create schedules with less effort and increase consistency in employee’s weekly hours.
• Payroll: for anyone that’s ever been an hourly worker in the foodservice or hospitality industry, erratic and fluctuating income would likely be one of the top complaints. That’s why the work of Instant Financial is so impressive: allowing workers to get paid a portion of the paycheque immediately after a shift.

We now have a good picture of how the modern dining experience has been impacted by technology and shifting consumer preferences. For better or worse, many parts of the dining experience have been unbundled from the classic foodservice model.

So is that all? Nope, there’s still more sectors where disruption is needed.

As much as Amazon’s recent purchase of Whole Foods represented a consolidation of services, it also signified a oncoming wave to unbundle for many other players. These services have been around for a little while, but consumers are about to see much greater choice in the coming years.

Meal kits: the weekly “pre-packaged and portioned meals in a box” market should be fun to watch. Blue Apron was recently valued at $2 billion, so investors seem to believe that there’s something happening here. Other competitors such as Chef’s Plate, Goodfood, Purple Carrot and HelloFresh make an already hot space seem a little crowded. A fun prediction is that it won’t be long before we see popular independents, and then chain, restaurants start to offer branded meal kits for home preparation.

Grocery delivery: with Amazon now in the mix, local bike couriers could soon have much heftier deliveries to make. Services such as Instabuggy, Grocery Gateway, Instacart and Shipt already exist for making deliveries but lack partnerships with large retailers. This will definitely change. Grocers and delivery services will need each other in order to compete with Amazon. This healthy competition should be a boon for consumers.

All of this unbundling seems good in the present, but what does the future hold? In the short-term, consumers seem like obvious winners followed by companies that are able to stake a claim to performing one function of an experience really, really well (i.e. perfecting the model for delivery or online ordering). For those that are slow to adapt or perform many functions of an experience at a mediocre level, the outlook may not be as good. On the bright side, pretty much everything delicious is now on the menu, and within reach. That sounds pretty good to me.

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