As grueling as the pandemic-caused disruption and challenges have been on the foodservice industry, COVID-19 also sparked changes that will positively impact the future of the channel. Among them are the emergence of new e-commerce platforms and digital investments to enhance distributors’ existing digital portals.
The shift to doing more business online has lifted newer suppliers in the channel, such as Cheetah, ePallet and Rebel Smuggling, and strengthened big players like Amazon, which launched Amazon Business six years ago. Cheetah, an app-based restaurant supply company, was started in 2015 and now serves more than 3,000 restaurants in the San Francisco Bay Area. ePallet classifies itself as a technology and logistics company offering wholesale food by the pallet nationwide from its online platform. Rebel Smuggling is an online marketplace offering 20,000 items that’s focused on using technology to minimize costs associated with logistics.
Not unlike last-mile providers Instacart and Shipt in the retail sector, these and other emerging players in foodservice are adapting to where the foodservice industry is heading with digital solutions and we expect this trend to continue.
At more established, traditional distributors, investments in e-commerce capabilities and stricter requirements for online content have improved operators’ online experience and supported more digital commerce. For example, Ben E. Keith is rolling out new features like video capabilities on product pages within its Entrée platform to provide more information to operators during the shopping process. In early June, Gordon Food Service implemented a product information management (PIM) solution that will act as a content hub with the intent to improve product pages and better connect with operators.
While these digital investments are enhancing the traditional supply model, the evolution of consumer-facing digital platforms present a mixed bag for foodservice operators. One example: As consumption of alcohol grew during the early months of the pandemic and restaurants adapted to takeout- and delivery-only service, many operators began offering alcoholic drinks to go. But app-based alcohol delivery companies like Drizly also saw business grow as at-home diners began ordering drinks from their couch. Uber noticed this trend and in February 2021 acquired Drizly for $1.1 billion with plans to integrate the service into its Uber Eats app.
While meal delivery services like DoorDash and Uber Eats can help restaurants solve for the last mile, the convenience of Drizly could eat into restaurant profits typically made on alcohol consumed on premise. If takeout and delivery food orders remain high and Drizly provides the accompanying cocktail, the shift in revenue outside of restaurants and bars could remain significant.
At every point of the supply chain, digital investments are rapidly transforming the foodservice industry — and distributors and operators are working fast to keep pace on all fronts.