Uber Eats Is Killing Families

A pet peeve of mine is food delivery.

Think Deliveroo and Uber Eats.

These young kids are too lazy to get up off their rear end and make themselves food.

Instead, they spend their earnings on cravings and pay a delivery fee on top of that.

Don’t these kids have cars? Aren’t there shops within a few minutes of them? If you’re going to eat out, why not save on the $5 delivery at least?

I just don’t get it.

On that note, let’s do a little survey. This is a call to all Money Morning readers. Do you find yourself eating out and ordering food more often? If so I want to know why. If not, I’d also like to know why.

You can email your answers to cs@portphillippublishing.com.au. Make sure you include ‘Money Morning food delivery’ in the subject line so that I see it.

I know a lot of people who love food delivery, though. The convenience of fewer meals to cook and fewer plates to clean, how could you say no?

Food delivery is now so popular there are warehouses filled with dark kitchens. These are restaurants set-up for the sole purpose of online orders.

There are six dark kitchens stacked together off a lane way in inner-city Melbourne.

We’re building kitchens around Australia, around the globe,’ general manager of Deliveroo Australia, Levi Aron said.

‘[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.

Welcome to the service economy, I guess…

Free report: Aussie stock picker, Sam Volkering (with gains as high as 1,431% in the last 18 months) reveals what he believes are his next four big potential winners.

Food delivery is about to get a whole lot bigger

You’ve probably heard me bang on about a localised world before. If not, you can read about it here, here and here.

This world is about to get a whole lot more local. Not only is manufacturing dying, efficiency gains are outstripping demand…we’re also moving towards a service economy.

And by definition, most service businesses are local businesses.

Food delivery is one example. You’re not going to order food from China are you? Chances are you’re going to order food in your local area.

And it’s this move to local economies that will be the biggest change in the next decade.

But back to food delivery…

In 2017, Aussies ordered $1.5 billion worth of food from apps. And it’s likely to get much bigger from here on.

According to data from the Australian Bureau of Statistics (ABS), Aussies are consuming much more food on the go than they were before. From 2012 to 2016, on the go food grew by 55%.

The same is true for Americans. Authors of a 2013 paper found a long-term trend of people ‘eating out more and cooking at home less’.

You can probably guess what this means for businesses like Deliveroo and Uber Eats? Their market is about to get a whole lot bigger.

And depending upon the loyalty of customers, industry profits might either be temporary or permanent.

From The Sydney Morning Herald (SMH):

Investment bank UBS in 2018 estimated the global food-delivery sales market will grow from about $US35 billion to $US365 billion by 2030. If UBS is right, there will be a tenfold increase in the value of home-delivered food in a little over a decade.

UBS hypothesised that most meals currently cooked at home will instead be ordered online and delivered from restaurants or centralised, industrial kitchens by 2030. Imagine if millions of Australians had their meals delivered to their home.

Of course, you might want to take that figure with a grain of salt.

Trends are moving that way. But anyone talking 10 years into the future is guessing at best. SMH then asked what fewer home-cooked meals might mean for society.

I wonder what the food-ordering boom will do to social connections. Families cooking a meal and eating together at the table builds relationships. It’s far healthier than people ordering food online and eating it from containers in front of a screen.

Will there be less family dinners around the table? Will mothers and fathers lose precious time with their kids because family meals are few and far between?

Potentially. But I hope not.

Strong family units are the backbone of our society. Without them, ‘societies grow weak,’ as Cardinal Seán Brady puts it.

But not only are their social implications. This food delivery movement also has stock market implications too.

Have you heard of Marley Spoon AG [ASX:MMM]?

Millennials are now used to extreme convenience

Marley Spoon is a recent addition to the ASX. The service is also a recent addition to a couple of Aussie households.

Marley Spoon is the latest and greatest home delivery meal prep service. They focus on healthy home-cooked meals.

They send you all the ingredients and a recipe to make a meal in 30 minutes. All users have to do is turn on the pan or oven.

Yet here in lies the first road block for many millennials.

There’s a growing number of Aussies heading to the door (because their delivery arrived or because they’re eating out) and not the kitchen.

One fund manager that has steered clear of Marley Spoon is Dean Fergie.

Millennials and even the older generations now are used to extreme convenience,’ he said.

Why are you going to spend $12 for the ingredients when you can go a step further and have a quality meal delivered straight to you for $12? That’s the sort of thought process.

I know a few people who’ve signed up to Marley Spoon. They’ve since cancelled their subscriptions, though.

Maybe a gym-style membership is in order.

Who really wants to go to the gym day after day? Definitely not the majority of people who sign up. They find out it’s hard to lift weights, run and sweat. So they give up after a few visits, but continue paying for the next 12 months.

Could Marley Spoon subscribers feel the same way? I think so. The first week might be fun. Maybe the second week is ok. But the third, fourth and tenth week might be too much.

Sometimes people don’t want to cook. They just want someone to take care of it for them. So maybe Marley Spoon should start locking in customers.

Or maybe I’m wrong about the whole cooking experience.

There are probably plenty of people out there that love to cook. They might enjoy cooking new and interesting dishes each week.

But are these the people Marley Spoon targets?

I don’t think so. Marley Spoon is for the person that wants convenience, the person that doesn’t want to go to the supermarket and think about the meals they need to make.

And if they’re in it for convenience, why not pay a similar amount to get something even more convenient (food delivery)?

We’ll have to wait and see how things pan out.

Bring back family dinners,

Harje Ronngard,
Editor, Money Morning

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Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read. Money Morning Australia is published by Port Phillip Publishing, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.


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