Specialty Food Magazine

Winter 2019

Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.

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Dave Donnan is a senior partner with A.T. Kearney, a global man- agement consulting firm based in Chicago. During his career, Donnan has managed operating companies, run food plants, and consulted to leading global retail and consumer product companies in technology and supply chain strategies, brand growth, and positioning. He currently works with food startups in the Chicago area as a mentor. Donnan actively speaks and writes on topics of importance to the agriculture, food and beverage, retail, and res- taurant industries. PHOTO: DAVE DONNAN New companies entering the market are redefining the boundaries between eat at home and eat away from home. More than 150 meal-kit companies operate in the U.S. today, many of them startups with little foodservice experience. These companies rely on on-demand delivery services and varied menu options but have not cracked the formula for profitability. Expect to see massive industry consolidation as meal delivery services must balance the costs of labor and transport with the convenience of multiple menu options, delivery quality, and competition from supermarkets. So, for the rest of the food industry: Who will benefit from the increase in home delivery and what should you do? Restaurants. The growth of meal delivery is a net benefit for res- taurants, but it requires a redesign of restaurant operating models to focus on kitchen efficiency and reduced walk-in traffic. Some menu options are more suited to delivery than plate service, and restaurant owners will have to find the optimal balance of culinary choice, qual- ity and meal prep, and delivery efficiency. Supermarkets. Meal kits are now migrating to the grocery shelf as consumers become weary of subscription models and see the benefit of retail menu choice, freshness, and decreased packaging. Continued growth in online orders and home delivery will impact the operating costs of retailers as less foot traffic and increased deliv- ery will affect margins. Retailers with commercial kitchens should consider becoming virtual restaurants for meal delivery services. Food Manufacturers. Packaged food producers will be hard- est hit if their products do not fit the prepared food delivery model. The competition for packaged food producers will be more conve- nient restaurant takeout and supermarket prepared food offerings. Branded meal kits or prepared food options are potential entry points for food manufactures. Expect further innovations in the meal delivery market with the eventual advent of driverless autos, new heat and temperature- controlled packaging, and personalization of menus and ingredients for specific diets. Lots of opportunities will exist but anticipate massive changes in traditional packaged food and retail operating environments. Packaged food producers will be hardest hit if their products do not fit the prepared food delivery model. Dave Donnan will moderate a Buyer Panel at the Winter Fancy Food Show on Monday, January 14 called What's for Dinner: Fighting for the 6 p.m. Mindshare. Panelists include: Bowie Cheung, Uber Eats; Matt Fitzgerald, HelloFresh; and Evelyn Miliate, Raley's. Lots of opportunities will exist, but anticipate massive changes in traditional packaged food and retail operating environments. 90 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com opinion

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