Using a delivery app to order food is the new normal. It goes to show that delivery is a crucial market for restaurants. In fact, food delivery is expected to grow more than three times faster than dine-in sales through 2023, and most of that growth will come from online orders. So what’s next in the delivery space? 

Because there’s value in knowing where the delivery market is going, we tapped industry insider Tom Kaiser to share insights on the biggest delivery trends. Tom serves as editor of Food On Demand and hosts the annual Food On Demand Conference. Read on to learn about the trends to watch out for, so you can get a jump on the delivery market. Here’s our interview with Tom.

ezCater: What are some megatrends on the horizon for delivery?

Tom Kaiser: Some trends on the horizon are ghost kitchens and virtual restaurants. We’re also seeing restaurants working with multiple delivery providers rather than with one partner exclusively.

ezCater: The first two trends that you mentioned—ghost kitchens and virtual restaurants—sometimes get mixed up, though there are differences. What’s a quick way to think about these two different models? And can you talk about why these trends are gaining steam? 

Tom Kaiser: Ghost kitchens are delivery-only locations without a dining room. These kitchens are set up in light industrial facilities and can be built in [lower-rent districts] of a city where you can easily bring delivery to densely populated areas. One of the biggest advantages of having a ghost kitchen is that the costs and stresses of running a restaurant and hiring employees are dramatically reduced.

In contrast, virtual restaurants are run from existing brick-and-mortar restaurants. Say I have a casual dining restaurant with a large dining room that does great business at breakfast, is packed at dinner, but does poorly at lunch. A virtual restaurant uses that existing restaurant and kitchen to run a delivery operation for lunch. The menu is simple, things you can crank out easily and quickly. And the economics are great because you’re not adding new real estate or staff. And you can flip it any way you like: if you’re slow at dinner or breakfast, use those times to deliver or cater.

ezCater: What about the trend of restaurants using multiple delivery partners? A lot of chains are using that strategy.

Tom Kaiser: The idea of working with multiple delivery providers got a lot of attention when McDonald’s announced it would use DoorDash as a new delivery partner, ending its exclusive partnership with Uber Eats. 

There’s also Subway, a great example of a restaurant needing multiple delivery providers. Subway has more locations than any brand on the planet, and many of them are in rural areas. So working with just one delivery partner wouldn’t cut it.

ezCater: Since we’re already on the subject, mind if we do a deeper dive into the challenges of delivery? Operators new to the delivery space aren’t always prepared for the unique demands of delivery. But a lot of new technologies have emerged to help restaurants improve their operations. Can you talk about those new developments?

Tom Kaiser: Sure. First, the growth of integration platforms, which automatically send delivery orders straight to POS systems, has become an immense industry of its own. These companies are raising capital like crazy, which will bring innovation and new services to the restaurant industry. This is really positive.

Another new development involves drones and robots. We’ve been conditioned to think such things are in the future, but the average customer doesn’t realize how much has been invested into drones and robots. Whether these technologies deliver meals straight to your door or to a community hub, such as a post office, it changes the economics. Drone-based food delivery will become a much bigger deal in the future and have huge implications for the restaurant industry as it becomes mainstream.

ezCater: Both of these technologies have popped up to solve logistical problems unique to the delivery space. But can we talk about another potential challenge for restaurants? Some people in the industry are worried that customers are reluctant to pay delivery fees—and this will slow the growth of the delivery market or lead customers to pick up their own food. 

Tom Kaiser: My own experience as a customer is this: if I’m set on delivery, I’m not getting in a car. And I’m not the only one who feels this way. But look around. There are a lot of restaurant brands that are focused on drive-thru for good reason: their drive-thru lines are often busy. Hitting up the drive-thru on your way home from somewhere is a really compelling thing. And drive-thrus remain a very important part of the business plan for many brands, even if this channel is not always lumped into the off-premises category. But pickup, takeout, and dine-in are still part of the spectrum of getting our food. 

ezCater: That’s true, Tom. All of those channels are still important for business. Thanks for sharing the trends you’re seeing in delivery. It’s been great hearing your insights.