While COVID-19 was a boon for the meal delivery business, office deliveries were hit hard. “When the pandemic hit we thought, ‘okay, this will just shift to the home,’” said Zak Edgington, head of corporate sales-western region at Grubhub. But that didn’t happen immediately. “We took a hit the first couple of months.”
Eventually, though, some corporations got on board. “Consultants like to be fed,” said Mark McNamee, chief administrative officer of Grant Thornton. When the pandemic forced their consultants to work from home, “they were not happy that they now had to provide their own lunch.”
After a few months, the company began offering a meal stipend to its employees. “It’s been great for morale,” said McNamee. “Through surveys, we’ve learned it’s been a really successful program.”
Edgington said several of Grubhub’s corporate clients have been using free lunches to lure employees back into the office. They work with Grubhub to offer employees a meal credit, usually $20 to $25, that only works if the meal is delivered to their office building.
Also on the stage were Ben Cattoor, CEO and founder of Foodsby, and Mark Robbins, a Salata franchisee and enthusiastic Foodsby client. Moderator Ryan Palmer, a partner at Lathrop GPM, introduced Cattoor with, “to say the last couple months have been a challenge would be an understatement.”
“Yeah, yeah it would,” replied Cattoor. His company is a catering and delivery hybrid that sells to office workers. Customers order from a selection of restaurants, and Foodsby buys the meals in bulk and delivers them to office buildings come lunchtime. Cattoor said that at the beginning of the pandemic, Foodsby’s revenue was down by 90 percent.
The company leaned up to survive office shutdowns and re-engineered its platform to enable at-home delivery, but ultimately, said Cattoor, Foodsby “is an office delivery platform.” He believes that, eventually, between 65 and 80 percent of workers will return to the office.
Foodsby’s delivery model is more efficient than Grubhub’s on-demand model and significantly less expensive. Cattoor said most meals cost less than $13, while Edgington said the average order in Grubhub’s corporate segment was between $20 and $25, in line with the company’s consumer delivery business.
Mark Robbins, a franchisee of Salata, a salad concept, said the revenue he earns from Foodsby is so consistent he can schedule around it. One of his restaurants does as many as 140 orders per day through Foodsby.
“Monday is our best day, Tuesday is a little worse, Wednesday is a little worse” and so forth, said Robbins. “I assumed people would want to go easy on Fridays,” he continued,” but it’s the opposite. I guess people really blow it out on the weekend.”
To drive sales through Foodsby, the Salata ‘zee goes straight to the customer. He and his marketing set up “lunch and learns” in office buildings to give out samples, explain their menu and explain how to order through the Foodsby app.
The Food On Demand Conference, presented by Food On Demand, Franchise Times and the Restaurant Finance Monitor, ran November 10-12 at the Bellagio in Las Vegas. Read more coverage from FODC here.
