Amazon Sharpens Its Focus on Food Delivery Featured

Oct 24 2018 1 comment
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Amazon, without doubt, has been broadening the reach of the world's most advanced logistics platform and is now sharpening its focus on food. Food management (production, packaging, service, delivery, etc) is however a very complex business and Amazon's recent closure of its restaurant delivery service in the UK is very likely to be a full acknowledgement of this. 

Why close up shop now? In a burgeoning market where nearly 20% of the population regularly order delivered meals, why quietly shut down your operation? Because, I would suggest, they know something is amiss. If you plan on delivering fresh food product to people’s homes, you need to have systems in place that allow you to maintain its quality throughout its journey. You must be able to deliver a product that is safe to eat. Food operations at scale must involve little or nor risk.

Amazon’s judgement, having taken a cold, hard look at the operations of Deliveroo and Just Eat, may very well be that the necessary alignment of systems to deliver a safe food product, does not currently exist. For Amazon and for companies seeking to benefit from the creation of markets where food delivery has become ubiquitous, this ‘judgement’, could have profound consequences. The implication is, of course, not only that the systems that allow food to be safely transported, still need to be built but that the risk level with delivered food product currently is too high, even for commercial reasons. People need to know that the quality of their food can be assured. They need to know that the food that is delivered is safe to eat..

How has this come about? How have our food delivery systems come to fail in such spectacular ways? Why is it that food ordered through an aggregator site like Just Eat can lack basic information on the true nature of the product? Why is it that something so simple as an accurate list of ingredients does not travel with the product. Why is it we have come to know so little about the food that is delivered directly to our door?

The health and safety systems, the checks and provision of basic information on food items and ingredients that restaurants are required to maintain and customers can access, seems to be completely absent when the delivery driver arrives at your front door. How has this come to be? 

Most Food Delivery Service Providers have pursued a winner takes all strategy that has led them to treat food delivery as a simple sales-logistics event (advertise, take payment, manage delivery). Food, if it is to be delivered fresh, safe and good, requires however much more than this...

The secret, one which Amazon may well be thinking through, is to begin at the end. If you begin your journey by reflecting on the needs of the consumer, you will quickly recognise that most Food Management and Food Delivery Systems are pointedly designed around the needs of manufacturers, producers, retailers and delivery providers. They do very little to answer the real needs of consumers.

What do Food Delivery Services currently provide?

To see this clearly, all we need do is look at the way Food Delivery Service Providers currently manage food delivery and the information they garner from consumers. If, for instance, you've ordered a meal delivery through the likes of Deliveroo or Just Eat, you will find that very little information about the product ever reaches you.  Should you wish to know something more than what you've paid for the item or where you ordered it from, you would need to retrace your steps online and scrutinise the menu's detail. This appears odd to say the least.  Contrast this with what would normally happen in a business to business commercial food delivery transaction. When one commercial food company is delivering to another, the information normally travels with the product in the form a receipt (now often digital). The information about the product is ready to hand and can be checked at any time. A commercial agent will know where the food product came from, when it was made, what it is packaged in, what its shelf life is and under what conditions it should be stored. They will also have full access to ingredient and nutritional data. Interestingly, this information is currently not available on the platforms of Delivery Service Providers although, following a number of high-profile deaths, they are beginning to make ingredients and allergen information available.. 

To understand why this is, we need to focus on the interests of the various parties involved. For instance, what are the interests of the Food Delivery Service Providers? They will want to 'own' and manage consumer data, i.e., the order data which will include data on who, where, when, etc. They will also want to manage all logistic data regarding the delivery. They will not be too interested in food item data, like ingredients, etc. They tend to view their businesses as pure logistics operations. Any questions about the nature of the product being delivered will be redirected to the restaurant or retail unit from which it was ordered.  

What about the interests of the food producers (Restaurants, Retail Outlets, etc)? What are their interests? 

It is well known that most restaurants in the UK, with the exception of some of the larger chains, have either very limited or no food management systems to help them manage their food production and food delivery processes........

Most use simple tools for managing stock, production and delivery orders with plenty of opportunity for manual error. Needless to say, most of these establishments lack the type of Food Management Systems that would allow their food operations and products to be vetted for safety.  This partially explains why Food Delivery Platforms currently provide very little information on the meals they deliver.

The technology and integration that would allow Delivery Platforms to provide accurate product information (ingredients, allergen, shelf-life) to consumers exists today. Why the reluctance to adopt or develop these enhancements to their systems? Two reasons: firstly, the more integrated their systems are into the operations of restaurants, the greater the danger that they could be held liable for deficiencies, and secondly, they cannot endanger their principle focus..growth. Looking carefully at the processes and systems of food operations often exposes the need for careful management for improvement?

For Delivery Companies to be able to provide the type of information that their customers require and do so confidently, they will need to integrate their Logistics Platforms with Food Management Systems (Stock Management, Recipe Management, Production, etc) and make these readily available to the restaurants they invite onto their platform. The technology for these systems is advancing quickly and there are a number of highly innovative companies developing fully fledged delivery platforms that do this.

With thousands of small restaurants now relying upon Delivery Platforms to enlarge and sustain their businesses, it would seem to make sense, both for commercial and public health reasons, that the requirements of their systems be rethought

Food Delivery Platforms must begin to see their services as much more than logistics services. It is very odd to find the same processes (non-food item delivery) being used by several very large companies for the delivery of food product. Surely Food Delivery Platforms have been designed and built to manage the safe delivery of food product? If not, why is this?

The answer can be found by looking carefully at the hand-over stage. i.e., after the order has been placed and the product made ready for delivery, it is usually collected by a delivery driver who then delivers it to the consumer. During this last stage (collection of product followed by delivery), the liability for the 'nature' of the product, continues to rest with the food producer (restaurant). This is precisely the problem, for how, one might ask, can the producer be fully responsible for the product when they no longer have control over how or when it is being transported?

The way in which a food item is transported is fundamental to its safety. A breach in the packaging, a change of delivery time or a change in temperature can quickly lead to an unsafe food product. There are of course other risks, such as the wrong product being delivered or a product being tampered with. How would you know, for instance, if you've received a slight variation to the product you ordered. Perhaps it contains an allergen that you would not welcome. Correct labelling and traceability are also very important for the safe management of food production and food delivery, yet the current systems that Food Delivery Providers use are neither robust nor nuanced enough to allow for either.

What can be done to improve the safety of delivered food product and how can Delivery Platforms address these issues?

Without the liability for the 'nature' of the food product being shared between Food Producers (Restaurant, Retail, etc) and Food Delivery Platforms (Deliveroo, Just Eat, Uber Eat ,ect) it is likely that Delivery Providers will continue to treat food delivery as a simple sales-logistics event. We have seen this in looking at what happens during the hand-over stage between Delivery Provider and Consumer. Currently, only the minimum of information is available to the consumer. It is clear that this arrangement does not benefit consumers and it certainly does not serve their needs. Consumers want and deserve much more. 

What does the consumer want in relation to Food Delivery Services? They surely want to know that the food product they've ordered is fresh, safe and good. What kind of a food management system is needed? What kind of food delivery system would this require?

There are a number of new start-ups looking carefully at this question. For many, the first principle they adopt is that of transparency of information for the consumer. The Operations Director at foodonthemove.today, believes that "we will need to create a new kind of Food Management System, one that is designed from the ground up and one that will succeed only if it provides the consumer with a true God's eye view on their food."

He continues, "for a consumer to know that a food product is fresh, safe and good, we will need a Food Management System that can access as much information about the current food product as possible (origin of ingredients, date/time of production, shelf-life, packaging, transportation requirements, temperature, etc) and be capable of securely collecting all relevant product information (raw ingredients, etc) along the full supply chain (suppliers, restaurants, delivery team, etc). The Food Management System would also need to provide or link up with a system or systems that help the consumer interpret and act on that data. Thankfully, new innovations and technologies like blockchain that will make this possible are being adapted and made available along with other requirements of the system."

What is being proposed is a Food Management System that integrates three key areas: knowledge of origin (raw ingredients, materials), knowledge of production (how and when it was made, etc) and knowledge of collection (delivery, etc). This might require the interlinking of current systems (Supply, Production, Delivery) or it might lead to the creation of an entirely new system with additional capability oriented towards consumer needs and wants. What, for instance, would a Food Management System look like if it were able to provide an answer to some or any of the following questions:

1.) When was the product made?

2.) How 'fresh' are the ingredients?

2.) By when must the product be consumed?

3.) Is it safe to reheat this product?

4.) Can I put the product in a microwave?

5.) Is the packaging suitable for this product?

6.) Is the packaging recyclable?

7.) What do I do if something is wrong with the product? Whom do I notify?

8.) What is the carbon footprint of this product?

Then, there is also another whole range of questions which can only be answered through an integrated system such as that described above:

1.) If I order this product (and eat it), how much of my daily salt allowance have I had?

2.) How many times have I ordered this product?

3.) How often has the product been delivered late?

4.) Have I been unhappy with this product before? How have I previously rated it?

5.) How much am I paying for this product? Is this an above the average price for a product of this type?

6.) Is the product truly 'organic' and what are its credentials?

7.) What is the company's labour record? Are there issues with its employment history?

8.) Are there any alerts relating to this product or the ingredients of this product that I should be aware of? 

9.) Am I recycling the packaging? Where does it go? What is the company's record on recycling?

They are, after all, paying for the food product and will base their future buying decisions on what they have come to know about the product and their experience of it. They could also (and this is at the heart of the work of the foodonthemove.today base their buying decisions on the availability of relevant and easily interpretable information. In the near future, it could very well happen that if a company chooses not to provide this information, customers look elsewhere and actively choose to purchase from companies that do.

Information that is actionable is increasingly being sought by consumers who no longer base their decisions merely on price..

At the moment, nothing like the above capability exists. Foodservice professionals from organisations like foodonthemove.today, are looking to change this. With the number of complaints about the quality and safety of delivered product increasing daily and heightened concern about the security of the food supply chain, the much needed innovation in the Food Delivery Service may well be underway.

If you would like to know more about the foodonthemove.today, or would like to be involved in the development of alternative food delivery platforms, please contact us.

 
Read 980 times Last modified on Feb 26 2019

Founding Director of the Foodservice Network

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Rated 5 out of 5 based on 1 voters
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Remarkable insight! Not quite sure that this is what we are thinking about..very likely we ought to be!

Richard Bergen
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