Third-Party Food Delivery Market Poised for Explosive Growth

Staff Report

Friday, March 2nd, 2018

The $13 billion third-party food delivery market is projected to grow at a 13.5 percent annual rate, according to a recently published report from Pentallect Inc., a leading food industry strategy firm. The market, which consists of firms providing restaurant meals and groceries, is expected to be $24.5 billion by 2022. Pentallect notes that the $1.6 trillion U.S. food industry is only growing at 3.0 percent per year.

Pentallect's research reveals that in the past 30 days, 13 percent of consumers have used a third-party restaurant meal delivery service and six percent a grocery delivery service. Bob Goldin, a Pentallect partner, says that "food delivery services fulfill an important need for a growing number of consumers, who are increasingly aware of the options available to them." Goldin cites limited consumer familiarity with the specific delivery services as the biggest current barrier to growth.

Barry Friends of Pentallect believes that third-party food delivery services are evolving and disrupting the traditional food supply chain. "By most measures, the business is in its infancy. Current providers and new entrants are dramatically enhancing their capabilities, improving their overall value, and becoming increasingly attractive to consumers," says Friends, who expects food providers of all types to offer "more and better" delivery options. Friends adds, "We will most certainly see a marked shift away from brick-and-mortar in the food industry, and that will present challenges to many traditional restaurants and food stores."