Deliveroo will now buy and deliver ingredients to restaurants

Dive Brief:

Deliveroo offers restaurants the ability to buy ingredients and supplies through its new Food Procurement division as part of the U.K.-based third-party delivery company's plan to become a one-stop-shop for restaurants, according to The National.
The company claims that restaurants will be able to save over 20% in ingredients while smaller outlets could save as much as 40% since the company will buy produce on behalf of a number of restaurants at the same time increasing purchasing power with suppliers.
The program underwent a year-long trial in the U.K. and is expected to be available to all U.K. restaurants this summer.

Dive Insight:

Deliveroo has been doing a lot lately to not just appeal to restaurants, but also drivers and consumers. In the highly competitive delivery market in the U.K., differentiation is quickly becoming a key indicator on the future success of delivery operators. In June, the company launched a makeover contest where three restaurants would receive over $31,500 to help partners capture more revenue. It also is rolling out a click-and-collect option by the end of the year, which typically allows restaurants to offer off-premise without having to pay hefty delivery fees.

Offering ways for restaurant partners to save money can make a partnership with a delivery provider more worthwhile, especially since restaurants are already struggling with high labor and rising food costs. Food prices in the U.K. have been rising sharply, reaching a six-year high in March as the country grapples with Brexit.

Deliveroo's newest program also could provide some additional strategies for U.S. third-party delivery providers, who have undergone intense scrutiny of late. Having a program available that can save restaurants money could be one way to appease some operators, who have felt squeezed by fees and commissions.

An ever growing trend among considers to eat fresh, local ingredients also has many operators, especially farm-to-table operators in the U.S., eyeing higher menu prices to make up for the food cost. A program such as Deliveroo's could be a win-win for U.S diners and restaurants, especially if it would lead to charging lower menu prices while still getting the same fresh ingredients.