Dive Brief:
- Waitr will rebrand to ASAP later this year to emphasize the company's involvement in delivery verticals outside of restaurants, Waitr CEO Carl Grimstad said during a presentation at the ICR 2022 Conference on Tuesday.
- Cannabis will be a key element of the company's differentiation from delivery rivals. The aggregator is poised to succeed in the cannabis payment processing market by providing a software solution capable of assisting with compliance, inventory management and payments, Grimstad said.
- Waitr recently announced its intent to acquire two cannabis dispensary POS companies, Cova and Flow Payments. Grimstad said he hopes these acquisitions will make Waitr a key player in cannabis delivery as markets open up and restrictions ease.
Dive Insight:
The cannabis market presents a good opportunity for Waitr despite fragmented regulatory permissions, Grimstad said. He compared the market to the early days of e-commerce, when companies faced significant constraints, including banks that were unwilling to work with e-commerce firms, underdeveloped technology and payment processing challenges.
"We... continue to see those similarities in the cannabis vertical. So think of it just like any other retail environment, right? You need a payment solution," Grimstad said.
Grimstad predicts that the federal government is likely to legalize the sale of marijuana in the future, and that cannabis payments and delivery will then be commoditized.
"But what will [also] be commoditized is the software...the software will be the foundation of our solution within the cannabis space," he said.
Waitr's focus on payments software and delivery verticals, including cannabis and convenience store products, will allow the company to grow without competing head-to-head with Doordash, Uber Eats and Grubhub, Grimstad said.
"We are going to have to be more than just the fourth player in food delivery in the U.S.," Grimstad said. "We had to change the narrative."
Waitr's restaurant business is still growing. The company adds 1,000 new restaurants a month, with a focus primarily on independent restaurants, Grimstad said. During Waitr's Q2 earnings call, Grimstad said the company was partnering with brands like Applebee's and KFC so that it doesn't lose delivery customers to its larger competitors, which work closely with major chains.
But while Uber Eats and DoorDash have worked to diversify the delivery channel by experimenting with proprietary ghost kitchen offerings and virtual brands, Waitr will remain focused on just providing delivery services and payment processing software to partner restaurants.
"Our whole pitch is we're not going to open ghost kitchens," Grimstad said. "We're not going to open our own pizza or chicken wings business. We're going to be your solution, Mr. Merchant... it has to be really more of a merchant services solution rather than just food delivery."
Grimstad predicted the major delivery firms would eventually expand into restaurant operations, while adding other verticals, powered by the data they collect from their restaurant clients and retailers.
"Whether you're a big restaurant, services operator, or some other big retailer at the end of the day, they're giving their customers and their customers data to a third-party every day. Right? And ultimately, what do you think's going to happen?" Grimstad asked. "The guys are way too smart at the Doordashes and the Ubers of the world to lose money delivering prepared foods forever."
