People assume that the recent global health crisis created the boom in online food ordering. However, in 2019 companies like Meituan-Dianping , a Chinese shopping platform, recorded record-breaking profits totaling $400 million. More than half of the platform’s profits came from online food ordering.
In the United States, online food ordering had a total market size of $22 billion that same year. Experts expect it to reach over $32.3 billion by 2024 (see chart below). This new food trend continues to increase in popularity as innovations in technology drive further advancements making food delivery a faster, more streamlined process.
Let’s take a deep dive into this new food trend to discuss the three primary types of online food services, how food producers drive a more connected food ecosystem, and some online food ordering statistics that might surprise you.
- There are three primary types of online food ordering and delivery services: order out, meal kits, and grocery delivery.
- About 31% of consumers admit to using food delivery services two or more times a week.
- Food producers drive a more connected food ecosystem by connecting food service establishments with locally sourced foods.
- Digitization and AgTech also drive this latest trend by providing a more sustainable food supply chain.
Types of Food Delivery Services
There are three primary food delivery services customers use when ordering food online:
- Order Out delivery (i.e., UberEats, DoorDash, etc.)
- Meal kit delivery (i.e., HelloFresh, Blue Apron, etc.)
- Grocery delivery
Online grocery ordering has been around since 1989 when Peapod LLC launched its pioneer delivery service. Online take-out ordering began in 1994 when Pizza Hut delivered hot pizza to your front door. Today, consumers can order their favorite food from the Mom and Pop restaurant down the street from their house and have a handful of food delivery services bring them their online food orders.
All that local diner owner needs are a website and a relationship with a delivery service like DoorDash, GrubHub, UberEats, or PostMates. These online food-ordering apps have been around since the mid-2000s. However, over the last decade, you have probably noticed the rapid increase of online food ordering apps available for desktops and mobile devices.
Online Food Ordering Statistics
Savvy food brands, grocers, and food service establishments pay close attention to how American eating habits evolve. With the rise in online food ordering over the last ten years, they are paying close attention to the following statistics:
- At least 80% of Americans have ordered food online. (Zippia)
- Approximately 31% of consumers admit to using food delivery services two or more times a week. (Toast Tab)
- China is the largest market for online food ordering, with a market size of over $27 billion in 2021. (Business of Apps)
- Over 34% of those ordering food online spend between $25 to $50 per order. (Upserve)
- Nearly 20% of consumers spend more money on drive-thrus, take-out, and delivery orders versus dine-in. (Upserve)
- Between 2019 and 2020, U.S. online food ordering revenue increased by 17%. (Statista)
- Since 2014, online food ordering has increased 300% quicker than dine-in establishments. They account for around 40% of total restaurant sales. (Webstaurant Store)
How Producers Drive a More Connected Food Ecosystem
As consumers grow increasingly aware of where their food comes from and how those in the food supply chain industry produce that food, producers continue to explore options to improve profitability. They also work to better utilize their assets, such as altering the kind of crops cultivated or integrating technology to handle animal health and wellness.
Opportunities exist throughout the value chain for businesses to improve resiliency and embrace agility while remaining planet-friendly and consumer-centric in the connected ecosystem. Food producers leverage a more connected ecosystem and embrace emerging technologies and market disruptors. They do this by considering the following trends:
Creating Economic Sustainability
As farmers focus on uprooting established operating strategies for more sustainable farming practices, shifts in consumer preferences present both opportunities and challenges. One practice is the use of regenerative agriculture in food supply chains. While it poses a risk to profits within the value chain, it works to ensure food shortages do not impede the ability of food service establishments to meet the demands of online food orders, along with other businesses.
Connections to More Local Sources
Producers work to establish a more sustainable food supply chain by connecting with more local sources versus exporting their products. It requires some changes in eating habits. For example, seasonal agriculture will mean that certain foods will not be available year-round because the climate in the region is too harsh.
Some foods will be scarce or unavailable completely. However, these farming practices are more sustainable and mean that grocery stores will be able to offer special items for online food orders. While less cost-effective now, future technology will even make it possible for people to get foods drop-shipped directly from farmers for foods not locally sourced.
Digitization and AgTech for the Supply Chain
Digitization includes applications for all-in-one online food ordering and delivery management systems for cafés, restaurants, and other food service establishments. These programs allow them to track food service orders, business data, and KPIs. These tools also ensure that food brands have the supplies they need to make their products.
AgTech – technology designed to innovate the agriculture industry – drives online food ordering trends by providing sustainable food supplies using environmentally responsible farming practices. Together, these technologies make it possible for food brands to manufacture the products their customers love. They also create a more sustainable food supply.
See the Driving Trends in Online Food Ordering at the Next SIAL America Show
Online food ordering is here to stay. Innovations will continue to drive its popularity and adoption as more food brands participate in this growing trend. At SIAL America, we connect food producers, brands, and food service experts in one place to discuss the latest trends and innovations and showcase what makes them better than their competition.