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Tuesday, March 19, 2024
March 19, 2024

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Food-delivery startups are fattening up on technology

'Everybody eats,' even those too busy to shop, or who can't, won't cook

The Columbian
Published:

Cassandra Santana rarely has time to shop for food, let alone cook it.

The Venice, Calif., social-media manager gets groceries delivered weekly to her house. She also orders regularly from trendy restaurants such as Gjelina for delivery to her home or workplace.

“Just a year ago, I would be running to the grocery store, and I hate going to the grocery store,” said Santana, 28. “Now I have all the food options in the world at my fingertips.”

Technology entrepreneurs have revolutionized how people shop for clothing, find vacation rentals and flag down taxis. Now they’re shaking up the world of eating.

Whole Foods Market Inc. is partnering with startup Instacart to deliver groceries to shoppers’ doorsteps, and tech behemoths Amazon.com Inc. and Google Inc. are also testing delivery services.

A new crop of startups is popping up that carry piping-hot meals to homes or offices from fancy restaurants that normally don’t deliver. Some will deliver sliced ingredients for a gourmet meal to your doorstep. Others are aggregating local chefs in an easy-to-search website to cook for your next dinner party.

Helping drive this golden period in food innovation: busy Americans who have less time to cook and are keener than ever to boast on Instagram about their delicious meals. Many new companies cater to affluent shoppers working around food allergies or on trendy diets that ban entire food groups.

Investors are jumping into the food space. GrubHub Inc., the owner of delivery service Seamless, raised $192 million in an initial public offering this year. Mobile payment firm Square recently snapped up restaurant delivery startup Caviar.

Nearly $4 billion was invested in food-related tech companies in the first half of 2014, more than double the $1.6 billion invested all of last year, according to food consulting firm Rosenheim Advisors. Investments in 2013 were up 33 percent over the year before.

“There is definitely a lot more money pouring into food,” said Brita Rosenheim of Rosenheim Advisors. “Everybody eats — if there isn’t a bigger market opportunity than that, I don’t know what it is.”

Startups and investors alike are quick to point out that smartphones — and the up-to-the-second data they provide — are a crucial tool separating food innovators today from ancestors such as Webvan and Kozmo, which crashed with the dot.com bubble of the early 2000s.

Despite carrying around “scar tissue” from backing Webvan, a delivery service that failed in 2001, Sequoia still sees opportunities in the intersection of food and tech, Lin said.

“Food is still one of the biggest expenses in any person’s budget after maybe rent,” he said. “There is room to make money when you are smart.”

Young professionals

Many fans of modern food startups are professionals in their 20s and 30s groomed by the Food Network and farm-to-table movement to love fresh, wholesome food. But they have little time or desire to learn how to cook, especially from scratch.

Companies such as Blue Apron, HelloFresh and Plated deliver meal kits that have ingredients pre-measured and ready for the frying pan. Forage, a startup that launched in August, provides all the makings for re-creating a meal from popular restaurants such as Hapa Ramen and Alta in San Francisco.

Daniel Finley is a fan of Kitchensurfing, a company that serves as an online marketplace for chefs.

Kitchensurfing’s website gathers chefs willing to hire out their services for a few hours at a private home or event, and lists their suggested prices and sample menus.

The 33-year-old lawyer threw two dinner parties this summer using Kitchensurfing chefs. The first served Italian cuisine, and the second dished up New American fare. Costs came out to $70 to $80 a head for a five-course meal: cheaper, Finley said, than at a restaurant.

The Hollywood resident said he loves food — but not cooking. “I didn’t have the skills to do it, and I didn’t have faith that a traditional catering company could offer something compelling,” he said. “Both times, it was as good as a restaurant, if not better.”

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