Deliveroo enters supply chain sector with ‘Food Procurement’ service
Online food delivery firm Deliveroo has launched a food procurement service that allows restaurants to purchase cooking ingredients and supplies at reduced prices via bespoke deals negotiated by the company.
The new scheme, which Deliveroo said it has been trialing for over a year, is saving restaurants over 20% on their ingredients bills, with smaller independent restaurants saving up to 40% while also improving the quality of their ingredients and produce they use.
The scheme saves restaurants money on their ingredients from vegetables to meat, as well as on cleaning supplies and packaging products.
These savings are helping restaurants to boost their profits and will help smaller restaurants to expand, bringing diversity to the high street at a time when many are facing economic challenges, Deliveroo said.
Deliveroo said this is vital support for restaurants at a time when food costs have increased by as much as 50% in the last five years and when food costs typically make up 20-40% of an average restaurant’s sales.
The support is particularly impactful for smaller restaurants who do not have the economies of scale of large restaurant groups.
Deliveroo said the new service is part of its drive to be the partner of choice for restaurants, offering more than just delivery.
A dedicated team has been established at Deliveroo’s London HQ.
The scheme sees Deliveroo negotiate the cost of ingredients and other items, leveraging its size, existing partnerships with both restaurants and suppliers and industry know-how to get lower costs.
By creating efficiency within the supply chain Deliveroo is supporting suppliers, who will be able to access more restaurants, and restaurants by reducing costs of items. The online food delivery firm said it was passionate about food and was making it a priority to help restaurants to source ingredients that are fresher, cheaper and more reliably sourced.
The company said its ‘Food Procurement’ service has already saved restaurants nearly 40% on the cost of individual ingredients, such as avocados.
Deliveroo also said it is the first food delivery platform to offer this sort of service in the UK. Several hundred restaurant partners are already using the scheme, and the company expects this number to be at 5,000 by the end of the year.
The programme will be live by the end of the year in Spain, France, UK and UAE.
Commenting Ajay Lakhwani , VP of New Business at Deliveroo, said: “Food Procurement is an exciting new service for restaurants, which will cut costs while raising the quality of ingredients.
“By using our size and scale to negotiate great prices we can both simplify the procurement process and help independents and chains can make big savings. Restaurants and their suppliers are the winners.
“And of course this is great news for customers, as restaurants cook with better quality ingredients.”
Karthik Ramakrishnan, Group Operations Manager, Banana Tree, said: 'Deliveroo's Food Procurement not only helps reduce costs, but also makes it easier to get the right ingredients at the right time.
“The scheme matches the needs of our business, and has quickly become a vital cog in our procurement operations.”
Yanni Spitadakis, Sushi Shop Group Country Manager UK said: "This has improved our whole procurement process, making it easier and cheaper to get the ingredients we need.
“With food prices on the rise, Deliveroo's Food Procurement Programme has been vital in helping us keep a lid on our overheads."
And David of Ahi Poke said: "The Food Procurement team was of great value to us, we were able to generate impactful savings whilst increasing our food quality.