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"robots did not write this" | spooky kitchens #23
June 17th, 2022. Restaurant inflation vs grocery inflation, Wonder's raise and...eventual...expansion, and Wendy's launches the Breakfast-verse.
Happy Friday y’all,
First thing’s first: you can also read this on the web, with slightly better aesthetics than your inbox. Just FYI.
And just a quick reminder: all green text is linked.* (*not always to anything important)
So what happened this week? (TL;DR)
DoorDash’s expanded ratings lists and reviews incentivize better pickup & delivery service.
Now fire all-star lists!
ratings & reviews may finally matter on DoorDash
“DoorDash Introduces New Features To Help Discover And Rate Local Restaurants” Stephanie Mlot, PC Mag.
With the introduction of new “All Star,” “most-liked,” and other rating-based lists (as well as actual written reviews), DoorDash has finally allowed customers to navigate by quality; and simultaneously incentivized restaurants to either step up their delivery game or otherwise gather better ratings.
Truly rare is the day that you see a restaurant with 4 stars or below on DoorDash (…that isn’t a national fast food chain). Nowadays that’s arguably because there are so many restaurants on the platform that it need only show you the cream of the crop; but the ratings have always been high. It would make sense if they’re a little skewed. More higher-rated restaurants means the selection on a given platform looks better to the consumer (“Wow, so many good restaurants on this delivery doodad!”). But until now, because most of them are so high, ratings have been of little help in making a final decision — and because they don’t matter much to the customer, they hold no weight for restaurants, either. And so the delivery meal experience, ultimately, doesn’t have to be held to as high a standard as dine-in or pickup.
(A quick aside: We know that Google reviews trend higher than Yelp, according to one paper, “driven in large part by higher ratings for chain restaurants on Google Maps,” which either points to more chain-friendly customers on Google, or easier gaming of ratings by restaurants (restaurants are not above this), or both. How delivery platform ratings stack up against those would be an interesting study (don’t look at me).)
DoorDash’s new high-rated restaurants lists and sorting may actually better-balance the app’s emphasis on quantity over quality of restaurants on its platform. Part of the draw of opening virtual brands is simply to occupy more real estate on the crowded app, primarily in those lists (“Most Popular Local Restaurants,” “Try Something New,” “Late Night Cravings”) that sit at the top of the home page of the platform (inclusion in a list is easily one of the best ways to draw more orders). But with multiple new lists dedicated to higher-rated restaurants – and customers able to check reviews and not have to just take DD’s word for it that they’re good – it now benefits restaurants markedly more to offer a quality to-go experience. Or at least, to get higher ratings.
That said, the more lists there are on DoorDash, the more diluted the benefits of inclusion on any one list. Lists draw more orders because they concentrate choices for customers that don’t want to browse endlessly (or at all). But if the user is simply browsing lists versus all restaurants, that doesn’t make the decision all that much easier for them.
In the end, these somewhat quality-based lists are just another tool for restaurants to game (or in some cases, to earn) as they vie for a coveted place at the top of the app. And while it doesn’t “fix” the mess of competition that is the marketplace, it’s a step in
the right a rightward-ish direction.
🤔 Restaurant inflation being lower than grocery inflation doesn’t necessarily make restaurants a better option. (“Study finds food inflation greater at home than restaurants” Fast Casual). A study by Mitsubishi UFJ Financial Group found that food-at-home price increases have outpaced food-away-from-home price increases, which “makes restaurants more appealing,” according to the company’s head of restaurant finance. The difference is about 4%. Frankly, this is not a great enough spread that consumers will notice, much less change their decision-making to prefer dining out more often – at least in part because restaurant inflation is marking up an already significantly more expensive option than food-at-home. Expectations, rather than raw numbers, guide most microeconomic decisions (that when added up, sway macroeconomic conditions). People expect food away from home to be more expensive than food at home, and will continue to make their decisions based on that (true) premise. If there’s a small disparity in inflation rates, in practice it is negligible, because most people will neither know about it nor change their behavior upon hearing about it. Unfortunately, restaurants, and especially ghost kitchens, should not get their hopes up about greater food-at-home inflation meaning people will keep ordering; ultimately when wallets tighten, people will still drop their night out (or takeout) before they do their grocery bags.
🔨 Panera looks to open more to-go-only locations in new local markets (“Panera opens its first digital-only restaurant” Julie Littman, Restaurant Dive). The to-go-first revolution continues its steady march of progress as Panera becomes the latest chain to launch pickup-and-delivery-only locations. Panera plans to continue bending its model to diverse formats — including drive-thru, ghost kitchens, and these to-go only outlets — to serve new localities. It’s the very latest sign that pickup and especially delivery are far, far from the afterthoughts they once were; though the oncoming recession looks to test all aspects of an already strained industry.
⚠️ Wonder raises a lot of money and some…yellow flags? (“Food delivery startup Wonder raises $350M” Julie Littman). “While Wonder’s current market reach is limited, the company plans to expand into new regions across the U.S. by 2035, according to The Wall Street Journal.” I’m sorry…by 2035? I thought that was a misquote, but I checked the original WSJ article and no, that’s the real deal. I’ve heard of playing it safe – in strategy and in media quotes – but, “We’re planning to expand to new areas sometime in the next 13 years” is playing it Area 51-level safe. Clearly there is something appealing behind the scenes at Wonder that’s drawing investors to the company that cooks meals in a van parked in front of your house; or there’s just that much trust in the combined forces of The Jet.com Guy and Gwyneth Paltrow (aka “Goopy P”). Whatever it is, it appears they have the means for their ramp to expansion…you know, eventually. Maybe. Whenever they get around to it. This company is now worth $3.5B.
🦸 What the heck is a super kitchen (“Deliveroo launches fifth F&B platform featuring 10 super kitchens in Dubai” Justin Harper, Arabian Business). It’s probably the reporter’s thrilling way of describing a single kitchen that renders multiple brands (or at least, that’s the vibe I’m getting from this piece). But it might be that this new Deliveroo site has 10 multi-kitchen buildings; which would make it easily one of their largest. That would speak to a healthy market for delivery in Dubai, and a potential (rare) Goldilocks environment for hub-type ghost kitchens to thrive.
🍳 Wendy becomes the metaverse’s Queen of Breakfast (“Wendy’s expands virtual Wendyverse with Sunrise City” Ron Ruggless, NRN). This latest playground includes an obstacle course, potato-gliding, and castle-storming… but no ordering function. There is a simultaneous free breakfast sandwich offering on the Wendy’s app that is ostensibly tied to the new meta-land, but in reality (not virtual) does not actually require a customer to visit the metaverse to get the sandwich (in fact all you need is the MyWendy’s app). This isn’t necessarily Wendy’s fault; it’s becoming clearer that Meta’s Horizon Worlds currently has limited capacity to connect with external systems in a way that facilitates direct ordering (or even earning rewards or loyalty points). What is Wendy’s’ problem is that they’ve chosen this particular meta platform to double down on. It is “the” Meta, so sometime down the road I’m sure Horizon Worlds’ functionality will include the capability to link to external systems in a way that makes it easier to attach real-world incentives to new virtual worlds, but until then Wendy’s is stuck with their fun, albeit detached cartoon playgrounds. (One does wonder if they’ve signed a meta-exclusivity agreement that prevents them from exploring other metaverses in the near term.)
☕️ About T:me has a colon in the middle of their name, and also makes coffee (“Meet About T:me, the newest coffee shop taking the automat route” Holly Petre, NRN). About T:me makes (mostly) automated coffee. The chain has 3 locations in New York, and is looking to expand. The robots make good coffee. Everyone wants the robots’ coffee. The robots did not write this . Robots can’t write. That would be silly. So silly. Ha. Ha.
(The concept is pretty neat, and not a bad use of automation for quick-and-decent to-go coffee. Worth a look.)
That’s spooky kitchens.
P.S. If you’re just jumping into ghost kitchens and want to learn more, check out my ghostly glossary and spooky kitchens ghost kitchen cheat sheet. They’re there to help make sense of this weird and wild west.