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Risk in Context

Food Delivery – Disrupting the future

Posted by David Tate 13 August 2019

The rapid rise of online food and meal delivery by retailers, restaurants, and producers was borne out of a desire to improve the customer experience. These new models are now moving at a pace, and new solutions and partnerships are creating disruptive business opportunities.

The 'dark kitchen' sector is already a major player in the market while supermarkets are partnering with delivery apps to deliver takeaways, ready meals, and some food staples. Technology innovation is also advancing in this competitive sector as robot chefs are being developed to automate fast food preparation and cooking; delivery drones are in the testing phase; and vertical farming is set to revolutionise the speed with which fresh food is delivered.

Virtual or 'dark kitchens' are fully equipped commercial micro-manufacturing kitchens — similar to what you would find attached to a restaurant, except there is no restaurant or takeaway counter to service. These kitchens are dedicated exclusively to meeting the growing demand for online meal delivery, through the use of delivery apps with some players utilising robots to automate the assembly of ready-to-eat meals.

With consumers increasingly demanding the goods they want in a quick and easy way, established grocery retailers, food manufacturers, and restaurants are partnering with food technology logistics businesses to widen access to their products.

The delivery of meals or ingredients will bring hidden risks as consumers demand quick and bespoke meals. This will prompt providers to utilise a vast variety of food stuffs, new technologies, virtual brands, and new partnerships, bringing unseen risks throughout the supply chain.

The Blurring of Lines and Hidden Risks

A future of highly automated food preparation and delivery will require an appreciation of new risks as we will see the blurring of lines between food manufacture, preparation, retail, and restaurant. The focus in the future will be on intangible risks, cyber, non-damage business interruption and revenue and brand protection. This is due to the increasing use of technology from ordering apps, to robotics and AI in manufacture, and automated delivery.

Established players may look to outsource the operations of dark kitchens with third parties providing the facilities, delivery drivers, and centralised services, including cleaning and site management. With restaurants, grocery retailers and food manufacturers providing the chefs, ingredients and recipes: Where will the contamination and product risk lie? Shared fridges and food storage areas, combined with staff from other brands working in the same area, and employees from the delivery app and delivery drivers, will complicate the risk landscape.

Protecting brand, revenue, and operations will prove a thorny matter. Complicated supply chains, with multiple actors and combined processes will create new food safety, product, technology, and contractual risks, which need to be identified, assessed, and managed.

David Tate

Retail, Food & Beverage Practice Leader, UK & Ireland