More than a year after the outbreak, these changes have taken place in our basic necessities of clothing, food, housing and transportation: the demand for takeout has soared, and the food industry has changed dramatically


Figure: takeout demand surged during the outbreak
Since the beginning of last year, the sudden outbreak has taught the world more than just the importance of hand washing and disinfection. The outbreak of the novel coronavirus pneumonia has caused many industries to get into trouble quickly. In order to stop the spread of the epidemic, many restaurants, bars and grocery stores have been forced to close down, and their businesses have shifted to applications.
In April 2020, the global Google search volume for “takeaway” and “local video” hit a record high; in the UK, people are six times more likely to search for “packaged vegetables” than a year ago. As the world begins to plan for the future of the post epidemic era, food retailers and manufacturers are increasingly seeking technological innovation in order to thrive in this ever-changing environment.
Sudden change
In the past few years, although the delivery service around the world has become more and more popular, the overall growth has been tepid. However, with the epidemic sweeping the world, traditional leisure places have been forced to close regularly, and the number of bars, restaurants and even supermarkets providing food distribution services has increased significantly.
The epidemic objectively expanded the acceptance rate of food distribution services. In the post epidemic era, these take away apps will undoubtedly continue to play a huge role in the recovery of the food industry.
Like most Americans, Steve rainwater has never used an online shopping service before last year. Now that COVID-19 is coming, he and his family are ordering food through Instacart and full food supermarket.
“If all of these services are sustainable, I believe I can go on like this all the time,” reinwater said recently. He is a software developer in his 50s and lives in Irvine, outside Dallas, Texas.
It’s not just renwater who’s doing this. Because of the epidemic, many people dare not go to local supermarkets or convenience stores, let alone restaurants and bars, and can only stay at home. Millions of people across the United States rely on online meal package providers such as blue apron or turn to ordering services such as Peapod and FreshDirect for food.
Many takeout services and food ordering companies have been attracting consumers to buy more food online for many years. Sudden lifestyle changes have brought a large number of new orders and new users to these companies. However, more and more attention has also brought painful new problems to the company, such as the shortage of goods and the dissatisfaction of customers and employees. Both instacart and whole foods employees held major demonstrations last year to protest against unsafe working conditions during the outbreak.
Ordinary people’s choice
“It’s their moment, but they can’t cope,” Manhattan resident John Trammell said of the food ordering company, which has been using online grocer FreshDirect since early 2012.
The U.S. grocery market is worth $1.2 trillion. As a large part of its business moves from supermarkets to the telephone and Internet, many people may completely change the way they buy food after the epidemic crisis. This gives shoppers fewer reasons to leave home to buy, undermining offline entities and strengthening already large grocery retailers such as Amazon and Wal Mart. Smaller food ordering companies such as hello fresh and sun basket are likely to transform into much larger ones.
But if online grocers continue to stumble and fail to protect their employees, customers are likely not to stick with them, but to rush back to their old habits when it’s safe outside.
David Glick, a former Amazon executive and chief technology officer of flex, a logistics company, is skeptical of long-term growth in the online food industry. He said the industry has been very difficult and the epidemic will not change that because of the low profit margin and high delivery costs. He added that people still want to choose their own food, such as agricultural products.
With millennials and younger shoppers going online, the entire food industry is already undergoing tremendous changes, but at a slow pace. Grick said that while the trend will continue, the epidemic is unlikely to change most people’s shopping habits.
“Ordering groceries online is a tough business, and the hardest part is that customers don’t have to,” Glick said
A surge in demand
Before the outbreak, online food had a small market share in the U.S. food market, even though food ordering services such as FreshDirect had existed for 20 years. Coon said in February 2019 that these services accounted for only 3% of its grocery expenses. Gallup said in August 2019 that 81% of Americans had never used these services.
Now there are more and more customers for these services, and many companies are trying to keep up with the demand. Shoppers find that goods like bread and eggs are out of stock. Want to rush to buy hot food even until midnight, the site will occasionally crash.
Almost overnight, these companies changed from providing a service that most Americans do not want to use to providing people with much-needed services, especially for the elderly who are more vulnerable to the virus.
“As more and more people stay at home, our demand is growing unprecedentedly, with both increased orders from existing subscribers and new customers registering,” Vanessa Meyers, senior vice president for growth at Sun basketball, said in an e-mail interview.
Image: the automated warehouse of FreshDirect, a food order service company
Meyers said her San Francisco company is recruiting 150 new employees to meet demand. Sun basketball has also worked with other food companies that were unable to open their doors during the outbreak to provide jobs for unemployed employees at home.

Instacart said last year that it was working to double the number of contract workers and add 300000 in three months. The company has said orders on its platform grew 150 per cent in the last few weeks from a year earlier.
Amazon, the operator of grocery distribution services such as Amazon fresh and whole foods, last year recruited 100000 U.S. employees to increase its distribution capacity. Wal Mart, the largest U.S. grocer, announced last year that it would hire 150000 employees. Kroger also employs nearly 45000 people.
Bob Brannigan, co-founder and CEO of San Diego based mercato, which provides an online delivery platform for third-party grocers, says his company signs up to 20 new stores every day. Online sales at some of the stores soared to $50000 in one day, compared with $2000 in the good days of the past.
“If they don’t order online, it’s going to be very difficult to pay the bill,” brenegan said He said that under the crisis caused by the epidemic, many grocers found that online ordering accounted for 80% of their business. “Online food stores have established themselves. I think after the epidemic, its market share may be two to three times that of today. ”
Both brenegan and Meyers have confirmed that some foods are out of stock, but they say grocers are working with suppliers to replenish food quickly without worrying about the overall shortage. Brenegan also said that agricultural products that should have been bought by restaurants are now bought by grocery stores.
The outlet of the restaurant
In the epidemic, many restaurants have also achieved success by using convenient meal delivery applications, which redefines the concept of “restaurant”. Restaurants that eat in can now operate like fast food vans or take out only shops.
Zachary Davis, the boss of glass jar, a Santa Cruz, Calif., food and beverage company, said he deliberately avoided using the meal delivery app before the outbreak because the cost of the business seemed too high.
But when his county issued an order to take refuge on the spot, “we’re actually closed.” But a few days later, we took stock and realized that it was the only way to keep the business going. ”
Davis is not alone. As more and more people order takeout and groceries during the outbreak, takeout applications are becoming increasingly important to business owners and their customers. Doordash’s IPO filing last year and earnings reports from companies such as Uber have highlighted the take away business in 2020. Obviously, the epidemic has brought great impetus to the takeout industry.
From April to September, the total revenue of doordash, Uber, grubhub and postmates was about $5.5 billion, more than double the total revenue of $2.5 billion in the same period last year.
It’s not clear how long the surge will last, or what it means for the financial performance of takeaway in the long run. Although the takeout business of these companies is booming, the cost is still too high to achieve sustainable profitability. Stakeholders such as restaurants, takeaways and city managers are either demanding to limit the fees that these companies can charge or to get a bigger share of their revenues.
In the short term, many restaurants have no choice but to use these takeaway apps. According to a survey of 2500 consumers conducted by Cowen, 52% of consumers said in July last year that they would deliberately avoid restaurants and bars even after they were fully opened. The aggravation and spread of the epidemic situation in the United States means that many restaurants are once again facing restrictions on eating in restaurants. According to OpenTable, a restaurant reservation platform, the average number of diners arriving in the U.S. fell 52% in the week from November 19 to 23.
MKM partners analysts reported: “the catering industry is entering a terrible winter. They have no lifeline other than the take away platform.”
This could benefit doordash. Doordash is the U.S. take away industry leader with 50% market share, while the second largest company is the merger of Uber eats and postmates, followed by grubhub. In the first nine months of this year, platform orders totaled 543 million, triple from 181 million in the same period last year, doordash said in its prospectus.
Dara khosrowshahi, Uber’s chief executive, is so optimistic about the takeout business that he compared Uber eats, the company’s takeout business, to “another Uber” in the company’s second quarter earnings conference call last year, and stressed that the completion of the company’s takeout business basically “took less than three years”. In the first quarter of last year, Uber eats generated more revenue than taxis for the first time.
In the third quarter, Uber’s takeout business continued to grow: Uber eats’s bookings grew 135% year-on-year, and its revenue soared 125% to $1.45 billion. Uber’s acquisition of postmates is expected to effectively boost its takeout business.
Chicago based grubhub’s take away business has also grown, and it is being acquired by just east takeaway, a European take away company. Grubhub said the platform had 30 million active users in the third quarter of last year, up 41% from a year earlier, and revenue was $493.9 million, up 53% from a year earlier.
In addition to the take away business, Uber and doordash have also increased their distribution efforts in many areas, and the competition with Amazon and other companies providing distribution services is becoming increasingly fierce. Before last year’s holiday shopping season, doordash also launched a service for customers to give gifts to others.

The companies are also competing with instacart, another grocery ordering service. Doordash launched dashmart to enter the grocery distribution business; it has become the official distribution application of NBA and attracted more grocery store partners. Due to growing consumer demand, Uber launched a distribution service covering more grocery stores in the second quarter of last year.
It’s not easy to make a profit
It remains to be seen whether user needs and new products and services can be converted into profits. Almost none of these companies made a profit: doordash made $23 million in the second quarter of last year, but still lost $149 million in the first nine months of last year, according to its prospectus.
“The profitability of the third-party takeout industry is still a lingering problem, and they have no expectations as to when to achieve this goal,” Cowen analysts wrote in a research report
Doordash said the company has been losing money every year since its inception and expects that to continue. Uber reported an adjusted loss of $183 million in the third quarter of last year, an improvement from a year earlier. Grubhub lost $9.2 million in the third quarter of last year.
Figure: the driving role of the export business of the epidemic
Some experts believe that doordash may have an advantage over Uber eats in terms of profitability. James Gellert, chief executive of rapid ratings, a market research firm, points out that doordash’s profit margins are “significantly better.”. He said doordash’s financial position is the highest rated of listed companies “in recent years.”.
More questions
But doordash and its rivals still face a variety of problems affecting their financial health, including resistance from restaurant owners such as Davis. The reason why they decided to join at the last minute was that the takeout cut their profits. The takeaway staff are also dissatisfied with the platform. During the epidemic period, some cities even restricted the takeaway application and charged too much commission to restaurants that were already in a difficult situation.
“The catering industry wants to limit commissions,” says Mark Cohen, head of retail research at Columbia Business School. “The only way to solve this problem is to raise food prices. When the dust settles, consumers will have to pay for it. ”
Davis’ five stores in Santa Cruz are currently capped at 15% take away Commission. In several other cities, the ceiling is between 10% and 20%, lower than the 30% normally required by takeout companies. A campaign launched last year called “protect our restaurants” is pushing to expand these restrictions across the country.
The American economic liberties project, which launched the campaign, has been urging the Federal Trade Commission to investigate takeout practices. “Many cities are mobilizing to try to save the catering industry,” NIA Johnson, a spokesman for the group, said in an interview “What we see in all these movements is an opportunity to really expose these companies.”
Takeaway apps say they are actually helping restaurants, especially during the outbreak. Taylor Bennett, global head of public affairs at doordash, said in an email that the company “has always been committed to empowering local businesses” and “supporting restaurants is more important than ever.”.
During the outbreak, doordash said it saved at least $120 million in commissions for restaurants in the United States, Canada and Australia, and the take out service provided by the platform allowed many restaurants to continue to operate. Grubhub also mentioned that the company spent $100 million from April to June last year helping restaurants, drivers and diners, but declined to comment on the activities launched by the U.S. economic freedom program.
Neither postmates nor Uber eats responded to requests for comment.
Many of the takeaway workers who deliver food to these companies are contract workers with low wages and few benefits. In California, odd jobs companies, including takeaway services, successfully passed an initiative last November to ensure that they do not have to treat takeaway workers as regular employees, and they are seeking to do the same elsewhere.
Orlando Santana ships instacart and Amazon flex in the Seattle area, as well as ships for doordash and target. He found that during the outbreak, demand for takeout increased as skilled workers in the area turned to work from home. But like other takeaway employees, Santana finds its revenue declining, especially when some customers don’t reward takeaway employees through apps. Every day Santana goes first to Amazon flex, where he says the basic wage is $18 an hour and he always gets tips. By contrast, his minimum wage on instacart is just $7.
Josette sonceau, who worked for doordash in Charlotte, North Carolina, for more than two years, stopped taking orders because the epidemic might worsen. She said that at first she only delivered delivery on weekends. When she saw her income increase, she also started working on weekdays, 25 hours a week. Then, “about last fall, I started to see orders for $2 and $3.”
Songsuo supports a part-time activity called payup, which discusses how tipping can get low wage workers into trouble. “It’s long overdue to reform the system and provide fair pay to all employees so that no one has to rely on tips,” she said

Doordash reached a $2.5 million settlement with the District of Columbia this week. The company is accused of misleading customers between 2017 and 2019 and misappropriating the tips that customers originally gave to takeout staff. Since then, doordash has revised the tip policy.
Staff issues bring legal and regulatory scrutiny. San Francisco and other places have begun to sue these companies. A law passed in California has invalidated the voting initiative just passed, but it has also troubled some restaurant owners who use these apps.
“I think it’s sad that takeaway app companies are pushing labor costs to contract workers,” Davis said He was interested in the possibility of building a takeout network with other restaurant owners, but acknowledged that the coverage of these applications and the complexity of the infrastructure were difficult to replicate.
Even if the takeaway app company manages to ensure the security of its business model and avoid having to classify employees as regular employees, the compromise offered will still increase some labor costs. They have made it clear that they will pass these costs on to consumers. For example, doordash once said in his prospectus that changes in California’s policies could lead to higher fees and commissions.
“Everyone who does well is doing harm to others,” says Cohen of Columbia Business School (Jiao Han)