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The uberization of food: how the sharing economy is transforming the supply chain for the better

Posted by IFCO Systems
November 09, 2017

During the annual “State of the Industry” presentation at the recent PMA Fresh Summit expo, CEO of PMA Cathy Burns asked fresh produce companies how they are adapting to technological changes and trends impacting the fresh supply chain. One of those trends discussed was the “Uberization of food.”

Derived from the popular company Uber, the term uberization refers to the use of a technology-enabled sharing model to leverage underutilized ‘assets’ to provide valuable goods or services. Uberization is sometimes referred to as the ‘gig’ economy when it involves the use of contractors rather than employees, such as available drivers with cars or people with spare bedrooms. New combinations of technology and sharing are blooming fast and far along the food supply chain and here is what they might mean:

Warehousing and logistics

Do you have an extra aisle of empty pallet locations in your cooler or room on trailers? There are various online platforms now available for matching sellers and buyers for excess freight and warehousing capacity. While online freight marketplaces are not new, the value placed on these services is growing. Such platforms are being increasingly looked at as being important for supply chain decision makers in their relentless quest extract new cost savings, even when it seems like every conceivable opportunity has been exhausted.

Recent survey data indicates that uberization is received favorably by four times as many supply chain professionals now than it was in 2014. “Fifty-two percent of logistics and distribution company respondents call the sharing economy important to their strategies,” reports Kevin O'Marah of SCM World. He emphasizes that while Uber itself might be facing challenges in righting its business, he cautions “not to throw the baby out with the bathwater.” The concept of uberization has enormous potential for supply chain savings.

 

Restaurants without seats and seats without restaurants

The restaurant business is in flux. Increasingly, home delivery providers such as UberEats are connecting with restaurants to allow customers to order takeout. Even mainstream fast food restaurants have made a stake such as fast food restaurants like Taco Bell and McDonalds.

Other significant partnerships have come about such as TripAdvisor’s collaboration with Grubhub and Facebook’s connection with Grubhub, DoorDash and EatStreet. Airbnb users can now make restaurant reservations through its app and website in 16 U.S. cities. Consolidation is ongoing in the home delivery space as new ventures sputter in the face of funding limitations. Service providers such as Grubhub and Bite Squad are beefing up through acquisitions.

Restaurants without seats, or more accurately, commercial kitchens dedicated solely for meal home delivery, are making their mark. They are often referred to as virtual restaurants. They can be smaller (no seats or parking required!) and in lower rent neighborhoods. One recent virtual restaurant startup is DoorDash, operating in Silicon Valley. Green Summit, operating in New York City, made headlines earlier this year.

Seats without restaurants refers to online platforms which connect home cooks with customers. As Baum + Whiteman reported in their 2017 trend report, “e-startups around the country are assembling networks of home cooks to prepare meals and deliver them to other people's dining rooms.”  They comment that “most flirt with legal prohibitions about selling food from home kitchens but none is large enough to bother local health authorities...yet.”

In short, the lines between eating at home and eating out are becoming increasingly blurred, and the importance of ensuring the occurrence of equitable sharing is scrutinized.

 

Shared food production incubators

Sharing can also extend to food product startups looking for a production space and guidance. New business incubators such as Foodworks help provide the shared production facilities and guidance for cash strapped new ventures looking to produce food and beverage innovations. Foodworks has locations in New York City; Newark, NJ; Providence, RI; and Portland, ME. Incubators provide the hope for new ventures to have a better shot at reaching the marketplace, increasingly the likelihood of successful innovation.

 

Thanks neighbor!

Our final vignette of the sharing economy for food comes from France. Carrefour is piloting a new collaborative delivery service, Merci Voisin ('Thanks Neighbor'). Carrefour shoppers register to provide shopping and delivery services to other nearby customers, for which they receive compensation. There are other similar services in Europe, including Coop Danmark.

 

Final word

The uberization of food is quickly changing the menu and the lines between grocery shopping, eating out, and cooking at home are becoming increasingly blurred. Logistics sharing platforms, collaborative shoppers, commercial kitchens and home cooking entrepreneurs seem poised to take on more important roles. Changing buying behaviors and preferences will give the food supply chain pause to design solutions which best meet these emerging priorities. Most importantly, it will be important to remember that sharing means sharing in terms of the value generated from online platforms. One might surmise that corporate social responsibility programs will come to monitor such networks.