| You look at it as a restaurant problem but it's really an ecommerce supply chain problem. By implying restaurant you're still thinking about back of the house and front of the house. That paradigm doesn't exist for the likes of SpoonRocket or Munchery or Sprig. They operate out of commercial commissary kitchens that produces products that needs to go into a distribution network to people funneled in from marketing. The bet is that function isn't linear, rather it can be scaled up, especially when prodded along by all the state of art and best practices in ecommerce marketing techniques. These guys were trying to play the Amazon game, but instead of a 2 day shipping window, it's right now or in a few hours. And instead of a shipping hub to your door steps, it's down the street to your doorsteps. And instead of elastic goods that can wait for awhile before you commit to buy it's a need to satisfy. A successful restaurant feeds your craving. A successful supply chain fulfills your need. The real challenge is just the fact at the end of the day there's a fixed cost to fulfillment no one can figure out how to shake. Despite all the twisting in the labor relationship (avoiding W2s or stealing wages), it still costs $15/hr to deliver up to four $10 items that costs $3 to make. Until that goes down (with automated tincans on wheels) then merely sale of food items won't support these bets. Except weed and alcohol. Those are the only things that have the margins and demand to support an immediate delivery network. |
OP is right here that the substitute good for Sprig was ordering delivery from a restaurant. Typically when you think about ordering delivery, you instantly start thinking about your favorites, meaning this industry is hard to scale because it requires building trust.
Weed and alcohol may have monopolistic characteristics brought on by strict licensing requirements, but people typically don't consume these on a daily basis so the lower delivery quantities negate the higher margins.