Deliveroo has launched a new arm to its operation which will supply raw ingredients to restaurants – and claimed it can deliver savings of up to 40%.
It said the scheme, which it calls ‘Food Procurement’, has been in trials for a year at “several hundred” restaurants. It will launch across the UK this summer and Deliveroo predicts 5,000 restaurants will sign up.
Deliveroo said the average saving on ingredients like vegetables and meat, as well as other restaurant essentials like cleaning supplies and packaging products, was 20%, though “smaller independent restaurants” who “do not have the economies of scale of large restaurant groups” saved up to 40% on ingredients like avocados.
The delivery specialist said it could offer the reduced prices to restaurants by “leveraging its size, its existing partnerships with both restaurants and suppliers, and using its industry know-how to get lower costs”.
It added the scheme would offer “vital support for restaurants at a time when food costs have increased by as much as 50% in the last five years and when food costs typically make up 20-40% of an average restaurant’s sales.”
Deliveroo has set up a dedicated team at its London HQ as it prepares for the rollout to go live by the end of the year in Spain, France, UK and UAE.
“Food Procurement is an exciting new service for restaurants, which will cut costs while raising the quality of ingredients,” said Ajay Lakhwani, VP of new business at Deliveroo.
“By using our size and scale to negotiate great prices we can both simplify the procurement process and help independents and chains can make big savings. Restaurants and their suppliers are the winners. And, of course, this is great news for customers, as restaurants cook with better quality ingredients.”
Restaurants taking part in the trial said it had delivered tangible benefits. Karthik Ramakrishnan, group operations manager at Banana Tree, said it “not only helps reduce costs, but also makes it easier to get the right ingredients at the right time. The scheme matches the needs of our business and has quickly become a vital cog in our procurement operations.”
And Yanni Spitadakis, Sushi Shop group country manager UK, said using the scheme had “improved our whole procurement process, making it easier and cheaper to get the ingredients we need. With food prices on the rise, it has been vital in helping us keep a lid on our overheads.”