Retail, Innovation and Manufacturing reporter for the NZ Herald

The goods: Food to your door trend growing

The trend for home food delivery services has taken off and everyone from tech giants to small players want a slice of the pie. Holly Ryan takes a look at what's on offer in the delivery market.
Oceanz Direct owner Chris Hawkins delivers seafood direct from the boat to the front door. Photo / Jason Oxenham
Oceanz Direct owner Chris Hawkins delivers seafood direct from the boat to the front door. Photo / Jason Oxenham

It was one of the rituals of parenthood - the sports fundraiser - that catapulted Chris Hawkins into the fast-growing market for home-delivered food.

Back in 2008, his 17-year-old son Zak was invited to compete in the cross-country world champs in the Czech Republic. The trip was going to cost about $10,000, so Chris Hawkins decided to raise some money by joining forces with a friend and local fishery owner to deliver fresh fish around Kumeu.

When the fundraiser finished, Hawkins had so many calls asking about the deliveries, he decided to carry on with the business.

Eight years on, he has partnered with fish supplier Oceanz to continue home delivery across Auckland.

The resulting operation, Oceanz Direct, is just one of a slew of food delivery businesses that have launched in the New Zealand market in the past few years, and according to market commentators, that growth is only going to continue.

"I think it's got huge potential [in New Zealand] and it's already huge globally," says Elaine Rush, professor of nutrition at AUT.

"And it can be done on all sorts of scales, so there's gourmet meals but also the more grassroots ones where it's just basic food delivery options that save people time and effort so that they can have easy, good meals at home - and nutritionally it's a good option."

The pan-fried fish with pea and lemon risotto meal from My Food Bag. Photo / Dean Purcell
The pan-fried fish with pea and lemon risotto meal from My Food Bag. Photo / Dean Purcell

The dinner kit business - delivering meals, or boxes of meal ingredients, directly to customers - took off in Sweden in 2007 and was quickly adopted across Europe and the United States.

The trend has taken off in the past few years and has been embraced by tech giants as well as smaller operators.

There is Uber, which launched UberEats in 2014, Deliveroo, which operates globally, and online giant Amazon offers free home delivery of restaurant meals in some markets.

Within the first few days of the scheme launching in London, more than 180 restaurants had signed up to Amazon's service.

In New Zealand, the modern era of food delivery arguably began in 1996, when Countdown started a trial of online shopping with 100 Auckland customers. Today it has 80,000 regular online buyers and fills more than 20,000 online orders a week.

Competitor Foodstuffs, which operates the New World and Pak n'Save supermarkets, is rolling out online ordering and home delivery in the next six to eight weeks, store by store, and has a food box trial under way at several of its South Island stores.

Rush says growth in the industry comes from a combination of people being short of time, but still wanting to eat nutritious and simple dishes.

"[Food delivery services] take a lot of brain power out of it and it's just convenient," she says.

"For people that are working long hours and shift hours, it's simple - the instructions are very clear and you have delicious food and get to try different things."

The big player

My Food Bag co-founders from left: Nadia Lim, Theresa Gattung and Cecilia Robinson.
My Food Bag co-founders from left: Nadia Lim, Theresa Gattung and Cecilia Robinson.

The big player in the New Zealand market is My Food Bag, launched in 2013 by MasterChef winner Nadia Lim and husband Carlos Bagrie, with Cecilia Robinson and former Telecom chief executive Theresa Gattung. The company started out by offering basic food box options and has since expanded to seven choices, with offers for one or two people, families, gluten-free options and gourmet or vegetarian deals.

Subscription models are here to stay and it's a growth category.
Cecilia Robinson, co-founder of My Food Bag

My Food Bag now has more than 50,000 customers and is on track to hit $135 million in annual turnover by March next year.

Robinson says the company is doing well and she isn't worried about competitors getting in on the act.

"We welcome competition," she says. "Subscription models are here to stay and it's a growth category. As more and more people embrace the convenience, time saving, cost saving and less food wastage, the better it will be for My Food Bag."

Robinson says the company's most recent addition - the Bargain Box - has grown the category by around 25 per cent and proven so popular that it is launching a Bargain Box Mini, designed for two people.

In the next few weeks it also plans to launch My Food Bag Express, offering semi-prepared or pre-cooked ingredients, making food preparation even easier for consumers.

Taking a bite

Despite My Food Bag dominating the New Zealand market, a number of other businesses are also competing for a slice of the consumer's food dollar, including Foodbox - one of the first to launch in New Zealand.

Peter Smith and Jenny O'Donnell set up Foodbox in 2009 when they returned from living in Britain, starting out with "a beat-up station wagon and a shoestring budget".

Smith says the couple, who have a food engineering and food science background, knew they wanted to do something in the food industry and had started a similar business in Britain before bringing the idea to New Zealand.

"Foodbox was an idea we saw when we were in the UK," says Smith. "It may sound like it was calculated but it really wasn't. We just knew we wanted to do something in the food industry and we thought if we could provide fresh food for [New Zealanders], it had to be a good thing.

Thomas Dietz, founder and CEO of WOOP (centre), with WOOP chefs Kristen Staines and Kamil Splinter.
Thomas Dietz, founder and CEO of WOOP (centre), with WOOP chefs Kristen Staines and Kamil Splinter.

"It sounds funny but we didn't start off with grand dreams of what it was going to turn out to be - it was more set up as a service to help people."

Smith won't disclose customer numbers, but says the company has grown significantly since it launched; since those days they have upgraded to delivery vans and have about 15 staff.

As Smith sees it, the company's point of difference, aside from home delivery, is the freshness of its products. Orders can be changed until midnight, then packed from 3am to be delivered that day.

Oceanz Direct operates a similar model, delivering fish straight from the boat to people's doors.

"As a kid growing up you'd have a fishmonger in every village or suburb but they're few and far between now - everyone goes to supermarkets," Hawkins says. "The margins in food aren't great, but there's a lot more feel-good factor in what I'm doing than selling advertising, which I used to do.

"I don't earn nearly as much as I did but it's far more enjoyable."

Despite its amazingly fast growth, the total revenue generated by food kit deliveries in New Zealand still represents less than the revenue of two large supermarkets.
World on our Plate chief executive Thomas Dietz

Another market contender - World on our plate, or WOOP - offers a slightly different model, providing semi-prepared or cooked ingredients, sauces and dressings for customers.

The idea, says chief executive Thomas Dietz, is to take all the hassle out of cooking by providing customers with ready to make meals with all the ingredients chopped and pre-prepared.

Originally from France, Dietz says the market in New Zealand is only just developing.

"The New Zealand market is under saturated," Dietz says. "Despite its amazingly fast growth, the total revenue generated by food kit deliveries in New Zealand still represents less than the revenue of two large supermarkets. And we know there are hundreds of supermarkets in New Zealand.

"In the US, competition is stronger between food delivery services but all those companies present a huge financial interest because of their growth potential - they still only represent a very tiny percentage of the total food consumer market moving from traditional supermarket shopping towards the convenience of home delivery."

Having been in the market for a year, WOOP already has thousands of customers and a team of 20 people, which Dietz says is continuing to grow.

Delivering the goods

There's plenty of competition for the home-delivery dollar. Among the contenders:

MY FOOD BAG
Started in 2013 by MasterChef winner Nadia Lim and husband Carlos Bagrie, with Cecilia Robinson and former Telecom chief executive Theresa Gattung. Offers a weekly or fortnightly delivery of ingredients and recipes, which are ordered online. New recipes are devised weekly by the company's chefs, led by Lim.

Cost: There are seven bags to choose from, with prices ranging from $94.50 for one person for a week, to $179 for a gluten-free option for a family for a week. Two people for four days: $124.50.

FOODBOX
Established in 2009 by food engineering and technology graduates Peter Smith and Jenny O'Donnell, after they returned to New Zealand from living in Britain. Customers order online and can choose from one of seven food box options, as well as specifying if there is anything they don't want, or want more of. Additional options such as dried fruit and nuts, cheeses, juices, flowers and wine and beer are also available. Boxes are delivered once a week to customers in Auckland, Hamilton and Tauranga.

Cost: The seven food boxes range from $80 for one person for a week to $265 for six people for a week. Extras such as a craft beer selection for $27 or cheese of the week for $12 can also be added. Two people for four days: $115.00

Roast chicken meal with fresh vegetables ready to be roasted from Foodbox. Photo / Nick Reed
Roast chicken meal with fresh vegetables ready to be roasted from Foodbox. Photo / Nick Reed

WOOP

Founded in 2015 by Thomas Dietz, World On Our Plate (WOOP) raised $800,000 for its launch through the crowdfunding platform Snowball Effect. The meal delivery business offers pre-prepared ingredients, sauces and dressings for meals, as well as recipe cards. Customers can choose from five box options which are delivered weekly around Auckland. The company also offers gluten-free options.

Cost: Boxes range from $84 for three meals for one person to $207 for four people for three days. A classic box provides four dinners for two adults and up to three children for $199. Two people for three days: $109.00

OCEANZ DIRECT
The fish delivery business started as a fundraiser for a school trip in 2008. Its success prompted Chris Hawkins and his family to continue the business, partnering with fish supplier Oceanz in 2014 to expand delivery across Auckland. Fresh fish is delivered regularly, free for orders over $30 or $1.99 for one-off orders under $30. Customers can choose from a one-off order of seafood or place a standing order which is delivered weekly or fortnightly. Customers can choose their seafood or receive the catch of the day, either standard -- usually Tarakihi, Gurnard, Monkfish and Ling -- or premium -- usually Snapper, Blue Cod, John Dory and Hapuka.

Cost: The minimum order value is $15 and can be customised, based on what seafood and how much the customer wants.

Farro foodkits
Farro foodkits

FARRO FOODKITS

Started last year through upmarket supermarket Farro Fresh Food, founded by James and Janene Draper. Customers can choose individual meals or from one of the seven food box options they want online. The box or the ingredients for each meal and recipe are delivered the night before the customer plans to cook them. Meals are priced individually and there is an additional $10 delivery fee. Celebrity chef Ray McVinnie helps create some of the recipes.

Cost: Individual meals range from around $25 to $35 for two people and $25 to $40 for four. Food boxes range from $35 for a fruit or vegetable box to $150 for a long weekend box. Two people for four days: $100 minimum.

- NZ Herald

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