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DoorDash (Helps) Build a Restaurant
Part one of a special two-part Expedite Wednesday.
Heavy news weeks are the best (when it’s about restaurant tech, at least). You’re receiving Expedite in two parts today. Part two arrives soon, featuring an interview with Slice CEO Ilir Sela. We talk fee changes, Big Delivery, and how a so-called niche ordering platform has kept it up amid tough competition.
A beloved Bay Area restaurant has a takeout-only spinoff with a big tech backer: DoorDash invested in Burma Bites, a spinoff from Burma Superstar that opens for takeout and delivery today. “Burma Bites is an example of working alongside a restaurant to find new ways for our partnerships to adapt to the new normal,” Georgie Thomas, DoorDash head of regional merchant partnerships, told the San Francisco Chronicle. Orders leave the restaurant in custom packaging that displays both the Burma Bites and DoorDash logos.
DoorDash, which is expected to IPO this year, has launched a number of initiatives targeting small businesses. (In fact, it has a whole website dedicated to chronicling its good deeds.) The Chronicle describes this investment as the company’s first of its kind, with no hint of another in the future. Terms of the investment have not been made public, so any perceived insight here is just my guess. But think about it: a business that relies on online ordering for delivery and takeout gets a cash infusion from a company that facilitates online ordering and delivery and takeout. The restaurant, in all likelihood, makes an exclusive arrangement with the delivery service for some specified term. In turn, the delivery service collects commissions on orders placed. In Burma Bites’ case, the brand is already well-known and beloved in the neighborhood; the new location will serve to grow the business. It won’t take long — maybe a few years — for DoorDash to recoup its initial investment.
Earlier this week, DoorDash announced it was helping independent restaurants that closed due to Covid reopen for delivery-only operations. The first is Krazy Hog BBQ in Chicago, now open for DoorDash delivery and operating out of a kitchen space called A La Couch in the city’s Lincoln Park neighborhood. (A spokesperson for DoorDash says that the kitchen partner is entirely dependent on the restaurant’s location and needs, and that subsequent restaurants in the program could cook out of a DoorDash facility or a different kitchen space.) The goal is to provide business as Krazy Hog works to reopen in a new, permanent location.
Startups and tech companies that operate in the ghost kitchen space have been growing during the pandemic, benefiting from increased interest in takeout and delivery from diners and a need for restaurants to reach a growing customer base. They’re huge business — CloudKitchens has reportedly spent $130 million buying up spaces to convert to kitchens over the past couple of years.
The DoorDash initiative focuses on helping restaurants with a former physical presence spin up a viable digital footprint using a ghost kitchen facility. So, a “traditional” restaurant enters the virtual space. Take a step further, and you get restaurant brands that exist purely in the virtual realm. Food from these brands sometimes comes from ghost kitchen facilities, but sometimes comes from existing restaurant kitchens. That’s where a company like Ordermark comes in.
Ordermark — a tech platform, not a real estate venture like Cloud Kitchens— just scored a $120 million round of funding led by none other than SoftBank’s Vision Fund. The company operates Nextbite, “a portfolio company of delivery-only restaurant brands,” Ordermark CEO Alex Canter (whose family owns the eponymous Canter’s Deli in LA) told TechCrunch. Nextbite acts as parent company to a bunch of restaurant brands that only exist in the virtual space; existing restaurants with extra kitchen space can sign on to operate one of these brands. A franchise model for the digital age. (Worth noting that this model is A Thing and that there are other companies invested in building the same type of business.)
Whew. A little restaurant-ception for your Wednesday.
What else is happening?
Eater NY walks through what a proposed ban on WeChat — used by many Chinese Americans and Chinese restaurants in America — means for Chinese restaurants in New York. Restaurants in the story report cultivating huge communities via WeChat both before and during the pandemic; diners say that WeChat hosts the best Chinese restaurant reviews in the city thanks to a robust influencer network. Worth a read to understand how losing a piece of technology that doesn’t seem directly connected to restaurants could actually dismantle a huge and vital community that supports some of the most vulnerable businesses in 2020.
Virginia Tech researchers got a $1 million grant from the USDA to study potential Covid transmission in food. As we close in on a year since Covid’s emergence, we’re starting to understand more about how it’s transmitted. Surface and food transmission now appears less likely than person-to-person spread, but there aren’t definitive answers about the potential for transmission via food and food containers. More info in this great piece from The Counter.
Chipotle added a sustainability tracker into its app. It’ll tell you “the sustainable impact you're helping make on the planet by choosing Chipotle's real, responsibly-sourced ingredients versus conventional ones.” Categories include water conservation, antibiotic avoidance, and carbon reduction. This kind of thing on a large scale is good for raising awareness. If you’re into this sort of thing, I strongly recommend checking out the Zero Foodprint initiative, to which small and independent restaurants around the world have pledged their support.
TikTok is the new Instagram, or something. San Francisco Chronicle critic Soleil Ho reviews, practically, the way an order with stunning presentation — and a viral TikTok presence — actually tastes. “Highlighted with post-production sparkles and dreamy electronica music, the $60 tray for two — filled with savory dishes like fried chicken with roti, curry puffs, shrimp fried rice and papaya salad — looks like a care package from Wonderland,” she wrote.
San Francisco is moving to make fee caps (a little) more permanent. The city’s board of supervisors will meet next on November 3 (gah!) and could send an ordinance to a vote as soon as November 10. If passed, the measure would extend the cap on delivery commissions through 60 days after restaurants are able to open at 100 percent capacity. It would also prevent restaurants from listing non-partnered restaurants in their inventory and also prevent third-party services from enforcing pricing policies that require restaurants to maintain consistent menu pricing across apps and in-store offerings.