Half a billion to the startup making dinner in a van outside
Wonder says it's ready to expand its revolutionary service. Will it realize its (expensive) mission?
A meal-delivery startup that’s been working for a year in suburban New Jersey is planning its expansion thanks to a reported $500 million from investors. Wonder delivers hot meals from proprietary concepts created by well-known chefs. Plus, it cooks food in its trucks outside peoples’ homes, delivering hot, ready to eat, restaurant-quality dishes. It’s planning for ambitious growth in the next year fueled by investments from well-known sources.
Per Bloomberg, Wonder founder Marc Lore “has a track record of launching ambitious projects.” He started Jet.com to compete with Amazon (and later instead sold it to Walmart for $3.3 billion). People who have used it say it’s amazing — and how could it not be, really? It’s basically a private chef outside your door. But this is early innings, and any offering can be amazing when it’s given license to burn through venture capital.
Wonder is betting an investment in “content” will vault it above potential competitors. It’s paying big-name chefs top dollar to create exclusive brands. (Think: Nancy Silverton, Bobby Flay, Marcus Samuelsson, JJ Johnson.) Lore compared the strategy to Netflix, aiming to “lock up the content.” The content is, ostensibly, chefs, restaurants, and recipes.
While the project’s ambitious scope may differ slightly from others in the delivery space, the company still faces similar expensive logistical hurdles to its scale. Wonder’s current New Jersey operation relies on a 40,000-square foot prep kitchen and fleet of Mercedes vans; huge capital investments in the upscale suburban markets the company is targeting. The plan for now is to continue expanding in the New York area, but later, setting up “a handful of large commissaries that can serve multiple cities,” per Bloomberg.
Then, of course, there’s the permitting problem — the company isn’t licensed in Westfield, New Jersey, where it’s operating. No license means no inspections which means no fees paid to the town as a restaurant would. Presumably, the company plans to address it, but there’s no word on whether it’ll go with the ask-forgiveness model (recently exemplified by Reef) or take steps to introduce compliance into a changing market. (Your guess is as good as mine, but we probably have the same guess.)
There also seems to be a gap in what the company wants to do and what it’s actually doing. Lore penned a LinkedIn missive this week full of phrases like “delicious food at affordable prices,” “more sustainable,” and “even more nutritious.” But its operations in affluent suburbs make it feel much more like a luxury product and less like a revolution in dining.
There’s nothing wrong with convenience and change, and dare I say… innovation (!!) in food delivery, and there’s nothing wrong with a fleet of vans that's able to cook dinner for you if you have the cash to spend. But it’s very clearly a heavily subsidized model in the early stages and will require a ton of investment to realize its ultimate vision. In his post, Lore literally writes, “Fueling our vision will require a lot of capital and thoughtfulness as we grow.”
So, sure, the fleet of fancy kitchen vans might be new, but we’ve been down this road before.
ChowNow’s plea to diners: Order better
Leaders at ChowNow, the direct ordering platform for restaurants, have long touted its promise as a better service for restaurants. Now it’s adding a strong consumer signal to its mobile app: a score that tallies the amount of money a customer has saved restaurants by ordering with ChowNow instead of a third-party delivery app.
“How you order does matter at a restaurant,'' said ChowNow CEO Chris Webb. “And you, the consumer, should be aware that when you order direct, it’s better for the restaurant. When you use one of the other delivery apps, the restaurant is going to give up a fairly large percentage of the revenue. And in many cases, you, the diner, are actually going to pay more for that exact same meal because of menu prices being inflated, or because service fees have been layered onto it.”
So does the company think that diners have some sort of elevated responsibility to restaurants simply by virtue of being a hungry customer? Not necessarily.
“We’re not asking anyone to go out of their way in our favor,” Webb said. Instead, ChowNow wants to prove its worth to diners in crystal clear terms. He said the new score, which the company calls a diner impact score, is just the first step.
Webb is hoping a renewed call to help restaurants resonates with consumers now, building on momentum that’s already there. During the pandemic, people have gone out of their way to help local restaurants survive, he said. A logical next step is showing them exactly how much of a difference they’re making by the way they choose to order.
The mission has also come with some concessions. Webb said ChowNow resisted creating any sort of marketplace, or even a list of its restaurant customers, for years. But recently the company has revamped its own app to highlight local restaurants that accept direct orders — the same way DoorDash or Uber Eats list out restaurants on their platform for discovery. Any independent restaurant that takes online orders can add itself onto ChowNow’s marketplace, even if they’re using a competing product to take orders.
It’s a purchasing reality, Webb said, comparing online restaurant marketplaces to travel sites like Expedia.
“Even after decades and decades of hotels and airlines and everyone else saying, please, book direct, you still have people go into marketplaces. People like having that one app and we now want that one app to be ChowNow,” he said.
Will our speedy expectations make DoorDash hire workers?
DoorDash is jumping into the 15-minute grocery delivery business in New York. It’ll join a handful of other well-funded players in the space, competing to offer New Yorkers fast and efficient delivery for everyday items. It’s not DoorDash’s first foray into grocery or convenience; the company has been pushing its DashMart and other convenience offerings for a while. But it is a bit of an experiment in another sense: the couriers who deliver these quick convenience workers will be DoorDash employees, not contractors.
Per coverage in Wired, DoorDash plans to start with about 60 couriers, all of which will work part time hours at first. And they won’t actually be employees of DoorDash; instead they’ll be employed by DashCorps, a DoorDash subsidiary. But they will be eligible for benefits that come with part time — and eventually full-time work.
Why now? According to the company, it’s the nature of the work, which requires couriers to travel back and forth to the warehouse to fulfill orders. DoorDash’s regular couriers, dubbed Dashers, are paid per delivery. These couriers, who will arrive on DoorDash-provided e-bikes that can travel up to 20 miles per hour, are paid hourly.
“Achieving ultra-fast delivery times inherently requires more structure and organization to ensure orders are fulfilled quickly and merchant and customer expectations are met,” DoorDash’s blog post on the announcement reads. “The work associated with powering instant delivery from DashMarts is fundamentally different from dashing.”
For now, the company seems to draw a clear line between “traditional” dashing as a contract worker and this sort of hourly wage ultra-fast service, which suggests the company’s gig work model isn’t going anywhere. Per the same blog post, 90 percent of Dashers nationwide say they want to remain independent contractors, and DoorDash is “steadfastly committed to protecting and strengthening this independent work.”
What else is happening?
Square released its annual future of restaurants report today that included an operator survey. Here’s a taste: 58 percent of restaurateurs are still concerned about the survival of their restaurant — a high number — but down from a terrifying 92 percent last year. Square says its restaurants are “moving out of survival mode” and looking to grow. 69 percent of restaurants say they plan to offer online ordering even after COVID-19 subsides. For restaurants offering online ordering, 34 percent of their revenue currently comes from online channels. And just under half say they plan to offer first-party delivery even after the pandemic. 62 percent plan to offer third-party delivery.
Tom Colicchio hawks NFTs. In a series of tweets that had food Twitter scratching its collective head (and, tbh, some eye-rolling), chef and Top Chef star Tom Colicchio announced a pizza-themed NFT project, promising “something revolutionary.” Fifteen years a food writer and all it took was a little NFT mocking for me to get that TC retweet.
REEF snaps up 2ndKitchen in ongoing expansion. Despite landing in hot water last month for food-safety violations, which some insiders blamed on the rush to grow, Reef Technology shows no signs of slowing down. The company on Tuesday announced the acquisition of Chicago-based 2ndKitchen, a company that helps businesses like breweries and hotels partner with local restaurants to create custom food experiences. It handles those partnerships end-to-end, including initial setup, ordering, payment, fulfillment and customer support. 2ndKitchen will now operate under REEF’s Hospitality division.
“Our acquisition of 2ndKitchen allows us to seamlessly connect hospitality venues around the world with REEF’s brands and excellent operations,” Tommy Rosen, Head of Development at REEF, said in a press release. “This will set a new service standard and revolutionize the guest experience in the hospitality market
- Danielle Hyams
Serve robotics, formerly known as Postmates X, secured some more cash. Its investor list shows who’s thinking about robotic delivery: Backers include Uber, Delivery Hero, and 7-Eleven, among others.
Speaking of robot delivery, these companies might want to invest in snow tires.
ICYMI, I recently wrote a piece for Eater about outdoor dining and kids. Pandemic aside, outdoor dining has been an absolute godsend to this mom of two littles — and now I can confidently say from my reporting, plenty of other parents, too. Would love you to give it a read.