Key considerations to set up a delivery business

At the time of writing, New Zealand is planning to ease its lockdown restrictions to COVID-19 Alert Level 3 from Monday 27 April. Information in this article is designed to help businesses be ready to re-open for delivery at that time.

With New Zealand easing its COVID-19 alert level to permit the re-starting of takeaway and delivery services, hospitality venues are now cautiously contemplating the idea of re-opening their kitchens.

For those venues that were already engaged in delivery, this will be a return to some sort of normality. But for others, it may be the first time they dip their toe in the delivery waters, and there is much to consider.

Issues to be addressed when setting up your business for delivery include pricing and cost management, menu selection, website requirements, customer communication and staffing, plus additional food safety and hygiene measures.

“Without an extremely well thought out plan, outstanding logistics and a fantastic social marketing campaign to ensure great coverage, you would only be dabbling in the marketplace for little turnover, let alone any profit,” says the Rotorua-based owner of the Stolen Bike restaurant and catering business, Ryan Gregorash, of the planning that needs to go into initiating delivery.

Crucially, before signing up with any platform, make sure you have done your sums and know it is a financially viable option.

“The first thing we considered when planning a menu for delivery was product quality with regard to the travel time,” says restaurateur Krishna Botica, operator of Auckland restaurants Café Hanoi, saan, Xuxu Dumpling Bar and Comensa.

“We put all of our food in takeaway containers and then went home with a couple of team members after 20 minutes to see what we were left with. We deleted all lines that didn't cut the mustard.” 

Other menu considerations include:

• Creating a condensed menu that is profitable for your business, prioritising items that carry high margins.
• Scrutinising your prices. Some delivery/pickup platforms allow you to list your menu at higher prices to accommodate the commission fee charged.
• Doing your COGS. You may still be paying the same rent (if you haven’t asked for abatement already), so make sure the cost of delivering your new menu is not outweighed by your outgoings.
• Creating a weekend brunch menu such as pancakes or breakfast bowls.
• Introducing sales of coffee, tea, merchandise, gift cards, vouchers or alcohol.
• Offering boxed contents and a weekly meal planner or supplying recipes for leftovers.

Some food transportation issues to be aware of include:

• Steam, condensation, varying temperatures, and motion taking their toll on delivery items.
• Stacked foods, such as burgers, should be carefully boxed and transported.
• Maintaining the quality of foods such as French fries and chips can be tricky.

In terms of packaging, Gregorash says there are some essential things to keep in mind when developing dishes for delivery.

“Can it be eaten straight out of the packaging? What will the presentation of the dish look like upon arrival? If it cannot be eaten directly out of the packaging, what will happen to the dish? And crucially, will the integrity of the dish uphold the restaurant and chef’s standards?”  

Also consider these matters:

• Ask if your delivery partner supplies packaging. UberEats, for example, offers discounted prices for packaging thanks to alliances it has with suppliers.
• If buying your own packaging, choose materials that ensure your food arrives in the same condition as it would for an in-house diner.
• Put liquids, such as sauces, in separate containers to add later.
• Select the right sized packaging for your style of food. To make sure your presentation is on point, you may need to compartmentalise or deliver in separate containers.
• A little bit of extra packaging to support your food and drink goes a long way.

“We want to support all of our current food suppliers and stand by them in their time of need,” says Auckland restaurateur Botica of her approach to the current situation.

• Your ordering will need to adapt as produce supplies may be affected, so adjust what you need to have delivered first, then check what they are delivering and when.
• Stock up on delivery packaging.
• Order convenient and shelf-stable products that are readily available and pose a minimal hygiene risk.
• Ensure produce deliveries happen with no-contact and clear instructions on where deliveries are to be placed.
• Use safe handling procedures when orders arrive. This should include rigorous washing of hands and produce.

Some adjustments may need to be made to efficiently and safely handle home delivery systems. Try these suggestions:

• Properly seal packaging and bags using tape or stickers.
• Create a wait area for riders/drivers inside the restaurant a safe distance from each other.
• Riders/drivers should stay a safe distance away from other riders and staff while waiting outside the restaurant if there is no dedicated wait area.
• Create pick-up areas as far from food preparation as possible, so that no direct contact between riders and restaurant staff will be required to pick up an order. Make sure that only one order at a time is collected from a pick up area.
• Dedicate someone from your team to manage pick-ups during busy times.
• Have soap and water or hand sanitiser available to riders/drivers and customers whenever possible.

In regions that are not well covered by existing delivery platforms, venues have the option of using their own staff as delivery drivers. Be conscious of these matters:

• Ensure the safety of your delivery staff and the recipients by complying with the rules around contactless delivery.
• Restrict your deliveries to surrounding suburbs as every minute on the road means a less appealing final meal and longer delivery delays.
• Tap into community pages on social media, and identify those who might need help in self-isolation.

You could also consider teaming up with other local restaurants to create a shared fleet arrangement. Says Gregorash of Stolen Bike: “It is always a fantastic idea to work alongside your fellow restaurateurs; especially the ones that strive to improve themselves and the hospitality industry as a whole.”

Even though a delivery-only model can be restrictive to your business, now is the time to reset and look at what can be done in the immediate term, and what’s possible in the future. Start by leveraging your customer database and utilising the free promotions that are being offered by delivery platforms.

But be aware that using a delivery aggregator can mean your customer effectively remains at arm’s length, limiting your ability to communicate directly with the end user.

“The downside is your limited ability to fix things promptly if something goes wrong with the product or order,” says Botica. “There are also concerns with not having any ability to contact a customer on some platforms (e.g. Uber) if you realise that something has gone wrong or is forgotten and the product has already left the premises.”

With full access to your customer database, here are some activities you can initiate:

• Mobilise a loyalty programme using contact details harvested from your POS, website enquiries and guest wi-fi.
• Partner with a delivery or restaurant booking platform that offers access to your database.
• Promote your changes on social media so customers can see you are open for business and let them know you are doing takeaway/delivery.
• Post your menus on Facebook, promote specials or post shots of orders being picked up.
• Make a video to promote your delivery business and showcase your restaurant’s people, their skills and your dishes.
• Video a handy cooking demo or something that creates brand knowledge for your customers.
• Encourage your followers to post shots of them enjoying your meals, with a discount on an upcoming order as a reward.
• Join industry and local social media pages to see what people are doing elsewhere.