Deliveroo is promising restaurants savings of up to a fifth on ingredients after expanding into procurement.
The company this morning launched ‘Food Procurement’, a new service that allows restaurants to purchase cooking ingredients and supplies at reduced prices via bespoke deals negotiated by Deliveroo.
The scheme, which Deliveroo has been trialling for a year, claims to have saved restaurants involved in the tests more than 20% on their ingredients bills.
Some smaller independent restaurants even cite savings of 40% in some areas thanks to the buying power that Deliveroo is able to leverage to negotiate better prices.
The move will have the industry wondering if Deliveroo will expand the service to include catering equipment or kitchen accessories, especially as it already covers cleaning supplies and packaging products.
Rival Just Eat already said previously that it had begun exploring catering equipment procurement through its Restaurant Services division, which was created to negotiate centralised buying agreements on items such as food, utilities and electronic card payments.
Deliveroo’s Food Procurement platform will be supported by a dedicated team at its London HQ, who will be tasked with negotiating the cost of ingredients and other items. They will leverage its size, existing partnerships with both restaurants and suppliers and industry know-how to get lower costs.
Deliveroo said the scheme would provide 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 between 20% and 40 % of an average restaurant’s sales.
Several hundred restaurant partners are already using the scheme, and the company expects this number to be at 5,000 by the end of the year.
Ajay Lakhwani , VP of new business at Deliveroo, said: “Food Procurement is an exciting new service for restaurants, which will cut costs while raising the quality of ingredients. 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.”