Deliveroo Editions is on a mission to put an end to postcode envy by offering restaurant brands access to kitchen hubs where they can cater directly to the delivery market. But how does the company’s business model work and what sort of planning goes into setting up off-site delivery kitchens around the country?
FEJ editor Andrew Seymour headed to its state-of-the-art London HQ to meet Nigel Rivers, general manager of site operations at Deliveroo Editions, for the inside track on how one of the industry’s most transformative companies goes about its business.
Nigel, you run the site operations aspect of Deliveroo Editions. Can you give us some insight to what the role entails?
It includes everything from the kitchen layout, procurement and installation aspect of the site openings side — which also includes liaising with the restaurant partners, agreeing the layout and understanding what the partner is looking for and what we can provide against that brief — to going through a process where we collate all of the HACCP and food safety management documentation. We have very specific requirements of what partners need to have to meet a safe and legal sign-off criteria and we involve external agencies as well to support us in that.
How big is the team involved in the Editions side of the business?
Globally it is in excess of 100. UK-wise it would obviously be less than that but we have site management teams in each of the locations and there is a modest set-up at HQ to manage that centrally.
Your Editions sites effectively serve as fulfilment points for restaurant partners to cook their own orders before they are collected by riders and delivered to customers. How many Editions sites do you currently operate in the UK?
We have 16 in the UK, including nine in London as well as Leeds, Nottingham, Manchester, Hove, Reading and Cambridge. Globally there are 33 currently. Typically, they would consist of between six and 10 kitchens per site; some are slightly bigger, some are slightly smaller, but that would be a good level to have a super kitchen hub. You would need to have a certain quantity, and five or six or more makes sense for us to do it.
Does that equate to five or six restaurant brands per site?
Not necessarily. Some partners may choose to operate multiple brands and sometimes they will operate a virtual brand or a secondary brand to their main more well-known brand. So it could be that there are more brands than actual kitchens operating out of the same Editions location.
Do you find that partners want to replicate the kitchen set-up they typically have inside their restaurants or do they approach off-site delivery as a completely different thing?
Generally, I think they start off with wanting to do the same as they would in their own restaurant. But one of the values that we bring to the piece is that we have got three-and-a-half years’ experience of doing this, and there may be small amendments that we would suggest to a partner in terms of the flow of the kitchen to help them optimise the area that they have got. That kitchen area might typically be around 18 or 19 square metres and we want to make sure that they get best use of that because this really is about speed when they are very busy. That is what we are looking to optimise.
We want to make sure that they get best use of that kitchen because this really is about speed”
Do you have templates in place to help them achieve that?
Most of it is a common sense thing really. It is just that because we have seen it for so long, it’s a natural thing that you need an area where the order comes together, and where the order can be constructed and packaged. And typically it is points like those which the restaurant partner might not always consider when they are first looking at the kitchen layout.
All the data that is available suggests delivery is one of the fastest growing parts of the market and operators are shifting more investment in that direction. What kind of challenges does this present for Deliveroo Editions?
We are always looking to find the right partner selection for the right location and that has been successful to date. Some restaurant operators may wish to do their own thing and that’s absolutely fine — that is their choice. But I think the idea of having kitchens in areas where a restaurant wouldn’t normally have their own bricks-and-mortar location makes sense for a lot of operators, purely because it gives them an additional area in which they can service customers and build their brand. And that goes back to the idea behind Editions — that is what we provide to partners also.
What is the focus for you and your team this year? And what does the site pipeline look like?
We have a good level of experience now in what we are doing and I think we are looking to use the data that we have as a business to continue to grow and optimise our knowledge of the market and the very successful relationship we have with the partners. We have a good pipeline — we have got one confirmed opening in Hong Kong and there are several good leads that we have for the first half of the year.
Have you been able to take any learnings from your global kitchen network and apply them here in the UK?
I think we have tried a few things during the last 12 months. We have looked at a couple of retail-facing propositions — one in Hong Kong and one in Singapore — so those have been very exciting for us and we will review how they may inform us going forward. The results in those two markets are encouraging, I would say.
Let’s just return to the subject of kitchen layout and procurement because those are key areas that you are heavily involved in. When you engage with a restaurant partner, do they typically come to you with a fixed plan of how they want their kitchen to look — or is it more of a two-way approach?
It is more two-way. For a new-build location that may well be the case; we will start from scratch with a partner, ‘this is the space, let’s design it together’. Where the kitchen has had a previous partner who has since left and it becomes what we term as a ‘flip’ kitchen, the bulk of the kitchen is already there and we would probably look to do a similar cuisine type that replaces the previous one. So, in all likelihood, there might be one or two bits of equipment which may need to change, but probably it is not going to change very much.
Do you have a view on the brand of equipment or type of equipment that is used?
It is kind of mixed, really. I think if we are going to do a new site launch, we would tend to use the same refrigeration type throughout all of the new kitchens, for example. If we are doing kitchen flips in an existing site, it would really be where our relationship is with whichever distributors or suppliers that we are using at that particular point.
We may look at slightly different shape kitchens which can offer some flexibility on the cookline to give us different options”
And that would all be backed up by your own service arrangements?
We have a full maintenance set-up, both planned and for reactive maintenance. That is something we need to have, given the number of kitchens we have got globally.
In terms of restaurant brands coming on board to work with you, what sort of timeframe are we talking about between initial engagement and actually trading from the platform?
I would say it is about eight weeks, sometimes a little bit more, sometimes a little bit less. If it is going to be a kitchen flip, the kitchen is already there. It is a case of agreeing a new layout and then it is more about engaging in the food safety management documentation sign-off. We would need to see a copy of their HACCP, we would have an external food safety audit company carry out a review for us and there would be other documentation that supports that. At the point of handover that would then be all signed off as being safe and legal.
It’s quite interesting to consider what makes a successful Editions kitchen. You reflected on speed and flow earlier. Are there some key criteria that are really important to you when constructing the kitchen?
The key criteria, I guess, is having a strong brand that customers want to order from. In terms of optimising the kitchen space, brands that can cover different day-parts are very useful, so we have done a lot of work on launching lunchtime trade. So, if a brand has different types of menu items that can fulfil both of those day-parts, then clearly that is going to be better for us. I think menu offerings that are easy to construct on order are going to be the ones that typically are going to be quicker, and therefore that results in a shorter wait time for customers, which generally equals more popularity.
If you think about the kitchens that operators run in their restaurants, the cost of energy has become a major sticking point. Is that something that you are exposed to, too?
Yes, absolutely. Where we have got sites with 10 kitchens, clearly power bills and utility costs are important for us to monitor and, in several of the larger locations, we have building and energy monitoring systems which help us view what we are using on an hour-by-hour basis. It is easy for us to then identify where there might be issues or where there is opportunity to be more efficient.
Do you look favourably on suppliers of equipment that are quite energy efficient?
We do, but I think it is more important that the partner has the equipment that is going to work well for them. Efficiency is important to us, but we want the partner to have the right equipment that is going to mean that they can service the customers’ need.
Looking ahead to the future, do you expect the shape and configuration of Editions kitchens to change as the market itself evolves?
We have typically looked at a pod-shaped kitchen, so approximately 18 or 19 square metres, and we may look at slightly different shaped kitchens which can offer some flexibility on the cookline to give us different options, particularly where some of the restaurant brands are looking to do more than one brand. Having a more flexible kitchen space might be a way that we can help them achieve that.
Is that something you have a programme in place for?
We have looked at a couple of options in other markets and we have one or two sites that we opened early in the growth of Editions which we are looking at again to see how we can optimise the success of the area.
You’ve spent your career in the restaurant industry, with senior operations roles at The Restaurant Group, Casual Dining Group and Pizza Express. What do you personally most enjoy about your current post?
There is always something different every day. We are trading in eight different markets, so there are always lots of exciting things going on in one or more of the markets at any particular point in time.
Expansion without bricks-and-mortar investment
Deliveroo Editions launched in April 2017 and currently operates from 16 locations around the UK. Its ‘super kitchens’ were designed to enable restaurants to expand without the need for upfront capital to invest in bricks-and-mortar sites. Deliveroo now runs 200 kitchens through Editions, housing small independent brands like Mother Clucker alongside multi-site high street chains.
It uses its customer data to identify cuisine gaps in neighbourhoods and then fills this supply gap with their partner restaurants. Well-known restaurants that have recently moved into the delivery-only sites include Wagamama and Chipotle in Battersea, and Honest Burger in Swiss Cottage. These restaurants previously didn’t cater for residents in those areas, but Editions gives them the opportunity to reach new customers and boost their sales without the significant costs of setting up a physical site.
Why delivery kitchens are anything but a dark art
‘Dark kitchens’ might be a term associated with off-site delivery catering hubs, but it is not one that you are likely to hear bandied about in the corridors of Deliveroo HQ.
The company refers to them as ‘Super Kitchens’ because they are designed specifically for delivery and cooking.
“Dark kitchens came out when people were initially quite sceptical about the [concept],” says Joe Carberry, director of communications at Deliveroo. “That use of it is quite specific to the UK — in other markets the term is not used in a negative way. I think it is used less now as people become more comfortable and used to them, but we routinely take journalists around the sites to show that they are not dark, they do have windows, and they all have quite high FSA ratings and are routinely inspected.
“We have put quite a lot of effort into dispelling all of the negative connotations that you could have with the concept of a ‘dark kitchen’ because a lot of effort and resource goes into making sure that they are state-of-the-art.”
Although it is often reported that other platforms are moving into this area, Carberry insists there isn’t another entity that has the same kitchen infrastructure or which can combine its extensive logistics expertise with the network of riders and restaurants it does.
“Having moved into it first in 2016, when the initial site was launched, we think we have got quite a competitive advantage in having the expertise in knowing how to set up and run those sites with multiple kitchens and having the riders and having the restaurants,” he says. “You might have companies that can provide one of each of those but not necessarily be able to have all three, and the customer base as well, obviously.”