Specialist
Former director at a global QSR
Agenda
- Dark kitchen business models, including outsourcing dynamics and profitability implications vs in-housing for casual dining operators
- Competitive landscape – pure players such as FoodStars vs aggregators such as Deliveroo Editions (LDN: ROO) vs casual dining operators such as Wagamama (LON: RTN)
- UK site expansion outlook amid economic uncertainty and wavering delivery demand
- Unit economics, highlighting food and labour cost headwinds
Questions
1.
What is the shape and size of the UK’s casual dining market, and how does it compare to 2019?
2.
Could you walk us through the segmentation across dine-in and delivery? How does it stand vs 2019?
3.
You mentioned that delivery doubled over the pandemic. What is your growth outlook for delivery vs dine-in? How do you foresee this mix changing over the next 12-18 months and in the mid-term?
4.
How should we think about volume and price in the industry growth rate? Is it driven by frequency? How do you expect consumers to behave towards delivery through an economic downturn?
5.
What is the penetration of dark-kitchen-fulfilled orders in the delivery market? Could you share a split of fully restaurant-cooked vs dark-kitchen-cooked meals?
6.
Where can the 10-15% penetration of dark kitchens reach over the mid-to-long term?
7.
Could you walk us through the different business models for dark kitchens today?
8.
You mentioned that aggregators charge a higher commission, such as Deliveroo Editions. What might this commission look like vs that of a third-party provider?
9.
Does being on all platforms deliver significant incremental volume, if a third-party provider of a dark kitchen is chosen? Why might some casual dining operators choose Deliveroo Editions vs a third-party provider?
10.
How should we think about the mix of casual dining operator preferences across the three business models you discussed over the next 2-3 years?
11.
You mentioned it costs between GBP 150,000-300,000 in CAPEX for a proprietary dark kitchen. What could be CAPEX requirements for aggregator and third-party provider models?
12.
Who are the key players in the market? You mentioned Deliveroo Editions. Could you highlight competition by relevant business model and any winners or losers that you expect to see throughout an economic downturn?
13.
You mentioned Jacuna and Growth Kitchen have a more attractive space for talent. Is staff typically provided by the dark kitchen provider or casual dining operator in this scenario?
14.
You mentioned a struggle in funding for newcomers. Are there any significant barriers to entry for dark-kitchen providers? Are they structural or likely short-term?
15.
You mentioned the, hopefully short-term, squeeze on cash flow for casual dining operators. Would you expect any operators to build out their own dark kitchen capabilities or acquire a dark kitchen provider in the mid-to-long term?
16.
What is the current footprint of dark kitchens in the UK today? Could you walk us through location dynamics, so that we can assess the white space?
17.
Is there a cash burn impact for the dark kitchen provider if it is not running at full capacity? You mentioned some are not.
18.
What are the key cost drivers for a dark kitchen operator today on a per-unit basis?
19.
What do you think is the likelihood of providers, either an aggregator or a third party, increasing the rents or commissions to casual dining operators? What is the cost pass-through dynamic?
20.
What are your top three takeaways from our discussion today?
