Online delivery service Food.de plans growth
In the fast lane: Food.de wants to expand its online home delivery service rapidly throughout Germany
After Berlin and Leipzig, the start-up operation will now also provide its service in Dusseldorf.
Consumers in this Rhenish city, famous for its ale and advertising companies, will be able to choose from a range of more than 10,000 lines, including fresh produce and frozen food.
The company uses its own temperature-controlled van fleet to guarantee same-day delivery. Alternatively, customers can choose a two-hour time slot for any of the seven workdays subsequent to their order.
The goods are supplied by "a local C&C wholesaler in each metropolis," says Karsten Schaal, founder and CEO of limited company Food direkt GmbH (Food.de).
Sounds good, but will it work?
Hopeful, young entrepreneurs
"Custom-made indoor route planning software speeds up picking and gives us an advantage in terms of efficiency," says co-founder Christian Fickert.
Both these young entrepreneurs are optimistic that Food.de will "probably cover its costs soon" and want to make a profit as early as this year. "We've now added Dusseldorf because we see that we can be profitable," Schaal adds.
Cologne will also be delivered by the end of this month. A total 14 towns and cities in the Ruhr area as well as Frankfort, Hamburg, Munich and Stuttgart are on the agenda for the coming months.
Food.de has now found a "high six-figure sum" to finance rapid nationwide expansion. Its backers include IBB Beteiligungsgesellschaft-managed venture capital fund Kreativwirtschaft Berlin and Leipzig-based investor Olini Verwaltungsgesellschaft as well as Business Angels Venture Elements, Spandau Ventures, and Lemonade Invest.
As Karsten Schaal is also CEO of Leipzig investment company Lemonade Invest, one might call this a classic example of putting one's money where one's mouth is.
Given the cost of delivery logistics, the generally low margins in German food retailing, high store densities, and the hitherto lukewarm reaction of German consumers to e-food services, it is also a brave one.
Titans vs. start-ups
Despite a recent resurgence of interest in the segment, fuelled by Amazon after a decade-long lull, German home delivery roads are littered with the wrecks of those who dared, but lost.
Supermarkt.de is merely the latest victim. Dusseldorf-based Froodies was obliged to file for insolvency in May 2012, and Andreas Prüfer's Lebensmittel.de gained majority control of Gourmondo in September after it had failed to make a profit in ten years.
As a business-friendly newspaper, Lebensmittel Zeitung obviously wishes any start-up operation well. Seen dispassionately, however, it is irrelevant whether Food.de is successful with its ambitious growth plans, or not.
In the greater scheme of things, Food.de represents a further example of how more and more capital and entrepreneurial skill, from both within and without the trade, are being stirred into the online pot. It is therefore not a question as to whether, but simply when the nut will be cracked.
Surely, it is also a sign of the tectonic shift within the industry that Lebensmittel Zeitung's editors do not seem to have reported on the creation of any store-based businesses for a long time now.
Lebensmittel Zeitung is often asked who will win the "battle of the titans"? By this they mean the struggle for supremacy between the AGFAs (Amazon, Google, Facebook, and Apple) and the Walmarts, Carrefours, Metros and Tescos of this world.
Come on, guys, it ain't rocket science, just follow the operating profit...
Related article in German: Lebensmittel Zeitung, no. 3, 18.01.2013, by Silvia Flier
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