Only the Strongest Fresh Food Delivery Startups Will Survive

We're in the midst of a major food delivery service boom, and like any other bubble, it's eventually bound to burst. Companies focused on delivering fresh food and groceries are facing huge challenges when it comes to actually getting their product out to customers, says TechCrunch.

Of course, fresh food delivery is really nothing new: After all, up until the 1950s or 60s many Americans had fresh milk delivered right to their front doors. But things are a little more complicated these days: "In the mid-20th century, a visit from the milkman was part of the weekly routine. He’d start his morning at a dairy, then head door to door with his refrigerated truck full of freshly filled bottles, changing out old empties for new." TechCrunch explains. But "the Milk Run model has a critical weakness: It doesn’t work whenever any variability is introduced; for example, if someone requested a different delivery time or wanted to order something different."

Instead, food delivery companies like UberFresh and Blue Apron are having to rely on considerably more intricate delivery models, such as the kind utilized by major delivery providers like FedEx, to ensure their highly perishable products get to customers before spoiling. One of the biggest problems is that — unlike the most popular delivery food of them all, pizza — groceries have very low profit margins, which doesn't leave companies a lot of breathing room.

And plenty of companies have already buckled under the pressure. In just one example, last year a promising startup called Good Eggs, an online farmers market that serviced several major U.S. cities, suddenly shut down the majority of its operation. The complicated logistics of providing such a service had proved too much: "The single biggest mistake we made was growing too quickly, to multiple cities, before fully figuring out the challenges of building an entirely new food supply chain," the company's CEO wrote.

One thing's for sure: The consumer demand to have anything and everything under the sun delivered to their homes won't be lessening anytime soon. And in the realm of fresh food delivery, only the strongest — that is, "the food entrepreneur who first perfects these newest delivery models" — will survive.