Industry News

UAE’s ever-growing home delivery market currently valued at AED 12.9 billion (US$ 3.5bn)

June 11, 2017, Source: Hotelier Middle East


The Noodle House launched a dedicated delivery hub and industrial kitchen in April to expand its in-restaurant dining business. The new delivery hub will cater to the UAE’s ever-growing home delivery market which is currently valued at AED 12.9 billion with an ambition to increase its own online orders by 25%. Now open in Dubailand, the delivery hub expands Noodle House’s geographical reach and improves customer experience in existing delivery areas.

Emma Banks, general manager of Jumeirah Restaurant Group, spoke to Caterer Middle East saying: “The idea behind the spacious, new Noodle House industrial kitchen this size is luxury and usually with in-house dining kitchens we don’t get to have kitchens this big. This is designed for quick seamless service as well as room to prepare for delivery."

However despite the space, Banks reiterates that the industrial kitchen has drastically reduced the amount of equipment. "We used to have a duck dryer and the works but now we have just one piece of equipment that does all.  We don’t want to be buying expensive piece of equipment. We’re using less space by having less equipment,” she adds.

The idea behind opening the hub she says is that “the new 80-square metre delivery hub caters to customers in 17 locations, including Arabian Ranches, Dubailand, IMPZ, Jumeirah Village Circle and Motor City, Barsha 1, 2, 3. So drivers don’t have to battle traffic mall parking lots. It’s hugely efficient and streamlined. It’s the future of delivery.”

JRG conducted a feasibility study over two years ago which foresaw growth in home delivery. They could not meet customers demands and didn't have enough cars on the road. Banks adds that they realised they were delivering out of restaurants which are in very congested areas like DIFC, Media City, Souk Madinat so they used a two-pronged approach. "We successfully moved to bikes and underwent safety and training for our riders. We aimed our strategy around bikes. The second part was that we conducted a feasibility study and identified areas where we said, imagine if we dropped a kitchen in that area what new delivery routes could we open up. We wanted to be near all the major road networks where rent is cheap rather than renting in premium locations. You can actually take a locations and design the kitchen to suit your business model," Banks adds.

“This project has been over a year in the making because we had some challenges around power, DEWA but we’ve worked with those authorities and with Jumeirah’s support we now have what we call a pioneering project in an area that will develop. The main thing about it is that it gives us access to over 17 new locations in Dubai that we couldn’t service before."

Emma Banks said at the Caterer Middle East Food and Business Conference that  20% of Noodle House's home delivery business comes from Deliveroo.

"Noodle House has a fleet of 30 bicycles and we're self sufficient with bikes on the road but some of our customers were going to UberEats or Deliveroo; the market is changing and the trends are changing. However this business plan was in place before Deliveroo even came to Dubai. Moving to bikes and low rent accessible places was always a part of the plan. What we’ve done in partnership with third party and online portals like Talabat is we’ve understood that the customer is king. If the customer wants to use an app to order food we want to be represented there. We have 24 drivers on the road we find that because of our presence on Deliveroo and access to their drivers, both together is driving considerable growth for us. Noodle house is a brand and we could have just gone alone but reality is that working with partners, we’ve increased our market share considerably and we have retained our prime customer base," she adds.

In KPMG's annual food and beverage report, three out of four survey respondents said they order a take away or have food delivered at least once a week. The study also added that 82% of industry respondents said they are “already listed on all the food apps in the market” and found value in them.

“We expect another 25% bump on our home delivery business with the opening of Noodle House industrial kitchen in addition to what we’re doing. In 2017 alone our home delivery business has grown from anywhere between 20-30% already," Banks says.

However the JRG general manager isn't sure if this will set them apart from competitors because for customers as long as the food is cooked well, is delivered on time and is hot, it doesn’t matter whether it came from an industrial kitchen or a restaurant. "The way this will set us apart is that it will allow us to deliver to untapped locations. It may set us apart for a while until more restaurants decide to move here as well," she adds.

But Banks emphasises that safety of the delivery riders is paramount. JRG developed its own delivery bikes with a special manufacturer to make sure the bikes were safer than what other delivery services provide their riders.

“We went to a manufacturer where the delivery box is designed as part of the chassis so that it’s designed in such a way that it’s perfectly balanced for safety. The delivery box is heated and they are self-cleaning as well. You’ll also notice that the bike is designed in such a way that the driver doesn’t have to swing his legs to get on. You can imagine if you’re a driver doing that two-three times a day, your hip would be damaged," Banks says.

Another unique aspect of the bike — it only go up to 50-90km/h. To ensure safety is paramount, JRG has a driver handbook and regular risk assessments. They also conduct quarterly accident reviews and provide reinforced jackets, helmets gloves and the drivers get into a lot of trouble if they don’t wear their safe riding gear.

When asked if Noodle House is a game changer in Dubai's home delivery business Banks says, “I don’t want to be arrogant and say we’re starting a trend because there are companies like Dominoes and this is their business model where they populate the whole city with different branches. We've just identified a model that works for home delivery and though we are a dine-in model, this makes up a huge part of our business."

"We looked at experts in home delivery business and replicated a model that could work for us."