Dive Brief:
- Food Rocket, an ultrafast grocery delivery service backed by Circle K parent company Alimentation Couche-Tard, has begun offering hot meal delivery service in Chicago, according to an emailed announcement.
- Offering hot meals for delivery — and widening its range of products in the process — will help Food Rocket strengthen its market position, the company said in the announcement.
- Food Rocket plans to open 200 hot meal kitchens by the end of 2023, CEO and founder Vitaly Alexandrov said in the announcement.
Dive Insight:
Ultrafast delivery firms have had a tough time expanding in the U.S. so far, with high operating costs and intense competition causing many of them to rapidly burn through their investment capital. A few startups have gone out of business, while others have cut back or left the country altogether.
Against this backdrop, Food Rocket is trying to expand its assortment to include not just packaged products but hot meals, as well. The company began testing the in-house program in June and has so far invested more than $1 million into the service with a goal of increasing product marginality by 25%, according to the company. Since launching this program, Food Rocket’s weekly sales growth hit 35%.
Food Rocket’s hot foods menu includes pizzas, breakfast and lunch sandwiches, pastries, biscuits, various hot snacks and espresso-based drinks, with ingredients sourced from various foodservice suppliers. Menu items range from $1.49 to $10.95 and are delivered in around 10 minutes, according to the announcement.
Most of the company’s dark stores have hot meal kitchens today, a company spokesperson said.
About 20% of all Food Rocket orders include at least one item from the hot kitchens, Alexandrov said. Overall, Food Rocket’s kitchens are now generating over 10% of the company’s sales.
Food Rocket isn’t the only rapid delivery firm to add foodservice options. Earlier this year, Gopuff launched its first restaurant brand, The Mean Tomato, and in the summer partnered with QSR BurgerFi to bring burger delivery to over a dozen U.S. cities.
Food Rocket’s in-house hot meal delivery program aligns with its long-term goal to boost operating profits and margins by adding new products and services. Some of those enhancements are automated ordering, AI-enhanced warehouses and portfolio enlargement, according to the announcement.
In April, San Francisco-based Food Rocket revealed it had raised $25 million in funding led by Couche-Tard. Weeks later, it disclosed plans to open a fulfillment center in Chicago co-located with a new Circle K convenience store and offer 15-minute delivery of products sold by both retailers. As part of the financing with Couche-Tard, Food Rocket is working with Circle K to expand its e-commerce and delivery channels. Food Rocket also tapped Couche-Tard’s VP and controller, Guillaume Leger, to join its board of directors.
