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This research looks at the current situation of the emerging food sharing startup
ventures with the use of the available reports and data. At first, the general
definition of the global sharing economy and the UK market situation is analyzed in
order to have a broad understating of the current situation of the market. Moreover,
2013 report The State of the Sharing Economy is evaluated in order to assess the
customer behavior of the UK consumers. The UK is a promising market for sharing
ventures as the number of startups are increasing dramatically. The people
surveyed in the UK market has a growing interest in the food sharing activities
whilst the economic recession period was forcing people to be more prudent about
their kitchen expenses. Another aspect of the sharing economy is the regulations
and the trust of the customers to the services. The new insurance policy of
incumbent firms of sharing economy such as Uber and Airbnb leads the increase of
the customer confidence about services. The UK regulations and hygiene rules
released by Food Standards Agency are legally binding any business which relies on
homemade foods. Finally, the potential competition against the conventional
restaurants and the available meal sharing services are assessed in order to realize
the level of barriers to enter the market. The UK restaurant market forecast for next
four years demonstrates the steady growth in the market which offers opportunities
for new meal sharing ventures to grow their businesses. Most of the available
services havent been able to reach high number of customers all around the world
and the market seems to be infant comparing with lodging and ride sharing
practices.
Contents
Abstract...................................................................................................................... 1
EMERGING SHARING ACONOMY AND THE STATE OF MEAL SHARING VENTURES........3
Defining Sharing Economy and the UK Market...........................................................3
Consumer behavior.................................................................................................... 5
The State of the Sharing Economy and Food Sharing in the UK...........................5
Taste Trends......................................................................................................... 7
Customer Satisfaction.......................................................................................... 8
Regulations and Legal Issues...................................................................................... 8
Food regulations in the UK...................................................................................... 9
UK Food Industry...................................................................................................... 10
Restaurant and Dining Services Market.................................................................10
Current Ventures and Competitors...........................................................................12
Eatwith.................................................................................................................. 12
Cookening............................................................................................................. 13
Mealsharing........................................................................................................... 14
Bonappetour.......................................................................................................... 14
Current Business Climate of Meal Sharing................................................................15
Business Canvas of Current Ventures....................................................................15
SWOT Analysis of Current Ventures.......................................................................17
Strengths............................................................................................................ 17
Weaknesses....................................................................................................... 18
Opportunities..................................................................................................... 18
Threats............................................................................................................... 18
Porters Five Forces Framework for Meal Sharing..................................................19
Threat of new entrants....................................................................................... 19
Bargaining power of suppliers............................................................................19
Rivalry among existing competitors...................................................................20
Threat of substitute products and services........................................................20
New verticals [in the sharing economy] such as food and fashion are emerging to
sit alongside accommodation, transport, finance and skills.
Debbie Wosskow, CEO of Love Home Swap, Chair of the UK Governments
independent review of the sharing economy
Consumer behavior
While people survive without communities, the thinner their community bonds, the
more alienated and unreasoning they tend to be (Etzioni, Amitai 1996).
Figure 4: Food prices and income after housing cost in the UK (Department for
Environment, Food, and Rural Affairs 2016)
The main reason of economic benefits as a customer behavior of food sharing is
mostly depending on the increasing deficit between food prices and income after
housing costs from 2005 to 2013. It could be interpreted that economic difficulties
force consumers in the UK to be more efficient to save money and even make
money out of sharing practices. Many of the sharing and collaborative consumption
organizations that currently exist benefitted from the economic collapse that began
in 2008 that caused some consumers to lose their homes, cars, and investments
and made most everyone more price sensitive (Belk,Russell 2014).The
macroeconomic factors seem to play an important role in driving the growth of the
sharing economy. Many researchers point out that the new trend toward
collaborative consumption started to gain momentum as a response to the global
financial crisis and an attempt to fight over-consumption. It seems it is inevitable to
see the increasing importance of the sharing economy because of the current
economic recession period.
The rise of social media and online networking in an age of financial crises and
austerity has given birth to the sharing economy, which is rapidly spreading across
various consumption areas. In many ways, this resonates with the Big Society idea
pushed by the UK coalition government. Leaving aside earning or saving money as
one driver of the sharing economy phenomenon, a renewed belief in the
importance of community, as well as the global recession, which has fundamentally
shocked consumer behaviors, is among the key drivers (Opinium Research 2015).
Taste Trends
Taste movements are diverse and unpredictable and it is a crucial point that the
food industry is a market which always rely on the latest demands to keep
competitive on the market. UK market are becoming more open to various tastes in
their food choices and as a result of this market is progressively demonstrative of
different cuisines. Ethnic foods are more and more becoming popular, as seen from
the success of Indian restaurants moreover the rise of Thai and Indonesian
restaurants. According to Kantar Medias Target Group Index survey, as many as
23% of respondents claimed to have visited an Indian restaurant at least once
between July 2013 and June 2014, while 5.9% visited a Thai or Indonesian
restaurant in this timeframe (Key Note 2015).
The trend in the UK market progressively moving to authentic cuisines which also
positively affect the meal sharing services since their unique business model offers
various kind of world cuisines. The target customer group is looking for original
home-made cook which the meal sharing services provides. The Uk market has a
big opportunity in terms of food trends.
Customer Satisfaction
According to the report of Key Note (2015) customer satisfaction in the UK
restaurant market is declining. From 2014 to 2015 the rating of customer
satisfaction decreased 2.6% point. This rating decline demonstrates a big problem
about the traditional restaurant services which depends on the dissatisfaction of
demand and expectations deficit. This seems to make positive impact on current
meal sharing market players, if the innovative business model could meet customer
needs.
Trust used to be the main building block of the initially sharing establishments, but
currently, it is essential to have insurance between customers. Insurance is the
basic problem solver against legal issues. Insurance is crucial to making the sharing
economy work for everyone. In the UK, the British Insurance Brokers Association
issued guidelines to the industry in providing insurance to sharing economy
businesses. MS and the Commission should investigate EU-wide cooperation with
the insurance industry to ensure sharing economy service providers have access to
insurance and to increase clarity on questions of liability (Department for business
innovation and skills 2015).
Food sharing ventures taking an insurance policy seriously as the next step towards
trust issue and improving their services. Such as Feastly one such a platform,
connecting adventurous eaters with passionate cooks, and making it easier for
cooks to market and host meals in their homes. (Nina Meijers 2014). Feastly
recently added a $1 million insurance policy protecting cooks in cases of food illness
or property damage. Insurance has been a big concern for peer-to-peer
marketplaces (Airbnb, for example, recently rolled out $1 million liability insurance
on top of its $1 million Host Guarantee in the case of property damage), but Feastly
stated that P2P food startups havent offered anything like this before (Anthony Ha
2014).
UK Food Industry
The UK foodservice sector was valued at 46.6bn in 2014. The UK foodservice
sector is experiencing growth across the UK for the first time in several years, with a
growth forecast of between 1.1% and 3.2% for 2015. Consumers in the UK are
increasingly requesting in their food choices seeking greater healthy dietary. Food
providing services will need to transform their selves in order to satisfy market
needs. Additionally, decreasing unemployment rates and rising wages are expected
to increase consumer spending and aid foodservice sector growth, with growth rates
between 1.1% and 3.2% forecast (Ten Live Group 2015).
UK food service industry is growing ever since 2008 economic recession period and
forecasts demonstrate increasing demand in the food industry. Customers are open
to innovative startups as healthy nutrition lifestyle increasing its popularity.
Customer demand for diversity of cuisine leads the market to offer a different kind
of foods.
Cookening
Cookening is a new startup that aims to be Airbnb for meal sharing/social dining
that provides hosts to serve social dining experience and food seekers to have
home-cooked meals. The startup allows to experience a special chance especially
for travelers to have authentic, local cuisine and for the hosts to meet new people
around the world. The range of the meals range from 5 to 50 euros depending on
the choice and it includes a transactional fee of 17% that goes to the Cookening.
Mealsharing
Meal sharing is a startup which is based on the website with the same idea of
cookening. The website allows food seekers to search for home cooked meals and
hosts are posting their meals all around the world. Hosts arrange time and date and
price for the meal and more than this website is user-friendly and allows customers
to request another date.
Bonappetour
Singapore-based startup Bonappetour was founded in 2013 with a total equity
funding of $575,000 and raised a seed funding round worth $500,000. Travelers can
find hosts in over 75 cities around the world. it has more than 500 verified hosts.
The target customer segment is mainly travelers who seeks cultural interactions
with convenient prices. As the target market comprises highly price sensitive
customers, ventures aims to make their transaction fee percentage as low as
possible to reach more customers. The main problem about the revenue streams is
to avoid customers to have transactions offline to protect business model. In order
to discourage offline transactions transaction fee strategy plays an important role to
sustain business.
In order to deliver its value proposition, current ventures cost mostly goes to
technology infrastructure such as network security, hosting and maintenance of
online services. Moreover, customer support and marketing are another major
channel for current ventures. The companys major part of total costs also goes to
its, marketing and sales function. The customer support mainly generates cost for
hiring skilled employees.
Trust is at the heart of the Business model of sharing services. The value creation
structure of the business model is demonstrated as figure 8. Reputation, social
presence and benevolence creates the trust to the services which then reduces the
perceived risk to lead customers to have a participation on the services. Another
aspect of the meal sharing behavior is the social and economic benefits that
perceived by the users.
Peer to Peer meal sharing business model that allows the local people to earn
money and visitors to experience local food.
Highly motivated, innovative investors who believes the idea of meal sharing.
Weaknesses
Lack of ability to fit to various local legal frameworks which already defined
before the launching of businesses.
All of the current ventures have not a wide spread customer network all
around the world from different geographies. Most of them has a market with
local limited area.
Opportunities
Current economic situation guarantees that customers are looking for the
most convenient prices for food. Most of the travelers are in need of local
social and cultural experiences.
The meal sharing economy is still a niche market comparing with lodging and
car sharing services such as Airbnb and Uber which
Researches show that the Internet and mobile services usage is expected to
grow for the next years which leads more people to contribute to current
ventures.
Mobile applications and web sites allow people to reach easily from anywhere
around the world which provides to have a potential global business.
Potential network effect for growth makes marketing easier to reach more
customers with word-of-mouth.
Threats
Pressure from local governments to have more taxes from each transaction.
The ease of copying business model and online applications allows more
competitors to enter the market.
Disruptive Innovation
Disruptive innovations happen when a minor venture with small capital effectively
achieves market share among conventional incumbent companies. Generally,
incumbent firms consider on exceeding their services for their greatest profitable
customers, they improve the needs of some parts of their business and ignore the
needs of others.
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