Just Eat Takeaway.com Gobbling Up GrubHub 

Food delivery service growth continues in North America and Europe, and big players are finding strength in merging. The latest acquisition has Just Eat Takeaway.com gobbling up GrubHub. And oh what a merger this will be!

With mergers and acquisitions in the food delivery industry on the rise, who will end up victorious? There are movers and shakers leading the parade of midnight munchies. Let’s see where they’re headed and why.

Using Artificial Intelligence (AI) -driven consumer and market research, we will explore:

  • Companies gobbling up competition in a worldwide game of ‘King of The Hill’
  • How now is possibly the best time to think about merging, as consumers aren’t keeping loyalties within food delivery services
  • How to turn loss into a win with next generation AI

And there are lots of moving parts in this mergers and acquisitions story, so we have statistics to keep in mind, including:

  • $26.5 billion: the total value of online food deliveries expected in 2020
  • UberEATS was the most popular app, followed by GrubHub and DoorDash.
  • GrubHub holds 24% of all market share
  • The average person has two food delivery apps on their smartphone
  • 78% of US food delivery orders are placed via the restaurant itself, compared to 22% through third-party services

And it’s important to note: Although food delivery has been in demand, it has been struggling. They’re trying to out-do one another, offering deals to capture the monopoly of customers. And this struggle that has led to merging these two major players in the food delivery industry.

Dutch Food Delivery Expansion

The average consumer has two food delivery apps on their smartphone and little to no loyalty to one over the other. So, it’s an awareness race, and a merger certainly helps get a food app on more users’ smartphones!

This is why GrubHub, who recently held 24% market share, has a new daddy, Dutch food delivery company Just Eat Takeaway.com (JET).

This move wasn’t without controversy.

Previously, JET has acted as a software provider that enables restaurants to take orders and make their own deliveries. They haven’t been a third-party delivery platform until now. Additionally GrubHub has experienced loss in profit margins since 2015, and this fact has JET shareholders concerned about the merge.

Acknowledging the uphill battle, Jitse Groen, CEO of Just Eat Takeaway, believes in putting marketplace first, and a delivery platform on the side. And research backs up his thinking – 78% of US food delivery orders are placed via the restaurant itself, compared to 22% through third-party services such as GrubHub.

Looking at the graph below, we can see the growth of various food delivery services. While some like Uber Eats have increased revenue, GrubHub has maintained, but not shown significant growth.

meal-delivery-stats

However, all press is good press and looking at Share of Voice ranked against competitors, GrubHub has the least negative sentiment and a large share of positive mentions.

food-delivery-share-of-voice

There may be a hidden up-side to GrubHub and the Danish delivery union after all! Positive sentiment shows GrubHub is doing something overwhelmingly right. And undoubtedly its something JET plans to capitalize on.

And it leaves one wondering what other happy marriages could the food delivery world see?

Ripe for Meaty Mergers

The time could be ripe for meaty mergers, especially with $26.5 billion expected in food deliveries in 2020. And between 2018 and 2019 there were 25 mergers and acquisitions in food delivery, valued at a combined $20.12 billion.

The conversation cluster shows where these merges are being talked about and how they interact with one another.

Uber-conversational-clusters

The timeline view helps us view top conversations more clearly. Food Delivery Mergers (marked in purple) was hot to trot in the summer of 2019, but it’s wilted a bit in the sun, whereas Uber stock has picked up momentum, a sign of things happening…or to come?

Uber-stock-timeline-view

We can also view which companies are investing in mergers, and how much. At the top is Duff & Phelps Corporation, a global valuation and corporate finance advisor who focuses on various industries, including food and restaurants.

heat-map-by-company-investment

And mergers are happening all over, even outside of delivery.

Food in general is experiencing an overhaul. This graph from Statista gives us a clear picture of the different food and beverage segments experience merger and acquisition traffic. Alcoholic Beverages and Agricultural Products lead the pack, but there are numerous areas to monitor:

food-and-beverage-segments

And savvy brands who aren’t merging are partnering up in a different way. DoorDash teamed up with Little Caesars Pizza and McDonalds. This was a bit of a blow to Uber Eats, as they previously were the only food delivery service partnered with the golden arches.

And when it rains it pours, as Uber Eats was the original choice for buying out GrubHub, which would have given them 55% market share. Pesky antitrust laws made the option too risky to move forward.

Don’t worry too much over Uber though, as they have other options . . .

Uber Exploring Other Options

Although the partnership between JET and GrubHub will take up a large portion of online delivery services, Uber Eats is still the number one app. Its consumers are pleased, citing it as delicious, great and a favorite, along with a healthy serving of mostly positive sentiment:

Uber-eats-consumer-sentiment

Has Uber found other food delivery options available to invest in? With market intelligence, they could explore the white space, identifying opportunities others will miss.

Looking at news and blogs mentioning Food Delivery Merger, one article there shines an investment light on India’s food delivery service Swiggy, for example. And this is one of 251 stories on this topic – articles by those in the “food delivery merger” know, who may have already done a good bit of the legwork for Uber:

food-delivery-merger-potential

Uber has holdings worldwide, after all, so why not India? From Mumbai to Tel-Aviv, Uber is everywhere, and likely looking for its next adventure.

Is your company similarly positioned, with a balance sheet primed for acquisitions? Or maybe the one seeking to be acquired? Use the best-in-class next gen AI powered social analytics and market research to inform your next M&A decision. It’s an opportunity (or many opportunities) lost, not to! Reach out for a demo!

Related Posts

Share This