Trends are important in any sectors. Today, they affect companies, as well as those investing in them, either directly or through financial markets. It can be very enticing to move into an industry that sees a great increase. But the danger is that they are bound to go back down, moving back towards a certain normality, at some point in time. Will food delivery remain a good market to invest in or to start a business, post-COVID-19? Here is an overall view of what could come next.
A Temporary Explosion of Food Delivery Services
It is true, in most countries of the world, that there has never been so many bicycles and motorcycles, seen on the streets, with a food warmer on the back. The pandemic has launched businesses, skyrocketing their revenues, while bringing more investors into their fold. That is particularly true inside the sector of food delivery. If you have never heard of Deliveroo, you have been away from the streets for too long now. Their pastel blue colour can be seen rolling around towns, everywhere. But they also have strong competitors in Uber Eats and many other names, that have grown, during the sanitary crisis.
Such a quick expansion begs the question: Is this situation sustainable? And the answer is: Probably not. The food delivery service filled an increasing need, throughout the coronavirus lockdowns. Since people couldn’t go out to restaurants, to eat, they ordered out many more times than they would, in normal circumstances. But now that the restrictions are being eased-down, most people only want to go back out and spend some time with friends in restaurants. Therefore, there can only be a reduction in the demand, that should take place gradually, over the coming months.
Is a repositioning of the Market coming-up?
It is fair to assume that the companies which have established themselves during the crisis, won’t suddenly fold. The best ones have already prepared for the future, knowing full-well that this situation would not last forever. Therefore, they have made deals with grocery stores and other food markets, in order to deliver their products to customers, in addition to the restaurants they already worked with.
Yet, there will not be enough space in the market for everyone to go on. The smallest ones will either reinvent themselves entirely or simply close down. To invest in such a business today would be considered dangerous, unless you plan to partner with one of the big players. They are always looking for new drivers to deliver the food. Therefore, you could find an opening in this sector if you were able to guarantee them a constant flow of delivery persons.
Investing in Food Delivery instead of starting a Business
If you would rather invest, then make sure you do so for the long term, as the short one might be turbulent, at best. There is absolutely no reason why food delivery would remain as strong as it has been, at least during the summer. However, if you are willing to invest, it might be a small risk. Companies like Deliveroo may lose a little, as the world goes back to a somewhat regular life, but they are now an established company and should remain so, in the foreseeable future.
There is always a small possibility that with the arrival of fall, in a few months, and even more so in winter time, another wave of coronavirus hits, that necessitates new measures. Were that the case, the money placed on the company could suddenly create more, as the share would rise suddenly. That is a real possibility, which certain investing firms are taking in account, when consulting for their clients.
Conclusion
To say that a certain level of the unknown will remain in the air, for a few years, is not far fetch. In fact, the contrary would seem so. There is no predicting the near-future today, with all the variants of the virus being created and the fact that we don’t know if the vaccines will protect us from all of them.
If you believe in trends, then maybe you need to look for the next one, instead of the food delivery business. If we managed to beat the pandemic for good, there will be lots of money that was saved during the lockdowns, to be spent by many. It’s a great time to stay afloat on the latest news, and pick tomorrow’s industry sectors.
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