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  • Food & Beverage
Shop Talk
April 1, 2020

COVID and Food Delivery: Paradigm Shifts in Foodservice in the Midst of the Pandemic

MHT Partners  | Consumer Investment Bank

It is evident that the COVID-19 pandemic is wreaking havoc on the foodservice economy, with multitudes of local restaurants struggling as diners are staying home, forcing restaurants to limit service to takeout and delivery options. As COVID-19 started to spread globally, as of early March, the OpenTable reservation system reported that year-over-year seated diners were down by 20%, and reservations obviously ground to a halt by the end of the month. However, delivery services such as DoorDash, Postmates, and Grubhub, which have already been disrupting the way American diners approach restaurant dining over the last few years, are now providing a critical lifeline for individuals that don’t want to venture from their homes to go grocery shopping or pick up food and for restaurants not equipped to offer their own delivery. In fact, these services are now offering “no contact” delivery options, where meals are left for customers on the doorstep without any physical contact with the driver. While data is evolving realtime in the fluid environment surrounding the COVID pandemic, U.S. engagement in food and drink apps, including restaurant and grocery delivery, was up 15% in early March as cases began to rise, and this will likely increase as data from subsequent weeks will capture more of the restrictions taking effect and driving demand for delivery.(1)

Will this uptick in food delivery last, representing a paradigm shift in the way consumers engage with restaurants? Right now, delivery services offer a way for local restaurants to remain in business and reach their loyal consumers, and it is clear that these restaurant delivery business models are well positioned in the current environment. As consumers who previously did not use these services embrace them during the pandemic, and as diners potentially eschew eating out for the foreseeable future to avoid crowds, it is possible that these services will gain an increasing share of the American dining dollar permanently.

Additionally, restaurants are getting creative in engaging with consumers during the pandemic and shifting their menu options as well to cater to the takeout and delivery market. In some states, such as California, Colorado, and Texas, among others, laws around selling alcohol “to go” and its delivery are being relaxed, affording opportunities for restaurants to capitalize on higher margin alcohol sales during this unique time. Given the historical complexity of state-by-state laws around alcohol sales, it will be interesting to see if these changes are adopted for the long term, potentially opening the possibility for at-home delivery of cocktails permanently.

Beyond cocktails-to-go, some restaurants are shifting menus to “family-style” meals for takeout or pickup. These changes in menu structure are in part to target families quarantined together (one ancillary benefit to shelter-in-place restrictions is perhaps the resurgence of the shared family dinner, without the pressure of school and work commitments that characterize the typical American week), as well as to streamline kitchen operations and required ingredients in these uncertain times. As the restrictions are eventually lifted, it will be interesting to see how many restaurants continue to offer these family-style meals as standard options.

As consumer investment bankers, we are keenly following the evolution of the food-and-beverage and restaurant-and-retail landscapes in the age of COVID-19, and specifically which changes may be here to stay as a result of the global pandemic. For further discussion around the trajectory of consumer M&A and the current market environment, please feel free to reach out to us (Craig Lawson,, Patrick Crocker,, Gavin Daniels,, Tara Smith,, or Tom Gotsch,


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