ezCater Brings No Risks, High Rewards to Restaurants
Briscoe Rodgers, president of online catering site ezCater, says the marketplace of online food ordering has really heated up in the past couple of years.
Last week, ezCater announced its seed round financing of $630,000. Rodgers says the number of caterers receiving orders from the site has doubled in the past two months, from 800 to 1,600 today.
He jokes that perhaps ezCater popped up at the right time and place, and he may have a point.
The statistics don’t lie: In 2009, this marketplace, which also includes companies such as GrubHub, Seamless, and Foodler, was worth $300 million. That number rose to $400 million in 2010, and in 2011, nearly doubled to $700 million.
If online food ordering continues its exponential growth, the industry will see the likes of $1.4 billion in revenue in 2012.
“In the long run, we believe that both private restaurant sites and marketplace sites like ezCater will be successful, the same way that AmericanAirlines.com and Expedia.com are both successful,” Rodgers says.
ezCater allows users to enter their location and select from a list of nearby restaurants that offer catering services. The website lists delivery fees, the minimum order size, user reviews and ratings, and operational hours.
Rodgers explains that there is no cost, monthly or other, for a caterer or restaurant to join ezCater. A restaurant faxes its menu over and ezCater begins sending over orders, with a small commission.
“It’s a no-risk way of increasing [restaurants’] revenue,” Rodgers says. “It’s incremental orders that they otherwise wouldn’t have gotten. The customers are coming to our site because they don’t know who to call, they don’t know a caterer in the area … So the restaurant or caterer that’s receiving the order is getting if from a customer that didn’t know about them. It’s all about getting more revenue.”
As far as the response ezCater has received from customers, Briscoe says 90 percent of people who used the service a year ago used it last month. With a nine out of 10 retention rate, he is hopeful about the upcoming growth for his service.
“There’s a lot of online food-ordering sites, like Foodler, but those tend to be focused on downtown areas and they tend to have pizza places and sub shops, which is fine for consumers, but not good if you need $200-300 worth of food brought into an office meeting three days from now at a very specific time,” Rodgers says. “That’s a different sort of restaurant or caterer.”
With 1,600 caterers now on board, Briscoe is looking at expansive growth. “We’d like to get to 8,000 caterers over the next 12 months,” he says. “If we continue on our current path, I think we’ll make it!”
By Sonya Chudgar