Digital Transformation in Foodservice: Interview with Sergio Osona from Deliverect Iberia

In the digital era, the food service sector has been hit by a storm of change, with food delivery services emerging as a key player. The food service landscape in Spain has seen a remarkable evolution, becoming an essential pillar of the national GDP. Following rapid growth post-pandemic, 2023 marks a stabilization phase, though not without challenges. Inflation and rising costs of raw materials have squeezed restaurant profit margins, leading to higher prices and, as a result, decreased demand. Moreover, the industry faces a significant labor shortage, complicating hiring and employee retention.

According to a recent study by Just Eat, the food delivery sector in Spain closed 2022 with revenues of 1.12 billion euros, projecting robust growth to reach 1.68 billion euros by 2027. This evolution reflects the sector's adaptation to changing consumer preferences and the incorporation of innovative technologies.

We had the privilege of discussing these issues with Sergio Osona, General Manager of Deliverect Iberia. Sergio shared his insights on the current state of Spain's food service industry, highlighting how technological solutions are reshaping the sector.

Sergio Osona on Spain's Food Service Industry Today

When asked about his view on the current food service landscape in Spain, Sergio Osona commented, "The current landscape of the food service industry in Spain is healthy and is one of the pillars of our country's GDP. We've seen rapid growth since the end of the pandemic, which is now stabilizing in 2023, facing some clear challenges and difficulties."

"The first challenge to mention is related to inflation and the rise in raw material costs, which severely narrows the margins of restaurants, forcing them to raise prices and consequently decreasing demand," added Sergio.

ECONOMIC CONTEXT IN SPAIN

• Bars and restaurants in Spain have increased their prices by an average of 3.4% due to inflation and rising costs of raw materials and energy (RTVE).

• The prices of cereal and dairy products have risen, making a pizza 10% more expensive now than in January 2020 (Food Retail).

• The cost of eggs has increased by 100% and milk by more than 70%, impacting restaurant prices (El País).

• Inflation in Spain reached a record level of 9.8% in the Consumer Price Index (CPI), affecting the cost of food and basic goods (RTVE).

Sergio Osona also pointed out another recurring problem: a significant labor shortage. It's challenging to find staff and to retain them. He noted that within the food service industry itself, marked especially by the advancement of digitalization and the professionalization of the sector, there's been exponential growth in organized food service compared to independent food service. Independent food service is suffering a lot due to being unable to adapt to new market realities and technologies and a certain resistance to professionalizing their business. In contrast, the weight of organized food service in Spain has grown more than double in less than five years. The trend is likely to continue in this direction, moving us closer to the model that governs other markets like the Anglo-Saxon ones, where the weight of organized food service can even exceed 50% of the gross business of the country.

Sergio also highlighted another recurring problem: a significant labor shortage. "It's challenging to find and retain staff," he said.

Trends in the Food Service Industry in Spain

Sergio Osona noted the exponential growth of organized food service over independent establishments, mainly due to digitalization and sector professionalization. Independent establishments are struggling to adapt to new market realities and technologies and resisting business professionalization. Conversely, organized food service in Spain has doubled in less than five years. The trend is expected to continue, moving towards models prevalent in other markets like Anglo-Saxon, where organized food service can exceed 50% of the country's gross business.

Frequent Trends Observed by Sergio Osona

"The main trends include the rapid growth of technological solutions, such as online ordering, which used to be exclusive to home delivery or kiosks in large chains. Now, all types of restaurants are implementing these digital solutions to order and pay directly from the table, saving costs and addressing the staff shortage issue," explained Sergio.

Regarding operations, there's a trend towards businesses exploiting their own channels, like creating individual restaurant websites and moving business from delivery platforms to the restaurant's own channels. This is crucial for customer loyalty programs. Another rising trend is customer loyalty, facilitated by new channels like Social Media Ordering.

In business, linked to the rise of organized food service, we see movements in terms of mergers or acquisitions, either among national groups, like the recent case of Lateral and Food Box or acquiring established brands abroad by Spanish restaurant groups, such as Ibersol with Pret a Manger.

The Role of Technology in These Trends

"Implementing digital tools without integration doesn't make much sense, so all solutions that automate processes or integrate digital tools are essential," said Sergio Osona.

"Technological solutions like Deliverect, which help integrate online orders from different channels with the Point of Sale Terminal (POS), with delivery fleets, and with your Business Intelligence system if you have one, are fundamental."

Closing thoughts

The interview with Sergio Osona presents a reflective and adaptive landscape in Spain's food service sector. The challenges, including inflation and rising raw material costs, are shaping the industry, driving the evolution towards more sustainable and efficient business models. Digitalization, the adoption of own channels, and a focus on customer loyalty are trends that respond to current challenges and capitalize on emerging opportunities in a dynamic market. Osona's perspective underscores the importance of adaptation and innovation, suggesting that the path to recovery while challenging, is filled with opportunities for those willing to evolve. In this transformative context, Deliverect's solutions are valuable resources in transitioning to a more resilient and market-adapted food service model in Spain.

About Sergio Osona

Sergio Osona is the General Manager for Iberia at Deliverect. He leads a fast-growing team across commercial, technical, and customer service functions, helping thousands of large and small restaurants throughout Spain and Portugal to thrive and grow. Joining Deliverect in January 2020, Sergio brought over a decade of experience in Food Tech startups, notably his over five years at Resto-In. With his current role at Deliverect, Sergio has become one of Spain's most reputed experts in the Food Delivery space.