Restaurant delivery gains fast following in Sioux Falls

Nov. 5, 2018

By the end of this year, the Minneapolis-based food delivery service Bite Squad will have launched in close to 50 markets.

Sioux Falls holds the record for its biggest grand opening, which offered diners free delivery for a year if they tried the service in late September.

“It was our fastest-growing grand-opening weekend,” chief marketing officer Craig Key said.

“It shows it’s a town that cares about food.”

Sioux Falls has embraced the growing food delivery trend in a big way, those in the industry said.

Bite Squad offers delivery services from 28 restaurants and counting.

Competitor Food Dudes Delivery, which is based in St. Cloud, Minn., and came to Sioux Falls a few years ago, is launching additional restaurants this week to total more than 40 options.

“And I have meetings with several more,” franchisee Megan Culver said. “The growth is definitely there, and we’ve only scratched the surface in Sioux Falls.”

Their success appears to be following an industry movement.

Eighty-six percent of consumers are using off-premise services at least monthly, according to food industry consulting firm Technomic, and one in three are using it more than they did last year.

The firm projects food delivery will grow 12 percent annually over the next five years.

“I believe delivery is going to be a substantial part of just about every restaurant’s business if you fast-forward three or four years,” Key said.

Early experience

When manager Kelsey Anderson starts service with Bite Squad at All Day Cafe at 11 a.m., he usually gets a few orders right away.

“It’s breakfast burritos and French toast,” he said.

Around lunch, large orders typically mean office deliveries. Dinner is the most popular time for delivery orders. They come in through a tablet and are treated like to-go orders. Salad dressings are packaged up. It has been busy enough since adding Bite Squad about six weeks ago that the restaurant started buying ketchup and mayonnaise packets.

“My business level inside the restaurant hasn’t gone down, so this is only helping,” Anderson said. “The first time it rained or got cold, we did about $800 in sales. That thing was beeping like crazy.”

If things get too busy or the restaurant runs out of an item, the system can be turned off or adjusted.

“We set how much time we think it will take based on our business level. They show up, we close out the ticket and hand them the bag,” Anderson said. “The drivers are all nice people and in uniform. I can’t complain about it.”

At Bread & Circus Sandwich Kitchen, co-owner Barry Putzke uses both Bite Squad and Food Dudes.

“We started Food Dudes around the beginning of the year. We were in the midst of our first winter, realizing how slow everything was and looking for another opportunity to get our product in front of people,” he said. “It was a little slow getting started, but it slowly built.”

In recent months, it has grown.

“Overall, the total delivery business has gone up more than double since Bite Squad came, and it’s not just Bite Squad. More people are aware they have delivery options,” he said. “I have a feeling it’s going to get pretty busy.”

Restaurants pay a portion of the revenue generated to the delivery services. Customers also pay a service or delivery fee and often have to meet minimum ordering amounts. Bite Squad offers unlimited delivery within a 4-mile radius of a customer’s home for $6 per month.

Putzke includes coupons with his delivery orders for 10 percent off if customers come into the restaurant for their next meal.

“We’ve seen a couple,” he said. “One of the big drivers for us was getting our food in front of people who wouldn’t normally come downtown. I’m sure we have had new customers, and hopefully it will bring them into the restaurant, which is the ultimate goal. It’s expensive for us to do delivery, so hopefully it’s offset by getting new fans of the food who will come to the restaurant.”

Adding to business

JJ’s Wine, Spirits & Cigars saw food delivery as a way to bring multiple restaurant options to its customers.

Owner Tom Slattery worked with Food Dudes to offer $5 off a customer’s first delivery at JJ’s.

The idea is to give customers the chance to order a meal while they sip on beverages at JJ’s cocktail lounge.

“We see a lot of PizzaRev and Shahi Palace,” Slattery said. “But it’s kind of across the board. We allow pizza delivery as well, and Marco’s is probably the most prominent.”

Since he has added more small plates, delivery hasn’t been as robust, but customers still use it.

“Most people want something to snack on, but some have dinner delivered once or twice a week,” Slattery said. “We just want them to hang out in our cool bar.”

About 60 percent of restaurant operators surveyed by Technomic say delivery has generated incremental sales. Eleven percent said it has affected dine-in business, and 7 percent felt it impacted takeout sales.

Both delivery businesses in Sioux Falls said their growth means they constantly are hiring. Drivers can work flexible schedules and often choose when they work. It’s a part-time job for most and especially popular with college students.

“I would say Sioux Falls seems like a really strong market. The restaurant selection is great,” Key said.

“We believe this time next year we’ll be at 50 percent penetration with the restaurants there, and down the road we’ll be close to 100 percent.”

Dining data

With online ordering comes a wealth of restaurant-related data.

For instance, Bite Squad was able to share the top five most popular meals ordered by Sioux Falls diners since the service launched. They are:

  • Family Pack 2 from BackYard Grill (Two pounds of meat, three sides, five pieces of corn bread, eight buns).
  • Chicken Tikka Masala from Everest Indian Cuisine.
  • Sweet Ginger Chicken Salad from All Day Cafe.
  • Campechano Burrito from Giliberto’s Mexican Taco Shop.
  • Cajun Chicken Pasta from Swamp Daddy’s Cajun Kitchen.

Popular restaurants for Food Dudes include Tokyo Japanese Cuisine on 57th Street and Louise Avenue, Shahi Palace, Royal Palace and Jacky’s.

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Restaurant delivery gains fast following in Sioux Falls

Sioux Falls set a Bite Squad record for busiest launch, and our appetite for food delivery is growing. We explore the trend and bring you the top most-ordered meals so far.

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