What you need to know:

• Menulog (known as Just Eat outside of Australia) posted global Q4 order growth of 57%. But Australia is flying, up 166% YoY.
• CMO Simon Cheng says the platform aims to eat into share of rivals Uber Eats, Deliveroo and Hello Fresh to become market leader and a “global super brand”.
• Cheng says Covid has accelerated market commoditisation by 2-3 years.
• That means all platforms service the same restaurants, and most users have multiple delivery apps.
• So the battleground is on fees, service and “mental availability”, as coined by Professor Byron Sharp, of the Ehrenberg Bass Institute for Marketing Science.
• Menulog backs big ads, traditional media and NRL sponsorships to achieve share of mind and drive demand.
• Fronting campaigns with Snoop Dogg has delivered cut-through and brought younger buyers to the formerly family oriented platform.
• Pre-Covid, the platform made “big bets” on underpinning infrastructure, including its own fleet, while pulling hard on pricing levers to keep fees and commissions below competitors. These bets are paying off.
• Menulog helps restaurant partners plan ‘dark kitchens’, but Cheng says it won’t set up industrial kitchens in competition, unlike some aggregator platforms.

Still hungry

Simon Cheng started out as an ad agency mailman. He’s still handling dispatch, only now at scale for a platform bidding to become a “global super brand”. Menulog aims to eclipse the likes of Uber and Deliveroo to become the world’s biggest food delivery service. While Cheng won’t put a time limit on that plan, it’s fair to say the meter’s running: “Ask me again in six to 12 months,” he suggests.

To get there, the one-time agency suit is backing ‘old school’ creativity and media channels – TV, radio and out of home – to deliver cut-through, growth and retention in a market where commodification and consolidation have accelerated sharply over the pandemic.

Cheng says the “big bets” the company made in underpinning infrastructure prior to Covid are also paying dividend. Globally, fourth quarter orders increased 57% year on year. In Australia, they are up 166%, with the traditional summer drop off nowhere to be seen.

Thanks to those bets – investing in its delivery fleet, a major push to sign-up restaurants, keeping fees below the competition and going all out with advertising in partnership with McCann Australia to gain share of mind – Menulog was already experiencing double digit growth pre-Covid.

When the pandemic struck, that became triple digit growth almost overnight, says Cheng, with Menulog working with restaurant partners to convert front of house staff to delivery drivers. That strategy meant restaurants stayed open, people kept jobs and Menulog could keep pace with runaway demand. The plan for this year, says Cheng, is to keep feeding Australia’s seemingly insatiable appetite – not just three square meals a day, but whenever and wherever hunger strikes.

Food fight

Even as restrictions ease, growth has remained strong because so many people got used to using delivery platforms during the pandemic (Cheng thinks "close to half" of households have used a delivery app at least once). 

Similarly, most restaurants are now signed up to at least one platform – and often all of them. Meanwhile, customers usually have more than one delivery app, which means aggregators must compete even harder on service and experience. That battle was always coming, says Cheng, but Covid squeezed years of commodification into a couple of months.

“Since the pandemic, the number of users who now have multiple apps on their phone has increased: Four out of five people who use a food delivery service have multiple apps on their on their phone,” he says. “That makes differentiation even harder. It becomes a mental availability game.”

Hence Menulog going all out with sponsorship and advertising - and while Cheng thinks some of Byron Sharp’s theories may be “a bit extreme”, he’s a big believer in the availability aspect.

TV dinner

“Mental availability is built through reaching as many people as possible as consistently as possible and at a regular frequency,” says Cheng. “These are textbook definitions, but we certainly subscribe to that. We are a tech business, a digital pure-play but we invest a lot in traditional channels – TV, outdoor and radio – because we believe they are very successful in building mental availability. They are still one of the most effective ways to reach a mass audience and gain the attention of mass audiences.”

The brand also invests heavily in performance media, using search and social to convert demand.

“Performance is just as important to us. There is no point investing in creating all of this demand if you are not then capturing it, which is why we take a balanced approach to brand and performance … Each of those channels play a different part.”

The brand therefore takes a “total screens approach”. But at the top end of the funnel, Cheng says some channels offer greater value than others.

“If you were to look at something like YouTube and Google you could probably argue that that they have much higher reach than some of these other channels. But the attention [within] those channels is a lot harder to build brands with,” Cheng suggests.

“That's why we continue to invest so much in traditional channels like TV and BVOD … and you could actually argue BVOD is a more premium channel than linear TV.”

Radio, meanwhile, has been a frequency outlet – and a perfect partner to Snoop Dogg’s unmistakable drawl.

“Launching a campaign with a major celebrity in Snoop Dogg and not using the audio medium to promote it would really be missing a trick,” says Cheng. “The jingle itself has actually become a major brand asset for us.”

He thinks results bear out the big brand approach.

“It’s not rocket science. Growth is about acquiring customers and retaining them. You learn that at university. We have a very strong focus on both. Many businesses can get quite distracted from the bigger picture. But we know what it takes to grow and we are just relentless at driving the channels, the initiatives and activities to achieve that,” adds Cheng.

“We're not a niche product. We have ambitions to be a global super brand - and the fastest and most efficient way to get there is to use mass-market channels that can build mental availability, build emotional connection.”

Creative cooking

“Building emotional connection and having really strong creative product makes a really big difference [to the success or otherwise of brand building],” says Cheng. “Maybe that's ingrained from my agency days, but I'll always be preaching that approach.”

He suggests the industry’s collective obsession with media over creative, as well as an ongoing reduction in production values, tends to beget B-grade advertising.

“What has happened in that regard is really sad. But I think the reason we talk more about media and numbers, channels, metrics and data [than creative] … is because it's safer,” says Cheng. “I often worry that the industry is heading towards a place of mediocrity.”

Advertising must perform core marketing functions, “but ultimately it should entertain”, he suggests. “That is the simplest test. When you show it to someone, you don’t want a neutral reaction.”

Given the commoditisation within food delivery, Cheng thinks A-grade creative is definitely worth the asking price.

“We are now seeing a lot more misattribution in the market, because there are more players. Creativity and how you differentiate is more important than ever.”

Keep feeding

Cheng attributes some of Menulog’s growth to its decision in 2019 to break out of its original niche – suburban families – and attack the entire market.

Instead of being seen as a Friday to Sunday night family treat, Menulog began to target all demographics for all ‘meal occasions’, as Cheng calls them.

“For a marketplace business such as ours, or any kind of marketplace business like an Amazon or an eBay or an Expedia, it's all about volume and scale,” he says. “You need to be able to appeal to a very broad demographic of audience. So we took a conscious decision to broaden the appeal of the brand and chase other demographics.”

Snoop Dogg and big ad dollars have helped realise that ambition. But to achieve both local and global growth goals, Menulog and Just Eat must look beyond breakfast, lunch and dinner to create a 24/7 addressable marketplace far deeper than 21 weekly mealtime ‘occasions’, suggests Cheng.

“Our breakfast business grew 30% at the back-end of last year. Our late night has grown about 60% and a lot of that has come off the back of … our delivery fees and being priced competitively in what we call non-dinner periods,” says Cheng.

“But for us, [the future] is about building a strong awareness that our offering will eventually become 24 hours, and positioning Menulog as an on-demand brand as opposed to just targeting three meals a day… So if you feel like something at three or four in the morning, there is an option there for you.”

Dark kitchens

To serve an always-on market will require food businesses to operate around the clock, offer greater variety and maybe set up shop in new locations.

To meet demand, some restaurants are already building out so-called ‘dark kitchens’, often in backstreets or industrial estates.

Cheng says Menulog is “very supportive” of restaurants planning those kind of operations, but unlike other delivery platforms, will not be setting up its own kitchens in competition with its restaurant partners.

Too many cooks, he suggests, is never a recipe for success.