Brand and deliver

Expansion is the aim of many an entrepreneur, and Rohan Blacker and Patrick Reeves are no different. Having built their home-delivery business to a turnover of £4m in four years, they are branching out to the pub market to try to find new consumers.

The pair of former barristers founded Deliverance, a multi-cuisine home-delivery service that opened in May 1997 with a 1,000sq ft kitchen in Battersea, London, and an investment of £80,000.

"We looked at doing sandwich bars and cafés, but couldn't find the space. Then we thought about home delivery. In a restaurant with 50 seats you're going to do a maximum of 100 in a night. Here, there's low rent costs in an industrial unit and an unlimited-cover restaurant," says Blacker.

More than one

The novel idea of offering more than one type of cuisine clearly appealed to the consumers, if Deliverance's results so far are anything to go by. In year one the company turned over £500,000 and "just" broke even. Last year it reported revenue of £4m and is making a profit, although Reeves admits it's not massive.

Blacker had some outside catering experience, but the pair acknowledge that there were hiccups in launching their initial offering of Thai, Chinese, Indian and Italian foods along with salads, wine and beer. The cooked meals and wine went out to residents of Battersea, Clapham, Chelsea, Fulham and Wandsworth, despite incidents such as burst water mains, which restricted the use of the water-cooled Wok cookers.

Most crucially, the initial kitchen was too small. It was not until a year later, in August 1998, that the pair were able to lease the unit next to it and enlarge the kitchen to three times its original size.

"We made a lot of mistakes as we went along, but I think we survived because the public only had our leaflet and our food to judge us on, and we managed to get that right most of the time," says Blacker.

Expansion was a key objective but it took almost three years to find the second site to build a proper kitchen. Deliverance Central finally opened in February 2000 on the edge of the City of London following an investment of £500,000.

European food was added as a menu option and Deliverance Central serves Camden, Clerkenwell, Islington, the West End and the City, making around 300 deliveries a night, with an average spend of £12 per head. This high-density population within a two-and-a-half-mile radius is necessary for the operation to make money. Having enough people to buy the product is an obvious prerequisite, but the geography is also important so that the food doesn't go cold. "Home delivery, at least the way we do it, is not as easy as it sounds and it involves lots of preparation and a very specific type of kitchen," says Blacker. "We thought about trying to do Deliverance from a catering kitchen and decided against it."

Offering such a wide choice of food means there must be specialists in each type of cuisine working in Deliverance's kitchens. And with 100 products on offer, the need for quality control is important.

"There are a limited number of places where this type of operation can work, which makes it difficult for us. Each kitchen employs 60 staff so you have to sell a lot of food to make a profit," explains Reeves.

Knowing areas such as Wimbledon, Dulwich and Shepherd's Bush won't sustain a large operation, Blacker and Reeves have thought of a new way to penetrate these markets. The pair have taken on the lease of the Crown and Sceptre pub from Fuller's in Shepherd's Bush. The builders are moving in on 30 July and the pub will open in mid-September. There are 70 seats inside and a garden that will take about 40.

Blacker and Reeves have invested £180,000 in the pub and Fuller's is making a "substantial" contribution as well.

The idea is to run the pub and serve Oriental food, particularly Thai. While the pub and its food will not be branded as Deliverance products, a home-delivery service will start operating from the premises in a few months' time. "This will enable Deliverance to get into small neighbourhoods," says Blacker.

There were no templates to follow when Blacker and Reeves launched Deliverance, so the pair are comfortable in unknown territory. But they are clearly hoping that this latest development will lead them forward in the home-delivery market.

Deliverance menu

A selection from the menu at Deliverance Central

Chinese
Aromatic crispy duck (quarter), £9.50
Sweet and sour pork, £7.50
Stir-fried mixed vegetables with oyster sauce, £4.50

Thai Thai green curry, £7.50
Pad Thai, £7.50
Carrot, mango and honey salad, £5.90

Indian Chicken dhansak, £7.50
Bombay fishcakes, £4.90
Goan chicken curry, £7.50
European/other
Chicken stroganoff, £7.60
Moroccan lamb tagine, £8.30
Kedgeree with haddock, £7.60

Italian Pizzas, £7.50-£10.50
Penne arrabbiata, £7.30

Salads Caesar, £5.90
Tabbouleh with roasted vegetables, £5.90
Apple, basil, citrus, £5.80

Deliverance

Owners: Rohan Blacker and Patrick Reeves
Head office tel: 020 7837 6800

Staff: 120 people
Initial investment: £80,000
Deliveries: 300 a night from City kitchen, which opened in February 2000, accounting for 1,000 covers a night
Average spend: £12 a head
Investment in City kitchen: £500,000
Turnover 1997-98: £500,000 Turnover 2000-01: £4m
Labour costs: 30%+
Packaging costs: £200,000 annually
Food consumed by type: Thai 24%; Chinese 22%; Indian 17%; pizza 15%

Eat It In

Eat It In, a joint venture between Thistle Hotels and existing delivery operator Room Service, is another company hoping to exploit the home-delivery market.

But the operation will need a new backer if it is to get past its first outlet.

Room Service, which made its name doing home deliveries from several top London restaurants, teamed up with Thistle, which had excess kitchens at some of its properties. The first operation is running at the King's Cross Thistle hotel where Eat It In offers meals of various cuisines, including Chinese, Indian, Italian, Thai and sushi. The hotel receives rent from an underused space and Room Service has access to a ready-built kitchen.

While Eat It In is still operating from King's Cross Thistle, the plan to expand the concept through the hotels has been scratched, according to Stefan Bregg, food and beverage director at Thistle.

"The market is there and someone will find the business formula to tap into it. But it is difficult for a hotel to manage non-core activities," he says.

A substantial amount of money would have been needed for the expansion and Bregg acknowledges that, when this type of investment is weighed up against resources needed at operational level, a hotel company looks fairly carefully at where its core business lies.