Why food needs Crypto and DeFi
Food is the second most important thing humans need to survive, right after oxygen. That explains why restaurants never stop cooking, and farmers never stop farming.
However, running a restaurant or other food-related business, hasn’t been a “good” business model in the last few years. Wondering why? Well in this article I'll try to explain as best I can. At Esca we've figured out how to combine eating with blockchain technology to help consumers and vendors in this industry get more food and more money.
Food glorious food!
First things first, food is inevitable.
No matter what happens, people won’t stop eating. Well then, cooking and selling food should be a pretty good business, right? Well, there are some complications. From pricing, to inflation, to health and safety, a food business owner has a lot more to deal with than a regular business selling non perishable goods.
Let me explain.
Restaurants don’t make a lot of money…
In the list of profitable businesses in 2022, restaurants are nowhere to be seen. That’s because the food chain is taken over by massive names that have already captured the bulk of the market. The average profit margin of a successful independent restaurant staggers between 3% and 5% annually.
Smaller food businesses simply can’t compete with the bigger names. If they price their food higher, people won’t order from them due to some assuming "insult pricing". If they price their food lower, they simply can't make enough money to sustain or grow their business.
Delivery platforms are painfully expensive
A small restaurant has two ways to handle its food deliveries. It can either set up its own delivery chain, which, as you might have guessed, is a lot of financial and logistical nightmare, or it can partner up with a food delivery service whose sole responsibility is to manage the restaurants deliveries. This is fast becoming the go-to option for food businesses across the globe due to the low operations and infrastructure costs required. In fact, studies suggest that restaurants on some food delivery aggregators see between a 20% and 40% revenue increase by being on delivery platforms.
However, the consequences of this revenue increase can be sometimes more dire than restaurant owners realise. Some big consequences are high commission rates (up to 30%) and the loss of brand recognition. Due to the aggressive marketing employed by some delivery platforms to assist with new user acquisition, independent brands sometimes get lost in the crowd and no longer own their customers.
Foodies on the other hand are hit hard by aggregators. They have to pay as much as 40% above market value in order to order from a restaurant on a food delivery platform.
These are just some of the many negative effects aggregators have on small, independent food businesses and food consumers.
Esca changes things
We use DeFi (decentralised finance) to make things better for foodies, and food business owners.
With Esca, a typical food consumer can still enjoy getting their favourite foods delivered without worrying too much about the financial implication of the meal. Business owners can laugh in the face of inflation due to the increase in sales and profits our cashback and DeFi yield can provide them.
Food & Crypto intersect
Cryptocurrency has made more people millionaires in the last decade than anything ever before in human history. However, due to societal, governmental, and technological barriers, the gained mass adoption at the pace it should have. We plan to bridge the gap between the mass adoption of cryptocurrencies, wealth generation and eating out.
Whenever a foodie orders something on Esca, they receive cashback in the form of Bitcoin. Furthermore, when a food business sells something on Esca, they also receive Bitcoin and USDC. After the transaction is processed, both the food vendor and the food consumer get their BTC & USDC cashback in their Esca wallets within 48 hours.
It’s that simple — there are no complex setups required to get started. Simply sign up, order, and earn.
Why is this important for food businesses?
The world is currently experiencing a financially turbulent time. History has shown that the businesses that suffer the most during times like this are small to medium businesses with low margins. I already stated above that a successful independent restaurant makes anywhere between 3% and 5% profit annually. You take those margins to markets where food inflation is in double figures and said businesses are barely breaking even. With Esca, restaurants like this get to sell their meals as usual while steadily generating passive income.
This allows the business to offset miscellaneous costs using the extra finances Esca provides rather than their own revenue.
As we continue this journey, we'd like you to follow us on our Twitter, Instagram, and Telegram channels @escamenu to stay up to date. Also click here to learn more about how we're turning eating out into a revenue generation activity.