Realtors will tell you that kitchens and bathrooms sell homes. What happens if there is no kitchen? Investment bank UBS recently issued an investment note to customers titled, “The End of the Kitchen?” Not being a UBS-caliber customer, I’ve only been able to glean snippets from the private report from across the internet.
In a nutshell, UBS is taking note of the fast rise in food delivery services like Uber Eats, DoorDash, GrubHub, and yet to enter the US, Deliveroo and Foodora. The report postulates what happens to the food distribution and preparation market as food delivery grows in popularity. It’s all part of the larger trend of people outsourcing tedious tasks to those willing to do them for pennies.
Over the course of decades, the amount of money spend dining out had grown to roughly 50 percent of food expenditures by 2014 (newest USDA data). Compare that with just 16 percent in 1929 and doubling to just above 30 percent by the 1960s. The only real reduction in the incidence of eating out comes during recessions when eating out is viewed as more luxury.
Of course, there’s a generational component at work as well. Millennials only eat roughly a third of meals at home compared to 41 percent of Boomer meals. Millennials also eat about a third more meals in restaurants and bars than Boomers and about half as many more as Generation X. Consequently, Millennials spend on average 88 minutes per week on food preparation, presentation and cleanup compared with 143 minutes for Generation X and 136 minutes for Boomers. You’d think this might be because Millennials are working more hours than their older peers, but you’d be wrong. Generation X worked 25 percent more hours than Millennials and Boomers, over 50 percent more. UBS says Millennials are 3x more likely to order prepared meals than their parents (Boomers).
Dating from 2014, what the USDA report doesn’t really cover is the recent rise in food delivery services. Uber Eats only began regional service in 2014 and reportedly now accounts for 10 percent of Uber’s revenues. In fact, food delivery apps are downloaded as much today as ride share apps in major cities.
UBS foresees growing usage of meal delivery services like Uber Eats but also the eventual inclusion of meal preparation by the delivery companies themselves offering their own menus. This shouldn’t be a shock. As we’ve seen Amazon continue to be a one-stop-shop, we can expect delivery services of all stripes to eventually create or acquire the meal-creation services they deliver themselves. For example, in addition to delivery, UK-based Deliveroo launched Deliveroo Editions in 2017, whereby they own the kitchen and rent facilities to restaurant start-ups who can’t afford a bricks-and-mortar restaurant.
Amid all this fevered growth in food delivery, remember it’s just adding to the slightly older, ready-made meal options Eatzi’s pioneered. It’s easy to see that if this trend continues, it will have an impact on how housing operates. UBS estimates that by 2030, food delivery services could take a 10 percent bite out of the entire food services market – or 10 times what it is today.
UBS continues, estimating that drone and robotic technologies could decrease costs for prepared, delivered food below those of home cooked.
While not on the level of pricier cities, new Dallas apartments seem to be losing kitchen space. The floor plan above shows a one-bedroom apartment with what I’d call a walk-through kitchen only slightly larger than the bathroom. In those pricier, non-Dallas markets, kitchen islands are being dropped for a single line containing appliances interspersed with meager storage and counter space.
You may be thinking a completely kitchenless home is pie in a darkened sky, but the UK is already seeing its start. After peaking in the 1960s, new home kitchen size has shrunk 13 percent to an 80 year low.
And it’s not just Millennials that are driving the trend. We’ve heard time and again that single people hate cooking for one (I’ve never thought so). Single households already make up a quarter of all households in the US, and continuing to grow.
Surprisingly, kitchenless homes aren’t radically new. I’ve written often that we seem to be returning to the past in embracing urbanism and the vibrancy it creates. Back in the 1800s, apartment blocks in New York were made with communal kitchen spaces (along with housekeeping and childcare). Higher density housing was able to capture the efficiencies offered by centralized domestic services.
In fact, one of these communally-serviced buildings was the Waldorf Astoria. Many view such an arrangement as enabling a renewed sense of community. Units were often for singles and couple, but some built for families. They consisted of a living room, bathroom and bedroom(s). Of course the idea of communal living was one of the basic tenants of communism. Once that ideology took off and communal living was closely associated with Soviet politics, they fell out of fashion in the US.
The difference today is that instead of centralized, on-site, staffed or shared kitchens, delivery services like Uber Eats decentralize preparation off-site and facilitate delivery. Unlike the past where shared domestic services encouraged a sense of community (you simply saw and interacted with your neighbors more), delivery services are about today’s anti-social app culture of convenience.
First Uber came for my car — now they want my kitchen? No.
Remember: High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (2016, 2017, 2018) and two Silver (2016, 2017) awards. Have a story to tell or a marriage proposal to make? Shoot me an email [email protected]. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.
