Interview Wolt CEO Miki Kuusi

"Monopolies are never good for people"

Miki Kuusi, CEO Wolt.
Wolt
Miki Kuusi, CEO Wolt.

The Finnish delivery service Wolt has been active in Berlin since August. Although not yet officially confirmed, the company also launched on a small scale in Frankfurt shortly before Christmas: about 20 restaurants are listed on the Wolt website for the city. In the interview, CEO Miki Kuusi talks about Wolt's philosophy, its entry into the German market and its experience with Corona.

FOOD SERVICE: Wolt has just launched in Berlin. Can you give us an overview of what makes Wolt different from other delivery services?
Miki Kuusi: Well, for one thing, the delivery market is a huge one. People eat every day, after all. Accordingly, it's not surprising that there are multiple providers. As for Wolt's background: our home market, Finland, is a very difficult one. Strong welfare state, low wealth inequality, high labor costs. Many small, sparsely populated cities. Plus no learned delivery culture. At first glance, there is perhaps no worse country to do what we do. So the only thing left for us to do was to become extra good and highly efficient - thanks to technology. We second-generation delivery providers, that is, those who bring the food for the restaurant to the guest, see ourselves first and foremost as a logistics optimization company. To do that, we had to optimize our technological solutions.

What does such an optimization look like?
This is about mathematical and technological improvements to make the delivery business more efficient for all parties. A lot of it the customer never notices, like the tip of an iceberg. To put it in perspective: We have about 180 product developers working for us. Only about 30 work on products that the consumer gets to see.

Unlike other delivery providers, Wolt does not list restaurants that deliver themselves. Why?
We did that in the beginning, but we don't anymore. From our perspective, the only way we can guarantee a fast and consistent customer experience at an affordable price is with our setup and technology. We realized that with self-delivering restaurants we would have to go much more into customer support, the delivery times would be very different. We believe that a single restaurant can never make delivery as efficient and affordable as a highly specialized technology company like us. That said, it's very hard to get it right. I believe in focus: as a company, you should focus on one thing and work to become the best in the world at it.

What are Wolt's conditions for restaurants?
We charge a commission from the restaurant per order, and for that we take care of everything: customer support, delivery, organizing the drivers and so on. The restaurant cooks and we pick up the food and deliver it to the consumer. The biggest part of the commission, by the way, goes to the couriers. Because the delivery fee that the consumer pays does not cover the cost of delivery.

How do restaurants benefit from a partnership with Wolt?
Let's take the example of a well-run restaurant that previously didn't offer delivery and is now working with us. On the one hand, we help to reduce the rate of food waste and thus optimise the cost of goods a little. We also help optimize staffing. At the beginning of a partnership, a restaurant can generate about 10 to 15 percent more sales through Wolt with existing staffing levels. As the number of orders through Wolt increases, restaurants often hire new staff. However, they need fewer staff for delivery orders than they do for in-restaurant consumption, since service tasks are eliminated. And on the subject of rent: This does not change. Accordingly, the profit from a Wolt order is higher than the restaurant's average margin. This allows us to charge a higher commission to run our business and attract more new customers than would be possible with a higher end customer delivery fee.

You originally didn't want to enter the German market. What led to the change of mind?
We are a company on an expansion path. We operate in more than 120 cities in 23 countries. We are very careful about picking new expansion targets. We often thought about Germany in this move and always came to the conclusion not to be active there. But after the acquisition of the Delivery Hero brands by Lieferando, a virtual monopoly was created in Germany. Monopolies are never good for people. So we thought there was enough space to do what we do. And in Berlin, it works: you see a lot of couriers in our colors. People vote with their orders.

What is the further expansion strategy for Germany?
We look at each city separately, regardless of size or country. As a first assessment for Germany, though, it looks like there are fewer restaurants outside the bigger cities like we need to partner with: Restaurants without their own delivery service, but where many people would like to order from. So it could be that we focus on the big cities in Germany. But only time will tell.

What is Wolt's position on providers of Ghost Kitchens?
A fantastic partner for us and we are fantastic partners for them. We work with such providers in almost all our markets. My belief is that as delivery numbers increase, more and more new, innovative business models will be established. Delivery-only kitchens, in my view, are one of them. And that includes both those operated by existing restaurants and restaurateurs as well as new providers on the market. We see ourselves as a marketplace where new things can emerge.

What impact has the Corona pandemic had on Wolt so far?
I have very mixed feelings about this. Yes, the crisis has given services like ours a boost. More new customers are trying us out, more existing customers are ordering more often. At the same time, we're seeing the restaurant industry suffer, such as nationwide lockdowns in many places. And if restaurants are doing poorly, that's bad for us, too. After all, 100 percent of our sales come from them.
About Wolt
The delivery service Wolt Enterprises calls itself Technology Company. The Helsinki-based company is active in 23 countries and more than 80 cities and delivers food from over 10,000 restaurants with over 20,000 suppliers out. The company was founded in 2014 and today employs more than 1,200 people. The company is led by co-founder and CEO Miki Kuusi.
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