This Chicago startup lets you order snacks to your seat. Can it compete with entertainment giants?

Wednesday, 15 November 2017, 06:34:47 AM. Chicago startup FanFood is bringing app-based food ordering to live events, allowing you to get food and drink without having to miss a play or song. But the company faces stiff competition from industry heavyweights.

Chicago startup FanFood is bringing app-based food ordering to live sports, concerts and other events, allowing you to get food and drink without having to miss a play or song. But the company faces stiff competition from industry heavyweights.

Launched in May, FanFood’s app looks much like Grubhub or Caviar, but delivers concessions to your seat at a venue instead of to your front door, typically at a $1 to $3 upcharge per item. Customers can also pick up their food themselves but skip the line by pre-ordering.

“Technology has only been making it easier to stay at home, to kick up my feet and watch (an event) on HDTV,” said FanFood co-founder Carson Goodale. “Why am I going to pay an arm and a leg to go to the event and then miss half the action while I’m trying to wait in line for beer?”

FanFood says it has worked with six venues in Texas, Iowa and California. The company offers recurring service for events at Avaya Stadium, where the San Jose Earthquakes play soccer; the Austin360 Amphitheater; two golf courses in Austin; and the Iowa Cubs’ minor league baseball stadium in Des Moines, Principal Park. It also served at the Formula 1 Grand Prix in Austin this year. Neither FanFood nor its competitors serve any Chicago stadiums yet.

FanFood supplies venues and their food service providers the back-end web and mobile apps; the technology hardware to run it, like a tablet; and a manager to oversee operations at the particular venue. The startup will also hire delivery runners if neither the venue nor its food service provider can staff the event itself. Concession stands are responsible for monitoring and fulfilling orders, and making sure they get into the right hands for delivery or pick-up.

The startup says both the venues and the food-service providers, which are usually outsourced companies, will see benefits from using their service. It argues that in-seat delivery and pre-ordering help the venue compete with the couch. And without having to wait in line, Goodale says, customers are more likely to order food more than once per event. At a concert in Austin served by FanFood earlier this month, 83 percent of app users ordered twice, and their total spend was about $31, compared to $19 at the traditional check-out line, the company said.

The app is free for users. FanFood earns revenue by billing venues for installation, taking an undisclosed cut of the concession stands’ revenue, and charging customers convenience fees that start at $1 for pick-up and $3 for in-seat delivery per item ordered.

The startup is not alone in the live-event, in-seat concession delivery space — and it faces competition from major players, most notably through a startup called VenueNext. VenueNext’s investors include entertainment leader Live Nation and Twitter, and it’s worked with some of the biggest venues in the country, including Yankee Stadium; the ’ home, AT&T Stadium; Churchill Downs, home of the Kentucky Derby; and the ’ home, Levi’s Stadium, where the app was first developed.

VenueNext’s management technology goes beyond food ordering: It lets arenas design a personalized app and offer things like mobile ticketing, stadium maps, real-time game statistics and in-seat delivery. Its technology can be adapted for hotels and hospitals as well. But these kinds of features require infrastructural upgrades beyond connecting an iPad to the concession counter.

The company says its service is primarily for the venues it works with, giving operators a better look at what attendees are doing.

“The most important thing we do is give the venue or the team data about who is in the venue and what they’re doing,” said VenueNext CEO John Paul. “It’s basically a marketing platform they use to reach segmented audiences.”

Goodale believes FanFood will secure a place in the market through its adaptable technology and low-cost integration.

“They’re in the business of creating infrastructure rehauls,” Goodale said of VenueNext. “We’ve built a technology platform (that can) integrate into any stadium at any size, to meet any fan, if it’s a golf course, high school, whatever … at low- to hardly-a-cost to the (venue) and the food service company.”

Tim Bajarin, president of Silicon Valley consulting firm Creative Strategies, thinks the two companies satisfy different needs. VenueNext’s focus on whole-stadium infrastructure packages leaves room for a simpler plug-and-play solution, he believes.

“When they come in, they want to provide the entire solution,” he said. “The fact that (FanFood is) providing a dedicated service that would allow for retrofitting probably has a fairly good opportunity with ... any stadium or any professional venue.”

Goodale said he had just started working on his idea for FanFood when VenueNext launched in late 2014. Following a potential competitor into market actually influenced Goodale to take his app in a different direction.

If consumers have a choice between an individual app for each venue and a single app that works at many venues, Goodale thinks they’re going to choose the latter.

“As a millennial myself … I don’t like downloading multiple apps,” Goodale said. “The white-label solution isn’t the solution that scales.”

Other competitors include New York-based SeatServe and MasterCard’s Qkr. Grubhub could have its own product in the works, too: In August, that the company was in talks to launch an in-seat delivery feature at in New Jersey, where the NFL’s Giants and Jets play. Grubhub declined to comment on the feature.

Goodale, who was studying finance at the University of Iowa when he started working on FanFood, partnered with classmates Elijah Doetsch and Will Anderson to develop the app. With a $25,000 grant from the state of Iowa and some of their own money, they hired an overseas developer in early 2016. They later added a fourth co-founder, Dustin Hemesath, who now serves as the company’s president. The team beta tested their product in September 2016.

FanFood has since fulfilled orders at over 60 events across the country, bringing in more than $100,000 in revenue. It has raised more than $200,000 from family and friends and almost $100,000 from angel investors.

As a first lieutenant in the Army Reserves, Goodale qualified FanFood to apply for a Bunker Labs accelerator course for veterans based in 1871. Once accepted, the startup relocated from Des Moines to Chicago in March 2017.

The startup, now based in WeWork Kinzie, is focused on scaling. In addition to growing the team and finding venture funding, FanFood hopes to soon secure a strategic partner within the concession industry — ideally one that already has a portfolio of venue affiliations.

maclevine@chicagotribune.com

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