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After experiencing a record surge during the pandemic, the food delivery market is continuing its meteoric rise, facilitated by increasing urbanization and growing demand for convenient, contactless services. According to Grand View Research, the global online food delivery services market was valued at $50.7 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of 18.7% from 2022 to 2030.

However, as the industry grows, so will the competition in the market. That may mean the pushing out of recently popular companies as well as the introduction of instability into the industry. Investors should understand that this is still a relatively new sector, meaning there are a lot of smaller, private companies — and potential acquisitions — in the space, from Getir to Flink.

Over the past few months, names like Delivery Hero (OTCMKTS:DLVHF) and Deliveroo (OTCMKTS:DROOF) have fallen. Meanwhile, other food delivery companies have been benefiting from the collapses, exits or mergers of certain firms, managing to expand their presence in the market and achieve new growth.

With that in mind, here are three food delivery growth stocks with the potential for future growth in 2023.

DoorDash (DASH)

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A well-known food delivery company in the United States, DoorDash (NYSE:DASH) accounted for more than 50% of the U.S. food delivery market as of March 2022. The company has over 20 million users and hundreds of thousands of global merchants, making DASH a food delivery growth stock of choice.

DoorDash’s fourth-quarter financial report released caused a mixed reaction among investors. Despite the company’s Q4 loss quadrupling to $642 million and free cash flow of just $21 million, revenue and orders beat market forecasts.

More specifically, Q4 revenue increased 40% year-over-year (YOY) to $1.82 billion, well above the $1.77 billion forecast by analysts. In an interview with MarketWatch, DoorDash Vice President of Finance Ravi Inukonda called Q4 “the best quarter ever.” The period also saw a record 467 million orders, beating analyst estimates for 459.5 million orders.

According to Inukonda, DoorDash’s U.S. market share has even expanded to 60%. The company is expected to improve its U.S. restaurant margins as well, according to analyst Jason Helfstein. The analyst predicts these margins to grow from 5.7% in 2022 to 6.1% in 2025

As of this writing, DASH stock is up 12% year-to-date (YTD), trading slightly above $54. The current consensus of 31 analysts polled by CNN Business is a “buy” rating, with 15 analysts choosing “buy” and 13 choosing “hold.”

All told, improved customer retention, strong market expansion and better-than-expected earnings in Q4 2022 will help DoorDash to start reinvesting back in its business. Furthermore, given the constrained fundraising environment and reduced competition, the company can take advantage of its position to make profitable investments and expand while other competitors retreat. If this positive trend continues, DASH stock could become one of the best long-term food delivery growth stocks to own.

Uber (UBER)

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As a company with activities closely related to consumers, Uber (NYSE:UBER) is highly influential. However, it’s also still largely unprofitable. Hopefully, with its growing global popularity, Uber Eats can become the company’s profit puppy. That potential makes UBER stock one of the top food delivery growth stocks for investors to consider.

The presence of Uber Eats means customers don’t need an extra delivery app — a serious threat to competitors. On top of that, Uber announced Uber One back in 2021, a single membership program bringing together “the best of Uber rides, delivery and groceries.” New products offering customers more value at cheaper prices should create more stable revenue for Uber.

Uber Eats’ Q4 2022 performance exceeded expectations, with gross delivery bookings surging 14% YOY to $14.3 billion. Delivery revenue showed a 21% YOY increase to $2.9 billion as well, comprising about 34% of total revenue. Uber’s continued investment in non-restaurant delivery sectors — including grocery, convenience and alcohol — may also help the business grow. 

The growth of Uber Eats is also continuing despite the impact of inflation on consumer discretionary spending. What’s more, the value proposition of Uber One is a major factor in play. The subscription program’s membership count almost doubled in 2022, reaching approximately 12 million members. The program continues to play a crucial role in boosting user loyalty and spending on Uber Eats.

CEO Dara Khosrowshahi had the following to say in the Q4 report:

“We ended 2022 with our strongest quarter ever, with robust demand and record margins […] Our global scale and unique platform advantages position us well to accelerate this momentum into 2023.”

Just Eat Takeaway.com (JTKWY)

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Just Eat Takeaway.com (OTCMKTS:JTKWY) has completed several partnerships and buy-and-sell deals in the past year. For instance, back in October, Just Eat’s GrubHub partnered with rapid grocer Gopuff. A month later, Just Eat announced a similar deal with Getir in Europe. In 2023, GrubHub also announced a partnership with startup Buyk.

In fact, Just Eat Takeaway continues to secure major partnerships across the grocery market, recently revealing deals with around 175 Sainsbury’s and 50 Dia’s supermarkets as well. The company also works with several other companies, suggesting further partnerships may come this year.

Last year, Just Eat announced another “dark store” pilot project as well, launching Lieferando Express branded operations in Germany. Experiments like this will help continue to fuel the company’s rapid grocery growth strategy throughout 2023.

Although total orders fell 12% last year, JTKWY stock remains one of the best food delivery growth stocks looking forward. After rapid pandemic-fueled and growth-incurred costs, Just Eat has managed to get control of its expenses and is now reporting better margins.

Such a quick turnaround — coupled with low capital investment — points to the company’s strong focus on margin management. That should give investors confidence in the overall health of Just Eat’s businesses.

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On the date of publication, Julia Magas did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Julia Magas is a writer who covers the latest trends in finance and technology. Her work is published in a number of financial media outlets such as Nasdaq, Cointelegraph, Investing, SeekingAlpha, FXEmpire, and Beincrypto. She primarily covers cryptocurrency and blockchain technology with a focus on market performance, innovations and trends.

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