Over the last few years there has been an explosion in online grocery ordering, delivery, and pickup services. According to data from PitchBook, coinciding with this has been a steady increase in the amount of capital invested into U.S. food technology companies, through private equity, venture capital, M&A, and IPOs.
Investment in Food Technology Companies; Source: PitchBook
Consumers increasingly expect grocery stores and grocery retailers to offer rapid pickup options, with many grocery chains now taking this a step further and offering grocery delivery. Delivery services such as Instacart and GrubMarket have partnered with numerous chains to facilitate and handle delivery, removing several of the largest barriers to entry of this service line. A quick search on Instacart’s site reveals that there are a number of stores offering free delivery to Camoin’s Saratoga Springs office.
Instacart Delivery Options for Camoin's Saratoga Office; Source: Instacart
In May 2017, Instacart released a public dataset- “The Instacart Online Grocery Shopping Dataset 2017.” This is an anonymized dataset that contains a sample of over 3 million grocery orders from more than 200,000 Instacart users. Internally, Instacart uses this data along with machine learning to improve the usability of the site and the shopping experience for consumers by sorting items for users to buy again and recommending items to users while they shop. The dataset includes information on the number of times a product is ordered, the time of day an item is purchased, and the order in which an item is added to a user’s cart.
Using this data, we are able to see what the most popular (and least popular) items to be ordered on Instacart were for this sample. The most popular items were primarily produce and organic foods, while the least frequently ordered items included more household and personal care goods.
Most Frequently Ordered:
- Large Lemon
- Organic Avocado
- Organic Hass Avocado
- Organic Strawberries
- Organic Baby Spinach
- Organic Zucchini
- Bag of Organic Bananas
- Organic Blueberries
- Honeycrisp Apple
- Organic Grape Tomatoes
- Organic Raspberries
- Sparkling Water Grapefruit
- Organic Baby Carrots
- Organic Cucumber
- Organic Whole Milk
- Organic Half & Half
Least Frequently Ordered:
- Green Chile Anytime Sauce
- All-Seasons Salt
- Saline Nasal Mist
- Fresh Scent Dishwasher Cleaner
- Overnight Diapers Size 6
- Robust Golden Unsweetened Oolong Tea
- Mint Chocolate Flavored Syrup
- Small & Medium Dental Dog Treats
- Peach Mango Juice
- Organic Spaghetti Style Pasta
- Light Strawberry Blueberry Yogurt
- Ultra Antibacterial Dish Liquid
- Biotin 1000 mch
- Fresh Breath Oral Rinse Mild Mint
- Mirabelle Brut Rose
- Lasting Color Shampoo
- Chocolate Sandwich Coolies
- Medium Taqueria Style Chipotle Salsa
- Cheesy Creations Roasted Garlic Parmesan Sauce
- Ramen Noodles Soup Chicken Mushroom Flavor
Why is this important?
While these services are primarily marketed as a time saver for consumers, grocery delivery is also becoming a way to alleviate food deserts and increase access to healthy, nutritious food in many areas across the U.S. A recent study by Yale University found that online grocery delivery systems already cover about 90% of food deserts in the eight states studied- Alabama, Iowa, Maryland, Nebraska, New Jersey, New York, Oregon, and Washington. These eight states are part of the Online Purchase Pilot (OPP) provision of the 2014 Farm Bill that allows people on the Supplemental Nutrition Assistance Program (SNAP) to purchase groceries online. This pilot runs through 2021 and may be considered for national implementation following this period.
Innovation in the online grocery ordering and delivery industry is not expected to slow down. With the number of companies now occupying this space, the potential benefits for food deserts, and ongoing changes to the retail landscape, it is important for economic developers to keep an eye on this industry and its trends.
The Online Food Ordering Landscape; Source: Pitchbook
Albrecht, Chris. Study: Online Grocery Shopping Could Help Alleviate Food Deserts. The Spoon, 4 Dec. 2019. https://thespoon.tech/study-online-grocery-shopping-could-help-alleviate...
Ives, James. Online Grocery Shopping Can Increase People's Access to Healthy, Nutritious Food. Medical Life Sciences News, 4 Dec. 2019. https://www.news-medical.net/news/20191204/Online-grocery-shopping-can-i...