Nikhil Bhasu Trivedi wrote an essay yesterday titled Grocery Delivery and The Future of Packaged Food.
As Nikhil states, grocery is clearly having a moment. I can count on one hand the number of times I’ve eaten our or ordered takeout since March 10th. We’re buying a lot of groceries. Here are some points I lifted from his essay.
- Spending at U.S. grocery stores jumped by 26%
- 63% of food and drink was purchased at grocery stores in March, the highest % share since 1996
- The increase in grocery spends continued in Q2 2020 as it grew to nearly $400, up 31% year-over-year
- Research from Brick Meets Click and Mercatus found that sales hit $7.2 billion in June 2020 alone
- 45.6 million households used grocery pickup and delivery services that month, up from 16.1 million in August 2019 as U.S. customers doubled the usage of online grocery
- Instacart is the big delivery winner so far in the past several months, its market share has eclipsed that of Walmart Grocery
- The brilliance of Instacart is that it has aggregated grocers, as well as shopping and delivery personnel, on one platform
- UK: Online grocery sales have doubled in the U.K. since covid-19
- China: saw surges in the online grocery with consumers gravitating towards tech-savvy supermarkets (this didn’t surprise me!)
Not only does this trend have implications for founders and investors in the grocery category, but it also affects those in the CPG industry focused on packaged food. Grocery retail channels have shifted in a matter of months and may shift even more profoundly in the coming decade. Small grocery stores, in particular, will find it challenging to survive in a technology-driven grocery world.
Nikhil adds some great visuals to his essay so definitely go check it out if you want more.
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