Instacart yesterday announced the launch of a new Ready Meals program, which it describes as "fresh, healthy and cost-effective alternatives to restaurant takeout from customers' favorite grocers. With Ready Meals, consumers nationwide can now take a break from cooking and instead get fresh, ready-made meals delivered from the store to their door in as fast as 30 minutes."
The company has created a new Ready Meals Hub in the Instacart App that features "prepared foods from grocers like Publix, GIANT, Food Lion, Hannaford, Stop & Shop, Martin's, and Kroger. In the coming weeks, ready-made meals from ShopRite will also be featured in the Hub. From freshly prepared grab-and-go salads and sandwiches from Publix, to soups and sushi from Kroger, to rotisserie chicken from Food Lion, customers across 35 states can now access the Ready Meals Hub to quickly get prepared meals delivered from more than 4,100 grocery stores."
In its coverage, Business Insider points out that FMI-The Food Industry Association "estimates prepared foods at supermarkets are a $13 billion-a-year business and growing rapidly. FMI said 64% of meals made at home include ready-to-eat items such as pre-made salads and ready-to-eat meat. The U.S. chilled and deli food market size was expected to top $40 billion in 2021 and is projected to reach more than $108 billion by 2026, according to market analytics firm Research and Markets."
The technology behind the new offering is being powered in part by Instacart’s acquisition last year of FoodStorm, a catering order management system.
The goal, the company says, is to offer "inspiring, more affordable and nutritious food alternatives to restaurant delivery that make it easier for consumers to break up with takeout this year," and, in doing so, "drive more sales and increase their 'share of stomach' when it comes to their customers' daily mealtime decisions."
- KC's View:
It isn't just retailers' sales that Instacart is hoping to drive. Here's a nugget from the Bloomberg story about its Ready Meals offering:
"Instacart’s average order values have seen a steady decline and were about 15% lower in November than the year earlier, YipitData show. The company has pushed into other categories, like virtual convenience stores, to tap new sources of growth. Instacart’s orders grew by 30% in 2021 compared with the year earlier, and sales saw 'double-digit” growth," though the company did not provide exact figures.
I think the idea of trying to maintain the momentum for fresh foods and foodservice that was created during the height of the pandemic, in part because of all the troubles being experienced by the restaurant industry, is a good one.
But it will not surprise MNB readers to know that I am troubled by the fact that the Ready Meals offerings of these different retailers, many of which compete with each other, will be given equal time and exposure via the Instacart website. Sure, that means retailer A may be able to steal customers from retailer B … but that goes both ways.
Instacart's offerings begins to look like more and more like Priceline's pay-one-price-for-groceries offering back in 1999-2000, which was one of the stupidest ideas ever adopted by retailers, some of which thought back then that this could be their long-term e-commerce solution. All that did was equalize the competition in ways that did no favors for retailer clients … and I think that in the end, this is going to be the criticism that will stick to Instacart.
Instacart can deny it all it wants, but this Ready Meals initiative, and all the consumer data it will be able to access, also will give it the ability to compete with its retailers - all it will need is some ghost kitchens and dark stores, and retailers will have been disintermediated from the relationship.