The online grocery delivery market is exploding with major players like Amazon, Safeway and Walmart expanding their same-day grocery delivery services across the US. Food and Beverage is by far the largest retail category in the US generating $600 billion a year in sales. Currently, only 15% of US consumers shop for groceries online, but this trend is going to get stronger. Online grocery shopping and delivery is projected to grow by 21.1% YOY, while offline grocery shopping is only projected to have an annual growth rate of 3.1%.
Grocery delivery is far from being the only trending food tech service. Big success in the restaurant delivery and meal-kit sectors have led to an abundance of copycat services. GrubHub, the leading restaurant delivery service in the states, grew its daily order count by 30% and its gross food sales by 36% (to $590 million) in Q1 of 2015. Blue Apron, one of the leading meal-kit services in the US, recently joined the billion dollar startup club after being valued at $2 billion in June, 2015.
We decided to investigate the US consumer food tech environment, looking into the industry’s three pillars: grocery delivery, restaurant delivery and meal-kits.
Food Tech Trends in the US
We compared the leading food delivery services in the US to identify trends for further investigation. A Jumpshot Competitive Analysis report comparing Safeway, GrubHub, Eat23 and Blue Apron reveals that while all the services gained users and traffic throughout the year, the type of device used to shop from varies. Food tech startups typically take a mobile-first approach, while food retailers rely heavily on desktop traffic.
When we focus on desktop traffic, we discover that most Americans use online grocery delivery services on Wednesdays. Second place goes to restaurant deliveries, making meal-kits the least popular type of food tech service accessed from computers in the US. When we focus on mobile traffic we see a different picture: Most Americans use restaurant delivery services on the weekends, meal-kits come in second and grocery delivery is the least popular service.
Desktop (left) Vs. Mobile (right) US Consumer Traffic to Food Tech Services
The difference in the desktop and mobile market share of online grocery delivery services can be explained by looking into Safeway’s online store. A Site Analysis report for Safeway’s US traffic reveals that the vast majority of Safeway’s desktop traffic is to its online store, but only 15% of its mobile traffic is grocery shopping.
Safeway Top Page on Desktop (left) Vs. Mobile (right)
Mobile Food Tech Trends in the US
Mobile technology has changed our world. Mobile traffic surpassed desktop traffic in 2014 and mobile commerce now represents nearly 50% of online commerce. 74% of consumers rely on social media to inform their purchase decisions, driving social networks to provide social commerce features. Social commerce typically focuses on mobile: Pinterest’s Buyable Pins and Instagram’s Shop Now button are great examples of the shift to mobile-first e-commerce. As a result of this shift, we decided to take a deeper look into the leading mobile consumer food tech platforms in the US.
We focused our investigation on GrubHub, Yelp’s Eat24 and Blue Apron. Safeway was excluded due to the fact the e-commerce traffic only represents 15% of its mobile traffic. A Competitive Analysis report revealed two interesting points:
- Although GrubHub is by far the most popular food delivery service in the US, its growth rate is the lowest (12.6% since the beginning of the year).
- Blue Apron is enjoying the highest growth rate (88.3% since January, 2015) and is getting close to Eat24’s mobile traffic metrics.
Focusing only on Eat24 and Blue Apron we can see that the competition for market share is closer than we thought. Blue Apron may soon pass Yelp’s Eat24 in popularity and become the 2nd most popular mobile food tech service in the United States.
Bottom line: The shift to a mobile-first world is evident in the food tech industry. Food retailers need to adapt and find a way to make grocery shopping quick, easy and mobile friendly or they will lose their market share to mobile-first and consumer focused food tech startups. The answer to food retailers’ mobile problem may be in the user experience, customer support or retention efforts. We’ll just have to wait and see how this unfolds and hope to see some slick grocery shopping apps soon.
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