Publix and Instacart Pilot New Prepared Food Pilot

Need to Know

• Instacart is partnering with Publix Supermarkets to launch a new meal delivery service.
• The updated app allows users to order prepared food and choose to pick up or have it delivered.
• Made-to-order food options represent 15% of total grocery sales.
• The growth of food delivery apps is expected to result in a $29 billion market revenue by 2024.

Analysis

Grocery delivery service Instacart is piloting a new service called Instacart Meals that will allow users to order prepared food and then choose to pick up or have it delivered. 

The initial pilot is launching in partnership with Publix Supermarkets in Orlando, Florida, focusing on the supermarket’s made-to-order sub sandwiches.

Instacart is a North American leader in online grocery delivery and pickup, partnering with over 350 retailers in over 5,500 cities in Canada and the US. And as it turns out, made-to-order meals may become one of the most profitable categories for grocery retailers. 

Explains Nilam Ganenthiran, President, Instacart, “Made-to-order food counters are among the fastest-growing aisles in the grocery store—these items represent up to 15% of sales for our grocery partners and have among the highest margins of anything sold in-store. It’s critical that our grocery partners are able to capture these sales online with delivery and pickup—it’s a boost to their business and a key part of the shopping experience for customers.”

Publix has over 1,200 locations across the US and in 2018 reached over $36 billion in retail sales. According to Maria Brous, Publix Director of Communications, “At Publix, we’re always looking for ways to ensure our customers have the best experience possible, both in our stores and online. With Instacart, it’s easier than ever for our customers to get prepared subs fast — the way they want — delivered along with their grocery essentials.”

Instacart Meals is designed to compete against restaurants, satisfying customers’ needs for healthy, affordable, and convenient meal options for life on the go. The new “build your own” functionality will allow customers to have their meal built and delivered as they want it.

The rapid growth of food delivery apps is not expected to slow down anytime soon. In 2019, over 48 million Americans used a platform-to-consumer app to have food delivered. This number is expected to grow to 62 million by 2024, resulting in a market revenue of over $29 million.