The Future of Grocery: Online Grocery, Meal Kits, & Direct-to-Consumer Food, 3rd Edition

Report Overview

The Future of Grocery Shopping is Not Only Digital, But Automated

• Moving beyond pantry items – the shifting mix of food items bought online
• More than just delivery convenience – how customers can find additional value in the online experience
• The role of automation and robotics in grocery order fulfilment and delivery

The future of grocery shopping is increasingly digital. Consumers are looking for convenience in how they get and prepare their food, and online grocery shopping options facilitate:

• ordering on one’s own time (even outside of store business hours)
• home delivery or appointments for curbside pickup
• access to foods not available locally, including specialty types or foods to suit particular eating habits or allergy limitations
• assistance with meal planning, as platforms suggest combinations and recipes
• assistance with meal preparation, as some formats supply precooked, premeasured, or otherwise semi-prepared meal elements

In this way, online grocery shopping and meal kits increasingly have more elements in common:

• Both are intended to limit the time that consumers spend in stores and thinking about their food needs. For instance, meal kits companies have traditionally been the venue for consumers seeking assistance with meal planning, but online grocery platforms increasingly use artificial intelligence to assist shoppers with their lists and meal planning based on their past purchases and the preferences of similar consumers.
• Both types of services help save money, in that they tend to reduce impulse shopping and food waste because consumers are taking time to plan purchases or full meal selections ahead of finalizing their orders.
• They both benefit from consumers’ increasing willingness to outsource individual food selection by allowing pickers to select the ripeness, quality, and precise size of fresh produce and fresh meat, poultry, and seafood.

Online Grocery Shopping Driven by Convenience

Online shopping – including grocery shopping – is generally driven by convenience. Convenience is the number-one reason that online grocery shoppers and meal kit delivery service users cite for their use of such services.

Online grocery shopping is a convenient alternative to in-store shopping because it allows customers to create their lists even after store hours and set a pickup or delivery appointment at a preferred time. Filling a shopping cart online can be done more efficiently by:

• searching for specific items
• making a shopping list and buying from it
• using shopping history to quickly put commonly purchased items back in the shopping cart.

Consumers who have mobility issues or lack reliable transportation tend to find the home delivery aspect especially convenient, since they do not need to leave their homes to shop.

Opportunities for Growth

As online grocery sales continue to grow and competition tightens, retailers are looking for opportunities to expand availability and to make grocery delivery and pickup more efficient and less costly. The future of online grocery will feature new technologies like drone and autonomous vehicle delivery, automated warehouses, intelligent voice ordering, virtual reality shopping environments, and better monitoring of product quality and stock. Automation in particular is necessary to increase speed of order fulfillment; reduce costs; and expand services to more customers, more areas, and more available products.

The Future of Grocery Report Details

Companies Driving Trends in the US Grocery Market

The Future of Grocery Report Scope

The Future of Grocery: Online Grocery, Meal Kits, & Direct-to-Consumer Food examines the dynamics of the current landscape of the online food and beverage market. Consumer demographics, perceptions, motivations, and behavior are examined as pertaining to dietary choices and use of food delivery and pickup services. Attitudes on food, diet, health, and product packaging are studied. Effects of recent historical trends on consumers – including the COVID-19 pandemic and the inflation era – are considered in both a broad sense and in the context of the online grocery market.

The reasons for and implications of shifts in consumer perception and behavior are analyzed in the context of present and future market opportunities.

Market size data are provided at the retail sales level for 2019-2024, and projections are provided for 2025-2029 and 2034.

This report provides information about online retail sales of food and beverages to consumers in the following product categories:

• shelf-stable foods and beverages in cans, bottles, or other packaging (including alcoholic beverages)
• meal kits and prepared meals
• perishables such as fresh fruits and vegetables
• dairy and egg products
• meat, poultry, and seafood
• bakery items
• frozen foods

This report includes online sales of such items from:

• store-based grocers (e.g., Kroger, Safeway, ALDI)
• mass merchandisers (e.g., Walmart, Target) and warehouse clubs (e.g., Costco, Sam’s Club, BJ’s)
• online-based grocers (e.g., Amazon, Thrive Market, Hungryroot)
• brands that sell their own food products via their websites, direct-to-consumer
• meal kit and prepared meal delivery services (e.g., HelloFresh, Sakara Life, Factor)
• third-party pack-and-deliver companies that use their own workforce to purchase groceries at various stores and deliver them to customers (e.g., Instacart)
• local co-ops and farmers’ markets that arrange for subscriptions, single orders, and pickup or delivery digitally

Online sales made via website or app – whether delivered to a customer via shipment or local delivery, picked up in-store, or received via curbside pickup – are all included.

Excluded from the scope of this report are:

• food and beverage products that consumers physically select in a store for purchase
• items bought by mail, fax, or phone order
• non-food items such as household cleaning products, pet food and toys, tobacco products, beauty products, kitchenware, and other similar products that tend to be sold by grocers and mass merchandisers
• revenue from restaurants and other foodservice entities such as cafeterias, bars, and caterers

Although this report does not cover restaurant sales, some survey data about restaurant use is provided since online restaurant ordering and delivery/takeout of restaurant food can compete with the online grocery market.