Uber and startup GoPuff just struck a delivery deal. Here are the 13 companies competing for dominance of the $100 billion grocery industry.

Uber eats app on background of food menus

Summary List Placement

The pandemic might be easing in the US, but competition between companies that deliver groceries and other essentials keeps heating up.

Uber and GoPuff, which have been pushing deeper into grocery delivery, said Tuesday that they struck an exclusive partnership to offer GoPuff’s inventory of chips, over-the-counter medicines, and other items for sale through Uber Eats. The partnership will kick off in 95 cities in June, and the companies plan to expand it to the entire US by summer’s end. 

The partnership will use GoPuff’s network of microfulfillment centers around the country to fill orders placed through Uber Eats, the companies said. That model separates GoPuff from Instacart, which relies on filling orders directly from shelves at retailers.

“With this partnership, we are able to leapfrog the competition in using Gopuff’s network of microfulfillment centers to instantly meet consumer demand for thousands of products—and I’m incredibly excited about the opportunities ahead,” Raj Beri, Uber’s head of grocery and new verticals delivery, said in a statement announcing the partnership.

Instacart remains a dominant player in the online-grocery-delivery space, which is projected to reach more than $100 billion in sales in the US in 2021.

But with the pandemic accelerating e-commerce food purchases, Instacart is not alone in attempting to take advantage of the industry’s growth. The San Francisco-based giant, rumored to be launching an initial public offering later this year, faces new challengers in the highly fragmented sector. Besides Uber and GoPuff, others include DoorDash, Weee, and a variety of local delivery startups like Fridge No More and Farmstead. 

At the same time, many first-time online-grocery buyers are expected to go from “trial to habit” in 2021, according to a February eMarketer report.

“Many low-propensity buyers will return to their pre-pandemic purchase behaviors once the threat is sufficiently mitigated through vaccines,” Andrew Lipsman, an eMarketer analyst at Insider Intelligence, said. “Other consumers, now acclimated to the process of buying groceries online, will do so on an occasional basis. And many who developed a regular habit around buying groceries online will carry the behavior forward.”

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Insider put together a list of companies expanding or launching online grocery operations in the US to better compete with Instacart. Here are 13 brands trying to cement their place in the booming US grocery-delivery market.

Farmstead

Total funding: $14.5 million 

Notable investors: Y Combinator, Resolute Ventures, Aidenlair Capital. 

CEO: Pradeep Elankumaran 

Year founded: 2016

Cofounders Pradeep Elankumaran and Kevin Li launched Farmstead to deliver essential groceries to shoppers clustered in neighborhoods within a 50-mile radius. Farmstead delivers multiple grocery orders from one delivery driver, which allows the startup to offer free same-day delivery to customers who spend $35 or more. The platform also offers on-demand delivery within an hour for a $5 fee. 

Unlike Instacart, Farmstead does not deliver from retail partners. Farmstead keeps overhead costs at bay by delivering groceries from “dark” or ghost warehouses, similar to how GoPuff operates. Farmstead sources its goods directly from local farm distributors, as well as distributors of national brands. From time to time, Farmstead sources directly from farmers. 

Farmstead additionally …read more

Source:: Business Insider – Tech

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