Progressive Grocer

JUN 2016

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Millennials are known for their passion for food. And as the frst generation to grow up us- ing the Internet, with access to any and all information at their fngertips, they feel they can eat whatever they want whenever they want. To capture share of stomach in this crucial demographic, more and more startup companies have plunged into the meal delivery market in urban areas. Some busi- nesses, such as San Francisco-based services Sprig and Munchery, ofer meals on demand in a growing number of cities, with their own chefs preparing food in indus- trial kitchens. Other companies, including GrubHub and UberEATS, team up with local restaurants to deliver meals quickly—at the touch of a button on a mobile app. "For supermarkets to be attuned to the needs of their customer base, particularly millenni- als, they must be in this space," says Phil Lem- pert, a grocery industry analyst in Santa Monica, Calif., and editor of Supermarketguru.com. Te aging baby boomer generation is another potentially big market for modern-day meals- on-wheels services, he adds, noting that dishes for this demographic— facing high blood pressure, diabetes and other chronic medical conditions—would need to cater to diferent dietary considerations. Switching gears Although a number of supermarket chains partner with Instacart and similar services, such as DoorDash and Envoy, to deliver online-ordered groceries to customers' homes, few if any grocerant retailers deliver individual meals on demand, observes Jeremy Johnson, education director for the International Dairy-Deli-Bakery Associa- tion (IDDBA). "Supermarkets are traditionally driven by volume when it comes to delivery," he says. Grocery industry consultant Steve Dragoo says he also hasn't seen any supermarkets ofer delivery of prepared meals yet. "I think this is a huge opportunity for retailers who understand who they are and their clientele and operate in population-dense areas where they could ofer delivery," says the owner of Solutions Consulting, which is based in the Nashville, Tenn., area. But some infrastruc- ture changes and branding initiatives will have to be im- plemented before prepared food delivery becomes feasible for grocerant retailers. GrubHub, UberEATS and similar companies have not pursued rela- tionships with grocery stores in part because of the perceived logis- tical challenges of driv- ers having to park in large supermarket lots, 36 SOLUTIONS JUNE 2016 Delivery on demand Adding prepared food delivery is vital for grocerants, say industry observers. BY C A RO LY N S CH I ER H O R N Meal delivery services like San Francisco-based Munchery set a high bar for prepared food quality. COURTESY OF MUNCHERY

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