US Grocery Delivery Service Market Research
Author: Mary Schwab
Online grocery shopping in the US has been around since the late 1990’s, but it had not seen a drastic pick up in popularity until recent years. In 2015, only 8% of U.S. consumers were likely to buy groceries online, but that grew to over 30% by 2017.
While 30% of US consumers shopping online for their groceries may seem like a small amount, the value of the US online grocery market is growing at a fast pace. The market grew to $26 billion in 2018, from $12 billion in 2016. Analysts expect the market potential for online grocery delivery to continue to sky rocket, as it is the fastest growing product category online.
The consumers in the US who are utilizing online grocery delivery are usually younger and skew male. At no surprise, millennials are spearheading online grocery shopping. Data from Information Resources Incorporated (IRI) found that 55% of 25 to 34 year-olds considered themselves very or somewhat likely to purchase groceries online. A May 2018 study conducted by Morning Consult found that males were more likely than females to have purchased groceries online.
The current key players in US based online grocery delivery are Amazon and Walmart. 31% of US online grocery shoppers (who have shopped online for food and groceries in the past 30 days) said they purchased groceries online from Amazon in 2018. Conversely, a third of respondents said they purchased groceries online from Walmart in 2018.
Online grocery delivery is clearly a much loved convenience and a time saver, and it’s an industry that will continue to grow at a fast pace. Unfortunately, it is also a major contributor to the production of waste. Groceries are packaged in excess bags, boxes and cooling mechanisms while being transported from the store to the consumer’s home. As reported in Fast Company, about 165 billion packages are shipped in the US each year, with the cardboard used roughly equating to more than 1 billion trees. If you look specifically at meal-kits, category leader Blue Apron sends out around 8 million meals a month, each one containing two six-pound ice packs. The freezer pack waste is about 192,000 tons per year.
According to Waste Management, only 1% of plastic grocery bags (obtained via in store purchases or online) are returned for recycling. That means that the average US family only recycles 15 bags a year; the rest end up in landfills or as litter. Although plastic bag production creates less waste than paper, they remain with us for a long, long time.
Because of the drastic negative impact that grocery bags places on the environment, US consumers and legislators desire to limit the waste production in grocery service. In 2018, 39% percent of US consumers aged 18 to 29 years stated that they used reusable grocery bags made from cloth or other materials. We are seeing more and more states implement single use plastic bag laws. Eight states—California, Connecticut, Delaware, Hawaii, Maine, New York, Oregon and Vermont—have banned single-use plastic bags. California, New York, and hundreds of municipalities in the U.S. ban or fine the use of plastic in some way.
There is clearly a disconnect between how consumers package and bag their groceries in store versus online. Many consumers desire, or are required, to utilize reusable bags when grocery shopping in store. Unfortunately, packaging preferences are not yet built into the online grocery delivery service logistics, and the packaging waste these services produce will continue to grow.
References:
https://www.businessinsider.com/online-grocery-report
https://www.emarketer.com/content/five-charts-the-state-of-online-groceries
https://www.aboutamazon.com/sustainability/packaging
https://www.statista.com/topics/4876/us-online-grocery-shopping-consumer-behavior/