Why Some Instacart Customers Now Have Access To Catering Options
Instacart has unveiled its newest feature to expand capacity for catering orders using the technology it purchased last year. In a statement, the company revealed that it has officially integrated its FoodStorm operating system into the main grocery shopping app.
FoodStorm was originally developed by an Australian company as software for catering businesses to manage orders (per Crunchbase). Grocery Dive reported in October 2021 that Instacart had purchased FoodStorm, which already had contracts with grocers using Instacart. Supermarket News noted that FoodStorm was already processing $1.5 billion in catering orders per year at the time of the acquisition.
The move was promoted as a benefit to the grocery vendors, who Instacart reported had complained of wanting to expand their pre-prepared food offerings and catering services, which are a profitable business for stores. While Instacart had continued to run FoodStorm for existing vendors, as of August 4, 2022, the service has been merged into the Instacart app to make orders easier for more customers.
Currently, only one grocery chain has begun offering catering through Instacart. Uncle Giuseppe's Market, a specialty Italian grocery chain in New York and New Jersey, had already worked with FoodStorm and is now offering catering offers to Instacart shoppers in its service area.
A boost in sales
Instacart is hopeful the expanded catering options will be a benefit to its store partners and its own business. "Catering represents one of the highest margin categories for grocers, driving meaningful incremental growth for their business as consumer demand increases," said Instacart's Vice President of Product Jeanette Barlow, in the company statement. "In the first half of 2022, we've seen nearly a 20% increase in customers searching for 'catering' on Instacart compared to the same period last year." With the high-demand holiday season coming up, the company hopes the change will make ordering easier for stores and consumers.
The boost in business could come at a critical time for the online grocery service as inflation and rising food prices have caused many users to abandon the home delivery app and return to in-store shopping to hunt for better deals and avoid costly service fees. According to Morning Consult, the number of households who reduced their order frequency to less than once a week on services like Instacart dropped by up to 29% between October 2021 and April 2022.
The catering roll-out was the second big announcement for Instacart this week which could increase business. Yahoo Finance reported on August 2, 2022, that the service has revealed that SNAP recipients can use their cards on the app. Following the new expansion, SNAP recipients will be able to use their benefit cards on the app at 60 retailers in all 48 continental states plus Hawaii and Washington, D.C.