Publix, Kroger Want Shoppers to 'Break Up' With Restaurant Takeout

Beginning Jan. 13, Publix loyalists hungry for a sub sandwich, Kroger shoppers salivating for sushi and Giant customers craving a calzone, can visit online grocery platform and third-party partner Instacart’s newly launched Ready Meals Hub and start shopping for hundreds of dishes and groceries delivered from the store to their door in as fast as 30 minutes.

Instacart’s new in-app destination features prepared foods from grocers such as Publix, Giant, Food Lion, Hannaford, Stop & Shop, Martin’s and Kroger. In the coming weeks, ready-made meals from ShopRite will also be featured in the Hub.

From freshly prepared grab-and-go salads and sandwiches from Publix, to soups and sushi from Kroger, to rotisserie chicken from Food Lion, customers across 35 states can now access the Ready Meals Hub to get prepared meals delivered from more than 4,100 grocery stores, San Francisco-based Instacart said. 

Born from success with its “virtual convenience store” that launched at Kroger and Stop & Shop locations late last year, the online platform’s new hub is an opportunity to represent grocers in the high-margin meals business, Instacart Head of Product Daniel Danker told WGB.

“It’s an opportunity for grocers to deliver healthy, high-quality meals at better prices. There’s greater value to the customer and more quality. That’s why we call it ‘break up with takeout’—it solves the guilt associated with purchasing restaurant meals,” said Danker, who said he personally finds the healthfulness and quality are often lacking relative to the price of a meal delivered from a restaurant.

“Instacart’s solution to showcase prepared meal items is a win for our customers,” said Erik Katenkamp, Publix VP of omnichannel and application development, in a statement. “In addition to the convenience of being able to order freshly prepared ready-to-eat and ready-to-heat items for rapid delivery, our customers can also pick up a handful of grocery staples with their meal—making it easier than ever to grab lunch and a few items to put together tonight’s dinner, all in a single order.”

As Instacart further expands into the meals business with its grocery partners, the company is eying the U.S. chilled and deli food market size, which it said was expected to reach more than $40 billion as of October 2021 and is projected to reach more than $108 billion by 2026, according to market analytics firm Research and Markets. For retailers, order-ahead items and prepared foods are typically more profitable than traditional groceries like produce and packaged goods.

Additionally, Instacart points to data from FMI, which finds ready-made foods can play a big part in people’s daily food prep. Most meals in North America are prepared at home (73%), but the majority of these meals involve a combination of prepared and from-scratch elements (55%), and most include time-saving “ready-to-eat” items like premade salads and ready-to-eat meat as elements (64%), the organization said.

On the Instacart platform, customers who purchase prepared foods and catering items like hot and cold side dishes, cakes and sushi have significantly larger baskets and shop more frequently than those customers who do not, said the company.

Instacart customers who order meals, order two times as frequently as regular customers, Danker said. Customers of the third-party platform who order two meals at a time also order on average 19 non-meal essentials with their meals purchase.

“They’re ordering lunch or dinner and loading up the fridge at the same time,” added Danker, who said there are some key new features to the Instacart meals hub.

“We’re creating a dedicated experience for ready meals—a dedicated hub. Before, most customers were ordering groceries on the platform and then added meals to their order. This is different,” he explained. “They are coming to order lunch or dinner and adding other items. They’re also taking advantage of free priority delivery for orders over $10 in as fast as 30 minutes.”

The launch of Ready Meals follows Instacart’s recent acquisition of FoodStorm, a SaaS order management system (OMS) that powers end-to-end order-ahead and catering experiences for grocery retailers. FoodStorm’s offering covers multichannel ordering, including e-commerce, phone or in-store kiosk, as well as order management, payment and fulfillment.

Over the coming months, in addition to expanding FoodStorm’s technology to new partners on the Instacart Marketplace, Instacart expects to expand the Ready Meals Hub to feature several more grocers and will work to make Ready Meals available to more retailers, the company said.