1-on-1 With Instacart Chief Business Officer Nilam Ganenthiran

Jon Springer: Nilam, welcome to the Breakroom. How did your opportunity with Instacart arise?

Nilam Ganenthiran: My first job was as a cashier at a Food Basics (part of the A&P family) when I was 16. It taught me so much about how people think about groceries as part of their day-to-day lives. I went to college in Toronto and worked in various roles for Procter & Gamble both during and after college. At P&G, I developed a newfound appreciation for everything it takes to get groceries to customers, how stores work, and how this giant industry solves problems for consumers every day. After business school, I worked at A.T. Kearney as a consultant focused on serving grocery clients.

I was fortunate to be introduced to Apoorva, Instacart’s founder and CEO, through a mutual friend when he was first starting the company. As someone who has worked in grocery my entire life, I thought the idea of Instacart was really interesting because it uniquely addressed some major opportunities in our evolving market. It provided a solution to a problem that I had seen firsthand that the industry has been trying to solve for a long time: how to bring groceries online. I stayed in touch with Apoorva and was really impressed with his vision and leadership style. I wanted to be part of what he was building, and about a year later, I joined Instacart as one of our first dozen employees.

Flash forward to where Instacart is today—20,000 stores, 5,500 cities and 300 partners—it’s been an amazing ride, and we’re just getting started.

Having interviewed you and observed your interviews, in my opinion, you’re a deft handler of difficult questions. To what do you owe this skill?

I’ve had the great opportunity to work with partners of all sizes at varying stages of growth throughout my career. At Instacart, we work with more than 300 national, regional and local retailers, each of whom come with their own unique models, needs and ways of working.

One of the most important parts of my job is being able to put myself in the shoes of the person asking the question. I don’t look at questions as being difficult or easy. Instead, I try to focus on the facts and provide a response that’s rooted in reality and truth. An honest response and realistic solution are always better than simply saying what you think people want to hear. I think at the end of the day—when you’re focused on long-term relationships, and you have your partners’ best interest at heart—the difficult questions are the ones you actually want to talk about because those are the questions that need to be answered for the customer.

What’s the one thing about Instacart you wish the grocery industry understood better?

We fundamentally believe that brick-and-mortar retailers are the backbone of the future of grocery and they’re here to stay. These retailers have been around for decades, are in the right places and carry the right things for their customers. They’ve also earned the long-term trust and loyalty of their customers. We’re here to support brick-and-mortar retailers and provide them with tools and solutions that make their e-commerce offerings more robust and customer-oriented. Our goal is to be the operating system of the online grocery delivery space and to connect customers to the retailers they love. We want to be an extension of grocers’ businesses and can support them not only by bringing them onto our marketplace, but also by supporting all of their back-end, white-label needs.

What’s your take on the potential for more jobs in supermarket retail (cashiers, stockers, etc.) going to “gig” workers? How might Instacart play a role?

Instacart shoppers are independent contractors that pick, pack and deliver for stores on behalf of our retail partners’ loyal customers. By driving incremental business for our partners, Instacart is creating additional opportunities for in-store employees like stocking associates, cashiers and deli counter clerks. Their workloads increase alongside the increase in overall store volume. There’s a small grocer in San Francisco that we’ve been partnering with for years that’s a great example of this. The store has a small physical footprint, and street parking comes at a premium. We’ve seen their average online basket size increase by 30%—a meaningful lift in volume that requires additional in-store work by their full and part-time employees. Tops Markets, an amazing retailer we’ve worked with for years, also gave Instacart credit for playing a role in their financial turnaround last year.

Nielsen and FMI project U.S. online grocery to surpass $100 billion in sales as soon as 2022. From your perspective, how accurate will that turn out to be?

Grocery is a $1 trillion industry in the U.S. It’s two to three times bigger than books or apparel in the U.S., and bigger than transportation globally. Today, less than 5% of groceries are bought online. The opportunity is massive—we’re basically operating in a $1 trillion industry that’s been hiding in plain sight for years.

There’s no doubt that grocery has reached its tipping point. We believe growth in our industry isn’t just going to come from major metro areas. Many of Instacart’s fastest growing markets today are cities with less than 100,000 households. From Boston to Boulder to Boone, N.C., busy people and families in communities of all sizes are looking to bring their weekly trips to the grocery store online. At Instacart, we believe our core business can ultimately be much bigger than it is today as both consumer adoption and awareness increase over time.

What’s next for Instacart?

Instacart is available to more than 80% of U.S. households across all 50 states, and is now accessible to more than 60% of Canadian households. We’ve achieved accessibility, [and] now it’s time to focus on driving increased adoption and exploring new offerings that support our partners by bringing their entire catalog and footprint online in a meaningful way.

We recently expanded our alcohol delivery offering and have doubled down on our Instacart Pickup product. Thousands of Instacart partner stores are coming online with our pickup offering this year. We’re working hand-in-hand with each of our more than 300 partners to uniquely support their e-commerce efforts in a holistic way, lighting up their catalog via the Instacart marketplace and, in many cases, supporting all of their back-end and white-label needs.

The company that overdelivers on quality is going to lead and win in this space, so quality is another huge area of focus for us. Grocery delivery is incredibly complicated. Instacart shoppers are picking, packing and delivering from nearly 20,000 locations—about 50% of all grocery stores in the U.S.—and shopping from an average of 30,000 SKUs in any given store. It’s imperative that customers are getting the right brand of formula for their babies and all of the ingredients for that night’s dinner. Over the last six months, we’ve made meaningful investments to improve quality for customers with a focus on out-of-stock items, replacements and shopper-customer communication. These investments have been a significant growth driver for customer satisfaction and will continue to be a focus for us in the year ahead.

Lightning Round 

Coolest place to shop for groceries in San Francisco?

Hard to choose, but we’ve partnered with all the hometown favorites: Bi-Rite, Berkeley Bowl, Gus’s, Mollie Stone’s, Lucky’s and Rainbow Grocery.

Burrito or burrito bowl?

Burrito.

Most deliveries for one customer?

4,000—power user!

Three favorite all-time Blue Jays?

Joe Carter, Roy Halladay, John Olerud.