Instacart Gets Serious About Grocery Catering

Customers can now order catering from the grocery store and have it delivered via the Instacart app, the delivery provider announced Thursday.

Traditionally, grocery catering has been handled in an old-school fashion, with grocers managing these orders on spreadsheets or with pen and paper. And customers have typically placed their large-format orders by calling the store or walking in.

But San Francisco-based Instacart last year acquired FoodStorm, an order-management system that focuses on grocery catering.

FoodStorm’s technology is now fully integrated into Instacart’s platform, the company said.

“Catering represents one of the highest-margin categories for grocers, driving meaningful incremental growth for their business as consumer demand increases,” VP of Product Jeanette Barlow said in a statement. “In the first half of 2022, we’ve seen a nearly 20% increase in customers searching for ‘catering’ on Instacart compared to the same period last year.”

The integration with FoodStorm allows grocers to set up a digital catering offering directly on their Instacart app storefront to provide online ordering and delivery. Catering customers can select next-day delivery or they can schedule a delivery or pickup up to a week in advance, the company said.

“Customers have the added convenience of being able to order grocery items—such as beverages (including alcohol in certain states), paperware, or side dishes—directly alongside their catering order for delivery all at once,” Barlow said in an email interview with WGB.

Uncle Giuseppe’s Marketplace, a grocer with 10 locations in New York and New Jersey, is the first retailer to use the new catering platform. The chain increased its online sales nearly 62% during recent holiday seasons after implementing the new program as more customers “discovered” the grocer’s catering selection, Catering Director Russell McVeigh said in a statement. Even with the increased catering demand, the new platform allowed the retailer to “handle that volume without crippling our in-store operations or without having to scale our staff,” McVeigh added.

With restaurant prices soaring, grocers should expect to see increased catering interest from shoppers, Barlow said.

“As inflation and other economic pressures impact households, more and more people are turning to grocery stores for easy meals and prepared foods instead of takeout,” she said. “For grocers who are also facing economic pressure, prepared food and catering items are typically some of the most profitable items sold in-store.”

Instacart, which declined to say how much it paid for the tech company, said it will continue to integrate FoodStorm’s order-management system with the offerings on its platform.

While restaurant catering programs have evolved and expanded over the years, they’ve remained “relatively stagnant” at the grocery store, she said.

“In conversations with our grocery partners, we’ve learned that easier ordering of prepared foods and catering items has become increasingly important to their business and customers,” Barlow said.