Sprouts Farmers Market rolls out Instacart-powered retail media network

Specialty grocer Sprouts Farmers Market has launched a retail media network via Instacart’s advertising platform, providing a pathway for health-focused CPG brands to directly target Sprouts’ shoppers, the companies announced Wednesday.

Instacart’s Carrot Ads platform allows Sprouts and other retailers to operate retail media networks on their own websites and apps.

Califia Farms, General Mills, Primal Kitchen and Siete Family Foods are among the first brands engaging with Sprouts’ e-commerce platforms.

A little over 12% of Sprouts’ business comes through digital channels, the grocer said in releasing its first-quarter sales this week.

“At Sprouts, we are committed to serving our health-enthusiast customers and are excited to offer new ways to connect them with our innovative and distinctive brand partners,” Sprouts COO Nick Konat said in a statement. “By leveraging Instacart’s ad technology, we are enabling this connection—and giving our brand partners even more ways to grow with us and our customers.”

Sprouts Farmers Market partnered with Instacart to launch a retail media network. / Image courtesy: Instacart

The partnership allows advertisers to target and optimize dedicated online campaigns on Sprouts’ channels, giving CPGS access to performance metrics including attributed sales and return on ad spend, Instacart said.

It also opens up more advertising opportunities for emerging brands, allowing them to target the niche audience of Sprouts’ shoppers, the companies said.

“We’re thrilled to continue partnering with Instacart and Sprouts because we recognize that many people seeking delicious, dairy-free products are turning to both online platforms,” Halee Patel Newton, VP of e-commerce at Califia Farms, said in a statement. “Thanks to Carrot Ads, our online ad campaigns can seamlessly extend across both sites, which allows us to reach a broader audience and increase our brand’s visibility. This approach makes managing multiple campaigns easier and less complex as we scale.”

Phoenix-based Sprouts first began working with Instacart in 2018, when the grocer added same-day delivery. Instacart launched its retail media network, a self-service ad platform, in 2020 and has continued to add functionality in the years since.  

Retail media networks have grown to become a major revenue opportunity for grocers, as CPGs look to maximize their spend with highly targeted advertising.

Media investment firm GroupM last year predicted that retail media advertising will increase about 60%, to $160 billion, by 2027. And a Wakefield Research report found that 64% of CPGs expect to increase their retail media spending in the next year.

Sprouts operates 395 grocery stores in 23 states. The grocer is known for its produce selection and its curated selection of products catering to specific diets.

For the quarter ended April 2, the retailer reported same-store sales growth of 3.1% and net sales of $1.7 billion, a 6% increase from the same period a year ago.