E-commerce in the food retail sector is changing, with the arrival of pure players that provide a range of attractive services in addition to the basic produce.
Today most companies in the mass retail business offer home delivery, but modern consumers often expect more than just delivery to their door. In May this year, US startup Blue Apron announced it had officially closed a $50 million Series C round of funding. The New York-based company, founded in 2012, offers home delivery of fresh, high-quality foodstuffs geared to a menu plan. It will bring you all the ingredients in exactly the right proportions, ready to cook a particular set of meals, promising a revolution in culinary habits in the home. The recent success of brands which specialise in culinary offerings demonstrates how the food retail business is changing in line with busy consumers’ new needs. Competition in this market is still sluggish, but this is changing fast on both sides of the Atlantic.
Ready-to-cook food with associated services
The pure players who specialise in home delivery of fresh foods stand out with the services they offer in addition to their basic produce. Blue Apron, the latest success story in this market, provides a weekly list of original recipes which customers can choose from in order to prepare their menus for the week. The company packs up the fresh food in the exact proportions necessary for preparing the dishes and delivers to people’s houses daily. Using the recipes provided, it will take customers only thirty minutes to cook an excellent meal, without going to the trouble of shopping and avoiding the risk of buying too much and ending up with wasted food. The Blue Apron offering is not unique. Other US companies, such as Plated, also based in New York, and Berlin-based Hello Fresh, offer an almost identical service. “The future of online food retail lies in the companies’ ability to offer services alongside the basic produce,” argues Alain Wiesenbach de Lamazière, an expert in e-commerce who founded the consulting firm AWdL Consultants.
Consumers’ changing food-buying habits
It would seem therefore that online grocers are going to have to become service providers rather than just food suppliers. We should not forget however that food retailers can also differentiate themselves through the sheer quality of the produce they deliver. According to Alain Wiesenbach de Lamazière, the average food basket ordered on the Internet costs €120. “People are prepared to pay for high quality service and product,” he underlines, which is what has made the US startups a success. “In France, it’s easy to find food stores selling high quality produce, but in the United States there are far fewer stores retailing fresh foods – a good butcher or a good greengrocer, etc, so it’s more difficult for Americans to get hold of this kind of foodstuff," he points out. Meanwhile in France the mon-marché.fr website, which offers a similar home delivery service for fresh food from the Rungis International Market in the south of Paris, has also been posting strong growth.