Today, mega grocery chain Albertsons announced the launch of O Organics Market, a virtual store powered by Instacart and specializing in organic and natural grocery items. The store is currently available to customers in San Francisco and Washington D.C. via the usual Instacart interface.
The basic premise is that it makes it easier to find natural and organic brands like Albertsons own in-house O Organics and Open Nature private labels, although other brands (think Annie’s or Horizon) will also be available.
To access the market, customers just use their Instacart account and choose O Organics Market from the list of stores. So long as you’re in one of the areas the market currently serves, groceries can be delivered to your door within two hours.
O Organics is, according to Albertsons, the nation’s largest USDA-certified organic brand. Back in January, it became a $1 billion brand, a milestone following (though not solely because of) the addition of 200 more products and a 15 percent jump in sales.
Creating a highly curated market isn’t something we’ve seen from major grocery retailers before, but that’s not to say there aren’t similar concepts out there. They just happen to come from smaller entities. Good Eggs, for example, has a grocery and meal kit delivery service for Bay Area residents that specializes in fresh, organic product, many of them from nearby areas of the Bay. In fact, the company claims over 70 percent of its inventory is local. Farmstead, too, also offers the Bay Area same-day delivery of natural and organic brands, again with an emphasis on locally sourced or homegrown foods.
Over in D.C., Glen’s Garden Market has partnered with Mercato for same-day delivery of organic and natural groceries. Glen’s is a top-rated grocery store in the D.C. Metro Area, focusing on the importance of fresh, local foods and an environmentally conscious business model; it’s partnership with Mercato makes sense, since the latter is a carbon-neutral company.
Albertsons plans to expand its O Organics Market to other parts of the country, where it will face similar and probably bigger competition. Case in point: Walmart just announced a grocery e-commerce facility here in NYC for its Jet.com subsidiary, adding yet-another same-day delivery option for us New Yorkers when it comes to getting our groceries. The service will start this fall.
Finally, GrubMarket, which delivers grocery items to consumers at a discount, just got a $32 million investment that will go towards acquisitions and further growth ahead of an IPO. The company plans to expand from its native California to the East Coast.
Of course, all that local competition pales in comparison to what Albertsons will have to contend with when facing down the Amazon-Whole Foods behemoth, which began rolling out two-hour delivery earlier this year. Whole Foods was also added to Amazon’s upcoming Prime Day, where members will get 10 percent off sale items and “deep discounts” on other products, which will presumably include Whole Foods’s own branded 365 Everyday Value line.
In that light, the launch of O Organics five days before Prime Day doesn’t look like much of a coincidence.