Like Ben and Jennifer, Brad and Angelina, and Cardi B and Offset*, Instacart and Amazon have broken up. In a blog post today, Instacart announced that it was winding down (consciously uncoupling?) its grocery delivery relationship with Amazon.
Like with so many other power couples, this breakup wasn’t entirely a surprise. Instacart and Whole Foods first hooked up back in 2014. The two then put a ring on it, as it were, with a five year deal signed in 2016. But then Amazon came in and bought Whole Foods in 2017. Totes Awk!**
Amazon has it’s own delivery service, so we kinda knew Instacart was going to be on the outs soon enough. The split will begin in earnest in February and continue ramping down over the months that follow.
The news itself has been extensively covered already, but what we are most interested in is: How is Instacart taking this, and what will they do next?
For its part, Instacart seems to be doing just fine. Whole Foods had been playing an increasingly smaller role in Instacart’s overall business. Whole Foods reportedly represented just 5 percent of Instacart’s revenue, down from 10 percent of revenue the previous year.
At least Instacart can sleep easy at night on its giant pile of VC money. Throughout 2018, Instacart has raised $950 million. So it’s got some runway to get out there, and meet new people. Actually, it’s been doing just that, expanding its relationships with Sam’s Club and Kroger.
Despite all that good news, I’m still a little worried about Instacart falling into the same patterns of relying on others. Sure it’s got some new partners, but where is the innovation? Team InstAzon announced their breakup on the same day that Postmates unveiled a shiny new delivery robot that it built in-house and will be scurrying around neighborhoods next year.
Kroger, too, is showing signs that it may not be Team Instacart 4EVR. It’s started building robot-powered smart warehouse and distribution centers (no need for Instacart’s human shoppers there) and testing out self-driving grocery delivery vehicles with Nuro in Scottsdale, AZ.
Hopefully, this break up will give Instacart the “me” time it needs to figure itself out, maybe finally take up robotics (or drones) and get to a place where it can live its best life.
*I’m too old to know who Offset is, but my millennial colleagues assure me that it’s worth putting him in there.
**Again, my millennial colleagues assure me that this is how the kids talk. Though I’m not sure why they had to stifle a laugh when telling me that.