A newly released report from Nielsen and the Food Marketing Institute (FMI) saying that online sales of food and beverages will reach $143 billion by 2025 (hat tip to Grocery Dive). Nielsen and FMI also said that this $143 billion will represent 30 percent of all omnichannel food and beverage sales.
What’s notable about these new figures is how much online grocery shopping is accelerating. In 2017, Nielsen and FMI predicted that online grocery sales would hit $100 billion by 2025. The two firms then updated their figure last year to say online grocery shopping would hit $100 billion between 2022 and 2024.
This acceleration is due in part to the logistics and delivery infrastructures being put in place by retailers. Grocery Dive writes that according to Nielsen and FMI, things like Amazon auto replenishment, two-hour delivery and the widespread availability of buy online and pick up at stores are contributing to the boost in online sales.
We’ve written before about how grocery retailers are in a Field of Dreams scenario. All the major grocery chains are investing heavily in logistics and building out delivery infrastructure now for the online grocery shoppers to come. Amazon waived its delivery fee for Prime members. Walmart is rapidly rolling out its Delivery Unlimited program nationwide. Albertsons is building out micro-fulfillment centers. And Kroger is doing everything from robot-powered fulfillment warehouses to testing self-driving grocery delivery vehicles.
All this investment will (and is, evidently) moving more people towards buying groceries online.
And in what may come as a surprise, “the olds” are driving this adoption of online grocery shopping. Nielsen and FMI found that shoppers between the ages of 45 and 64 held the largest amount of omnichannel grocery spending. Gen Z shoppers still prefer to do their grocery shopping in-store.
I expect we will see continued acceleration in the space, especially as grocery stores expand the delivery of food to include things like deli and made to order meals.