Do grocers need a separate service for online prepared foods?

Dive Brief:

E-commerce provider Mercatus has teamed up with DoorDash to help deliver fresh meals, catered foods and other options that fall under the restaurant delivery company’s specialty.
Once an order comes in through Mercatus’ platform, DoorDash Drive, a white-label fulfillment service, sends out a worker to gather the order and complete the delivery in under an hour. The entire experience occurs under the retailers own website and branding.
“As shopper expectations evolve, retailers are seeking new ways to expand their offerings and create a diversified shopping experience,” Sylvain Perrier, president and CEO of Mercatus, in a statement.

Dive Insight:

Prepared foods is one of the fastest growing categories in grocery, but transferring those sales online has proven a challenge for retailers. Most don’t offer their full assortment. And promoting sensory-driven offerings on a website is much more challenging than in stores.

Could enrolling a separate service be the answer? For grocers that do a big business in foodservice and prepared foods, the answer could be yes. Having workers specially trained to measure out and pack up hot bar, salad bar and other offerings could be an added value, and could help grocers build out this side of the business without disrupting traditional grocery delivery. Grocers would also do well to get their foods listed on popular restaurant delivery sites.

Mercatus’ tie-up with DoorDash is the latest example of companies offering separate services for prepared foods. Last month, Wegmans launched a prepared food delivery app at its Pittsford, New York flagship store. Earlier this year, H-E-B bought Favor, an on-demand delivery company that specializes in fielding restaurant orders. Under the grocer’s ownership, Favor has grown from 50 cities in Texas to 84 and plans to reach 114 by next year.

In a recent interview with Grocery Dive, Diana Sheehan, vice president of retail and shopper insights with Kantar Consulting and a close H-E-B follower, said she believes the retailer will use Favor to deliver its robust selection of prepared foods and in-store restaurant selections. H-E-B stores offer everything from breakfast tacos to barbecue joints and pizzerias.

Right now, restaurants are the go-to for meal delivery, especially as services like DoorDash and GrubHub have grown. But supermarkets want in on that business, particularly as they’ve pumped money into their prepared foods business. Grocers also have the advantage of being a one-stop shop for fresh and shelf-stable products as well as meals. Creatively bundling meals with grocery accompaniments could, in fact, be key to expanding both business streams.

Grocers are already breaking out separate delivery services for alcohol, so why not prepared foods? The key is making the experience seamless for the customer. As consumer demand continues to push grocers outside their core competencies, retailers will have to sign on additional partners. But adding operational steps shouldn’t translate into additional steps for shoppers.