The Expanding Role of Online and e-Grocers in the U.S. Beverage Market

The Expanding Role of Online and e-Grocers in the U.S. Beverage Market

Packaged Facts, in the new report U.S. Beverage Market Outlook 2019, identifies three factors that have created a perfect environment for growth of the online grocery market in the U.S. since 2013:

  • increased mobile/smartphone usage
  • better website and mobile app interfaces
  • expansion of crowdsourced business models to shopping and delivery

Online sales of groceries more than tripled between 2013 and 2018 due to these factors but still accounted for only 2% of total grocery spending. Beverages accounted for an estimated 13% of total online grocery sales in 2018. According to One Click Retail, beverages are the top-selling grocery category for Amazon. Coffee is the company’s largest grocery segment, followed closely by cold beverages. Both segments are reportedly growing at high double digit rates.

Most of the online grocery sales growth has occurred since 2016 as e-commerce platforms and conventional grocery stores have increased both their participation and their geographic footprint with expanded service areas. Looking ahead to 2023, online grocery sales are forecast to more than quadruple as online options become more available and consumers become more open to trying online shopping or using online options more frequently to purchase their groceries.

The key issues over the next five years involve improving customer trust in terms of perishable selection by grocery packers and extending service to more geographical areas. Curbside pickup of groceries is growing extremely quickly, and the lower costs of pickup for both retailers and customers will give it an edge over home delivery models, which typically require that customers plan to be home during a two-hour window in order to accept delivery.