How Online Grocery and Direct-To-Consumer Models are Reshaping Food Retail

According to William Blair, over the past 20 years, the food retail industry has remained mostly unaffected by online competition. This is likely due to the long list of logistical challenges associated with delivering fresh food. Additionally, potential buyers have expressed an innate reluctance to trust online providers with the task of selecting their produce, meat, and other perishable goods. This has historically hampered an overall shift towards online food shopping.

Throughout the last three years, however, we’ve experienced acceleration as the online food industry saw a surge in consumer adoption of online grocery, meal-kit delivery and other direct-to-consumer models. A major inflection point of note was reached in June when Whole Foods Markets was acquired for $13.7 billion by Amazon.

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