Exploring the Strategies and Impact of 30-Minute Delivery Services in the Food, Alcohol, and Grocery Industries

by | Apr 20, 2022 | Food Delivery

Woman accepting 30-minute delivery of groceries

As a key player in the food industry, you have already seen the growing demand for grocery delivery. The latest trend in this market is ultra-fast delivery, which includes 30-minute delivery of food and beverages. Today we examine this new trend in more detail and how you can use a similar service as part of your omnichannel strategy for food retailers.

Key Takeaways:

  • More consumers are using online grocery services today than before COVID-19.
  • Instacart recently introduced a 30-minute delivery option for ultra-fast groceries.
  • Building a faster delivery model requires more locations, more staff, and fewer item options.

Online Grocery Delivery Service Trends in 2022

The online grocery delivery services market will grow by $631.85 billion between 2020 and 2024 at a 29% CAGR. Individuals still dominate the online grocery market as the prime users of this service. The grocery delivery market saw some of its most considerable growth during COVID-19 as consumers preferred to shop through contactless methods and avoided crowded public areas like supermarkets.

Online grocery delivery services market grows over $630 billion from 2020 to 2024.

Image from BusinessWire

The Future of Online Grocery Delivery

Current trends show that grocery delivery services are on the rise, even as more people return to physical grocery, food, and alcohol locations. To keep up with demand, businesses are offering more competitive and speedier options for consumers to receive grocery, food, and beverage goods.

For example, Door Dash’s popular grocery delivery service reported that consumers only performed 3 to 4% of grocery shopping online before COVID-19. However, in 2021 that rate grew to 60%. Many shoppers prefer the convenience of online grocery shopping and delivery and will continue to use it for the foreseeable future.

How Fast Delivery is Changing in the Food and Beverage Industry

Between first-party delivery and third-party delivery companies, consumers have dozens of options for getting their food and beverages to their homes. Businesses are therefore finding ways to stay on top of their competition by increasing delivery speed. According to one survey, about 54% of shoppers prefer their groceries within the hour. Businesses are striving to meet or exceed that demand using modern technology and creative strategies.

Survey results asking respondents how important ultra-fast delivery is to them.

Image from Pitney Bowes

Even though ultra-fast speeds under an hour are not a top priority for today’s consumers, businesses are preparing for the future by offering the fastest speeds possible to stay ahead of their competition. Companies can increase their speeds using modern technology in the food industry to streamline ordering and delivery processes. Here are some of the fastest delivery times available from the most popular grocery delivery services in 2022:

  • Instacart: Same day, 1-hour, and 30-minute delivery options
  • Walmart +: Same day and 2-hour delivery options
  • Shipt: Same day delivery and 1-hour delivery options
  • FreshDirect: Same day delivery and 1-hour delivery options
  • AmazonFresh: Same day delivery and 2-hour delivery options

The Future of 30-Minute Delivery in the Food and Beverage Industry

One of the most impressive delivery speeds in the previous list is Instacart’s 30-minute delivery option. They aren’t the only ones trying to push ultra-fast delivery speeds. Some grocery startups even promise groceries in as short as 10 or 15 minutes. While those faster speeds have yet to show a noticeable profitable return or large market, the 30-minute food delivery trend is worth watching in 2022.

Is 30-minute grocery delivery worth the cost, and is there a market for this service? Instacart seems to think so, and so do other companies. Instacart leads the way in the 30-minute delivery market as they reach more than 5,500 cities in North America, which includes over 85% of U.S. households and 90% of Canadian households. Here are several benefits and challenges of this new ultra-fast delivery trend.

Benefits of 30-Minute Delivery

Since 30-minute delivery is still new on the market, businesses that want to be part of the ultra-fast delivery trend will have a competitive edge over other delivery services. The key to achieving this advantage is providing consistent fast service – which can be difficult when reaching sparsely populated areas or places with high traffic. However, those that can find a way to get to more regions with speedy services could dominate the grocery delivery industry in the future.

Challenges with 30-Minute Delivery Options

Not every ultra-fast delivery service is successful, as a report from Domino’s pizza proves. The company mentioned that some of their challenges with 30-minute delivery included dealing with labor shortages, supply chain issues, and wasted time. One example cited was how much time they lose when drivers leave the vehicle instead of only being responsible for driving orders to customers. The CEO of Domino’s mentioned that the most important issue to resolve is streamlining your delivery process as that can also resolve other issues like labor shortages since the work will be more manageable for the staff you currently have.

3 Strategies for a Successful 30-Minute Delivery Service

Explore three of the top strategies that Instacart and other startups use in their 30-minute delivery service. These secrets to success are proven methods for reducing costs while streamlining delivery processes. They will help you avoid issues that companies like Domino’s encountered regarding labor, supply, and timing challenges.

1. Offer Fewer Items at a Higher Rate

Businesses that offer 30-minute delivery speeds also include an item limit to make faster speeds possible. Third-party grocery and food delivery services will often avoid these smaller orders because the order has a smaller payout and tip. However, by offering 30-minute delivery at a slightly higher rate, businesses encourage workers to pick up these orders. For example, Instacart charges $2 more for most 30-minute deliveries. Even with the surcharge, 20% of customers still chose this option.

2. Build Multiple Dark Stores

Dark stores are retailers that operate as fulfillment centers. They are becoming essential to grocery stores that offer ultra-fast delivery because of the increased demand for delivered groceries within a small shopping area. Big brands like Walmart and Target use hybrid dark stores to help fulfill delivery orders in densely populated areas. These dark stores are used alongside traditional stores.

3. Hire a Large Number of Delivery Personnel

A large fleet of delivery personnel help delivery services achieve their goals of 30-minute alcohol, food, and grocery delivery. For example, Instacart has over 130,000 full-service shoppers and more than 12,000 in-store shoppers. They use this army of employees to reach over 5,500 cities throughout North America. Businesses can minimize the number of new employees they need to hire by using advanced workforce management to streamline the duties of the workforce they already have.

Attend Our Next Exhibition

With so many options for fast grocery delivery, food retailers might consider adding ultra-fast 30-minute delivery options to their business model. Attend SIAL America to learn more about the latest trends in grocery delivery. You can also exhibit your business to connect with other food retailers.

Contact us to learn about our next event.