The news: Customers will now be able to order ready-made meals from grocery retailers via Instacart, per a company announcement.
How we got here: While Instacart currently dominates the market for third-party grocery delivery services, with 73.8% of grocery intermediary sales in 2021, it faces significant challenges on several fronts.
With that said, Instacart’s success is not solely due to its delivery dominance: Its advertising platform has become a significant source of revenues, generating $550.0 million in 2021.
The opportunity: Instacart noted in its release that customers who buy prepared foods and catering items “have significantly larger baskets and shop more frequently than those who do not.” Retailers also generally get more profit from selling these items than “traditional groceries.”
The big takeaway: While the company has not yet made definite plans for an IPO date, its recent actions reveal a company attempting to prove long-term worth to investors by finding new revenue streams and thwarting would-be competitors.