Grocery stores have emerged as a primary place for COVID-19 infections, according to a study published in the journal Nature. The study analyzed cellphone mobility data of 98 million people. Most alarmingly, Nature found that grocery stores in low-income neighborhoods are likelier places of COVID-19 spread than stores in higher-income areas. This higher likelihood is due to occupancy rates in grocery stores. Grocery stores in lower-income neighborhoods have 60% more people on average by square foot and shoppers stay in them longer.
Online grocery shopping is growing, but millions of Americans on food stamps who live in lower-income neighborhoods are being left behind. While the need is rather obvious, the problem is complicated for multiple reasons:
1. Limited online options for SNAP users.
Many SNAP recipients, including older people and people with disabilities, don’t have the ability to participate and shop online because they live in areas outside of retailers’ delivery zones. Moreover, SNAP participants who are eligible to buy groceries online using their benefits face other challenges, such as internet access, lack of experience using a computer, or few places to drop off deliveries
2. Financial and technological hurdles for smaller grocery stores.
Small grocers face financial and technological hurdles getting approved by the Agriculture Department to transact SNAP benefits online. Grocers have to have websites set up where only SNAP-eligible foods are displayed — not household essentials like toilet paper, which are not covered by the program — and a payment processing system that securely accepts SNAP (this is the opportunity area that I believe Instacart wants to fill via their pilot with Aldi).
3. Online grocery is safer, but not necessarily more affordable.
Lastly, even if a SNAP recipient lived in an area with delivery coverage from grocers (see list) and was able to accept drop-off delivery to their residence, there would still be another hurdle. SNAP recipients still need to pay a delivery fee (which isn’t covered by the SNAP program), and the slight surcharge on products purchased online vs. in store is another barrier. Thus, dollars simply do not go as far. There is a cost to convenience.
Overcoming these hurdles requires increased collaboration between the companies building the solutions and the communities who desperately need them. The Farragut Food Club has become a shining example of this. The organization makes it easier for residents of the public housing community in Brooklyn to buy groceries online. Here, residents take advantage of waived membership and delivery fees, shopping online at both Amazon with their SNAP benefits and at the local supermarket Western Beef using credit or debit cards through an Instacart partnership.
Operationally, the Club receives groceries at a centralized and secure location where residents can pick up orders. Additionally, the organization hosts office hours at two onsite computer labs where residents without a mobile phone or internet access can be supported in placing their online orders. The Club also offers a solution for seniors and residents unable to leave their home, where a team member visits residences with a tablet for order-taking.
Instacart has also scaled efforts to help subsidize costs for EBT SNAP beneficiaries. The company is waiving delivery and/or pickup fees on up to the first three EBT SNAP orders through mid-March for each customer with a valid EBT card associated with their Instacart account.
Farragut Food Club does not have the most scalable solution, and Instacart’s subsidies are not permanent or sustainable. However, these efforts are providing traction and early proof points that an opportunity does exist.
About Author
Anthony is an entrepreneur, investor, and operator. With a current focus on consumer companies that leverage technology to increase access to education, food, and health, Anthony has worked with both early and growth stage companies. He loves partnering at the earliest stage with startup teams to build products customers love, and to help them scale to build aspirational companies. Most recently, Anthony was a co-founder of Forage, a startup focused on helping families on food stamps affordably buy groceries online.
Forage’s work was recognized as a Rising Startup to Watch by Forbes. Prior to Forage, Anthony held investor roles at Rethink Education and Kapor Capital. During his time at these funds, he led investments in companies like Wonderschool and Blavity. When not supporting technology companies, Anthony enjoys cooking and watching basketball. He is currently working on a cookbook with his best friend from childhood that combines their shared passion for basketball and Caribbean cuisine (dish names include: LeFlan James and Steph Curry Goat). Anthony holds a degree in Management Science and Engineering from The College of New Jersey and an MBA with a concentration in Entrepreneurial Management from the Wharton School.
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