American online food delivery service, GrubMarket, has announced they’ll be acquiring Eating with the Seasons Inc and EJ Food and Distributor Inc, in an attempt to expand their distribution channels for their online e-commerce marketplace.
Eating with the Seasons is an on-demand delivery start-up fostered by the local farming community in the San Fransico bay area. Their website gives customers access to fresh and seasonal food online in what they call ‘customizable produce boxes.’
“GrubMarket has great respect for local CSA (community-supported agriculture) programs, and Eating with the Seasons is one of the most prominent CSA programs in the San Francisco Bay Area. As a rapidly growing e-commerce farm-to-table company, we are not aiming to outcompete the smaller CSA programs like some other e-commerce players have recently done. Instead, we would like to foster these local CSA programs and protect the integrity of the local food ecosystem that has been in existence for a very long time,” said Mike Xu, CEO of GrubMarket.
In addition to the consumer market, GrubMarket’s second acquisition is of another San Fransisco-based start-up known as EJ Food Distributor. The company specializes in delivering a rich variety of dry goods exclusively to restaurants. Johnson Quan, the CEO of EJ Food Distributor claims its merger with GrubMarket will allow the company to expand itself into the rapidly-evolving industry of online retail.
“We’ve been aware of GrubMarket’s rapidly growing wholesale presence for a couple of years, and we are incredibly excited to join the GrubMarket Team and become part of the incredible technological disruption currently taking place in the massive, yet fairly old-fashioned, food wholesale industry,” said Quan.
In addition, both companies will transition to the ‘GrubMarket software ecosystem.’ The system includes their Software-as-a-Service provider which gives their food vendors access to financial management, easy-to-use online ordering, sales functionality, inventory management and Customer Relationship Management tools.
Worldwide revenue for online food delivery is expanding exponentially; according to Stastista’s market forecast, the online food delivery segment accounted for $107 billion in 2019 and is expected to grow into a $164 billion industry by 2024 with a compound annual growth rate of 8.8 percent.
As third party e-commerce giants like Amazon dominate the retail segment, the food industry looks to shape itself in a similar direction both for restaurant delivery and whole foods.
In addition, serial entrepreneur and co-founder of Uber, Travis Kalanick, sold 90 percent of his stake in the 4.6 billion dollar company to start another business, known as ‘Ghost Kitchens,’ or Cloud Kitchens.’ The start-up has already received $400 million dollars in funds from Saudia Arabia and is a hot trend in the online food delivery space.
The concept provides chefs and restaurants with commercial space to prepare meals for an onslaught of delivery services from Door Dash, Foodora, and even Uber Eats, without having to pay for all the amenities needed in a brick and mortar restaurant.
In addition, Canada-based grocer Loblaws has made strides in the e-commerce sector with their online PC insiders Program that is structured similarly to Amazon Prime. The online program gives members points and certain discounts for products purchased online along with free delivery.
As we live our day-to-day lives increasingly online, it’s likely 2020 will be a year filled with more acquisitions and partnerships between e-commerce and food retailers, as they work to capitalize on a new decade of evolving shopping and spending patterns.