Among the most dramatic changes that Covid-19 has had on the economy is turning online grocery shopping into a mainstream activity.
Prior to the pandemic, a wimpy 3% to 4% of grocery spending happened online, according to data from Bain & Co. Now? That number is upwards of 15%. According to a just-released survey from Chicory, there are 18% more online grocery shoppers today than there were before the pandemic began. What’s more, those shoppers appear to be learning habits they will keep. A survey from Good Eggs released Sept. 30 found that 81% of Americans who’ve been buying groceries online intend to keep doing so permanently.
Obviously, this shift has been a boon for the giants of the sector like Walmart, Amazon and Instacart. Just last week, Amazon introduced free, one-hour curbside pickup for customers who order groceries online at Whole Foods (which Amazon purchased in 2017), making it clear that the platform has every intention of grabbing even more market share than it presently has, which is already about 40%.
You might assume, then, that the flush times for online grocers translate to all the brands on those platforms. And you would be wrong.
As The Washington Post reported last month, the algorithms used by the big platforms—guided in large part by past ordering behavior—tend to keep shoppers locked into established purchasing patterns. As often as not, that means channeling more business to the big packaged-foods companies with correspondingly huge marketing budgets.
It also means consumers are far less likely to encounter any number of smaller names, in particular that subset of brands devoted to sustainability and making a social impact—this despite consumers’ demonstrable interest in supporting them.
See a disconnect? So did entrepreneur Katie Tyson. “More and more brands are born with a mission and ethos at the core, and more consumers are seeking out a way to shop that supports these brands and missions,” she told Adweek. “The problem is, retail was not built to support values-driven shopping, for the brand or the consumer.
“Brands are forced to navigate the high cost of participating in traditional retail/ecommerce,” she continued, while “consumers don’t know how to differentiate what [brands are] actually doing good from what is just good marketing.”
Last week, Tyson and her business partners took the wraps off what she hopes is a partial solution, an online marketplace called Hive. It works much like any other online grocery site, except that you won’t find megabrands from PepsiCo and Kraft Heinz here. The packaged foods (and other household items) that Hive lists are all geared toward sustainability and achieving a stated social impact.
In addition to selecting potential brands for quality, Hive screens them for attributes including a low carbon footprint, sustainably sourced ingredients and environmentally friendly packaging.
For example, hit the Chocolate tab on Hive and you won’t find Hershey bars, Dove or Twix. You’ll find Alter Eco and Tony’s Chocolonely, a B Corp dedicated to fair trade and ending child labor on cocoa farms in Ghana and the Ivory Coast. In a statement, digital marketing coordinator Abigail Noel Davison said the brand is grateful “to have a partner that shares our mission-driven ethos.”
With its strict criteria, Hive is willingly sacrificing the huge selections that draw so many shoppers to places like Amazon.
“The number of products and brands available on Hive is limited in comparison to other marketplaces,” said Tyson, who is Hive’s CCO and held high-level marketing positions at Freshpet and Casper prior to starting this latest venture.