Instacart Is Sharing Data With CPG Manufacturers to Prevent Supply Chain Issues

The sudden surge in sales, while great for a company’s income statement, has sent a shockwave through supply chains, leading to empty shelves in grocery aisles across the country.

Aiming to help provide a solution to the ongoing problem of gauging shifts in consumer demand amid the coronavirus pandemic, online grocery delivery platform Instacart has opened its vast vault of data to the nation’s producers of packaged food items.

For CPG partners that use Instacart’s ad products, such as paid search, the platform has begun sharing its real-time inventory figures. Since Instacart delivers from 25,000 grocery stores, such as Costco, Kroger and Aldi, and is located in more than 5,500 cities across North America, the company said it has a unique ability to capture which products are running low and how people are filling their shopping carts.

“Because we’re working with so many grocers, it gives us a line of sight to the purchase behavior of those consumers—a sample that’s much more representative than just one particular specialty retailer,” said Seth Dallaire, Instacart’s chief revenue officer, who joined the company last November.

While the company has been sharing tailored insights from its new consumer intelligence tool with a number of CPG partners, such as Kraft Heinz and General Mills, since mid-February, Instacart plans to extend the offering to others in the coming weeks and months.

Instacart has been working on its new offering since late last year and planned to release it eventually, but the coronavirus outbreak has pushed the company to start releasing the information “much more quickly than maybe we had anticipated,” Dallaire said.

With atypical shopping habits being the new norm, Dallaire said Instacart’s data sends an accurate signal to manufacturers from both an inventory perspective and a marketing perspective, allowing them to react and shift resources as needed.

“What’s becoming an old adage now about data being the new oil is precisely the game that that Instacart can play,” said Thomas Goldsby, chair of logistics at the University of Tennessee’s department of supply chain management.

In normal times, CPG brands typically find the right balance between supply and demand—meaning they’re able to keep store shelves stocked with their products—about 95% of the time, according to Goldsby.

“That’s even with the technologies that are available to us and the practices that have been put in place and refined over decades,” Goldsby said.

Kraft Heinz is currently working with Instacart to monitor which of its many products, from Oscar Mayer cold cuts to Kraft macaroni and cheese, is running low on store shelves.

“During this time of crisis, we all are facing significant challenges,” said Nina Barton, chief growth officer at Kraft Heinz, who noted that the present moment highlights the food industry’s “responsibility” to serve its customers.

The current moment presents a challenge for Instacart, too. On Monday, Instacart workers, known as Shoppers, planned to go on strike in protest over a lack of protection from the coronavirus. The Shoppers, in partnership with an activist group called the Gig Workers Collective, demanded protective supplies, such as hand sanitizer and disinfectant wipes, hazard pay of $5 per order, a default in-app tip of 10% and an increase in sick pay for those affected by COVID-19.

While the number of people who participated in the walkout remains unclear, Instacart said in a statement that it saw “absolutely no impact” to its operations on Monday. The company noted that in recent weeks, Instacart has “introduced more than 15 new product features, new health guidelines, new shopper bonuses, new sick leave policies and new safety supplies, as well as pay for those affected by COVID-19.”

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