• 🚚 Distribution: Sommerly Hits WFM
• 🔥 Kroger Fires At FTC
• 💰 De Novo Secures Capital
• 🌱 ADM Launches New JV
• 💥 From $1M To $500M In Five Years, Olipop’s Explosive Growth Is No Accident

Is the eGrocery landscape getting too competitive? According to the recent Brick Meets Click numbers from Mercatus Grocery Shopper Survey, the sector is following a slightly more nuanced storyline.

As of the end of July, monthly eGrocery sales jumped 9.2% year-over-year to $7.9 billion –  fueled primarily by promotional efforts on leading platforms.

Walmart saw gains in May with a 50% discount on its Walmart+ membership and re-upped the deal into mid-July. Instacart went a step further and offered an 80% discount on its annual membership while Amazon extended its 30-day free Prime membership to 90 days in July. All these promos contributed to delivery user growth and increased order frequency, the report claims.

As we’ve reported in the past, brick-and-mortar supermarket chains are increasingly partnering with grocery delivery platforms in a bid to increase their respective value to users. 

But as supermarkets rely more on grocery delivery companies to drive sales volumes, they do lose control over customer interactions and lower their ability to develop economies of scale by driving down operating costs, said Mercatus chief growth officer Mark Fairhurst in the report.

“I’m not sure many grocers would jump at the opportunity to put a farmer’s market in their store parking lot, yet many are willing to do something similar when it comes to relying on marketplaces for their online business,” he said.

For some early eGrocery delivery adopters the increased competition has made growing market share difficult, especially after consumers flocked to the service providers during the pandemic, only to abandon many of the platforms when in-person shopping returned.

That trend has also been evidenced by recent transactions. GrubMarket acquired distressed grocery delivery company Good Eggs at the beginning of the month and has been quietly acquiring AI software companies and produce wholesalers in the last few years to build a digitally-driven network that can service both grocery delivery and brick-and-mortar retailers.

Meanwhile, Instacart has been steadily evolving itself into an end-to-end service provider, not just bringing delivery and shopping to consumers, but also leveraging its user base and data collection as an advertising platform and marketplace for CPG brands.

Diversification seems to be the name of the game to win the grocery delivery race in the long-run.

Go Deeper: GrubMarket Acquires Good Eggs

🍨 Ice cream novelty maker Sommerly has launched at Whole Foods Market stores in Austin and San Antonio. 

🥟 Frozen brand Jaju Pierogi has expanded to 2,500 stores nationwide, including nationally with Whole Foods Market and Sprouts Farmers Market.

🍯 NUFS’ line of gluten-free, dairy-free crackers – available in Hot Honey, Sea Salt and Everything Bagel flavors – is now on shelves at H-E-B. 

🔥 505 Southwestern’s premium salsa lineup – including Southwest Style, Guacamole Salsa, Tomatillo Salsa, and Fire Roasted Corn and Black Bean – has landed at King Soopers locations across Colorado.

🍪 Otto’s Naturals is growing the reach of its Cassava Flour and grain-free brownie and cookie  mixes to over 2,000 Kroger stores nationwide. 

Kroger chairman and CEO Rodney McMullen is ready for a fight. Yesterday afternoon, the grocery chain filed a motion to enjoin the FTC’s administrative proceeding against its proposed merger with Albertsons. The motion argues that the federal agency’s case is unconstitutional and pointed to two precedents set within the past two decades to make its case:

• “First, the FTC violates Article II of the Constitution because the Administrative Law Judge presiding over the administrative proceeding is not removable by the President of the United States. This principle was recognized and applied by the Supreme Court in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010).” 
• “Second, the FTC violates Article III of the Constitution by seeking to adjudicate Kroger's private rights to contract with another private party administratively through the Executive Branch rather than in the independent Judicial Branch. This standard was reinforced this past term by the Supreme Court in SEC v. Jarkesy (2024).”

Kroger argues that the merger challenge should be resolved in federal court; the company is set to go to trial next week before an Oregon federal judge, but the FTC has asked that judge to block the deal while it completes its own in-house review. McMullen argues that review could take several years. 

"We stand prepared to defend this merger in the upcoming trial in federal court – the appropriate venue for this matter to be heard – and we are asking the Court to halt what amounts to an unlawful proceeding before the FTC's own in-house tribunal," McMullen said in a statement. 

Catch Up Quick: What’s Up With Kroger?

De Novo Foodlabs has raised new capital to accelerate the commercialization of its precision fermented lactoferrin product, NanoFerrin. The round was led by sustainable protein venture capital firm Joyful Ventures and brings the Raleigh, N.C.-based food tech startup’s total funding to $4 million. 

🥛 A functional protein primarily found in milk, lactoferrin plays a key role in infant development and offers various health benefits including improved immune function, brain health, iron absorption and gut health. 

📈 The global lactoferrin market was valued at $773 million in 2023 and is projected to grow annually by 15.8% over the next decade, but has been “hindered by high prices and inconsistent supply,” said Jean Louwrens, CEO and co-founder of De Novo Foodlabs, in a statement.

Go Deeper: Where Will Joyful Ventures Deploy New $23M Fund?

ADM and the Farmer’s Business Network have joined forces for a 50-50 joint venture that has created a new company via existing entity Gradable’s technology platform. The company will adopt and expand the use of Gradable’s technology, which tracks sustainable and regenerative agricultural practices and outcomes and helps farmers reap the benefits.

🏭 The tech platform was first launched in 2020 and has served as a partner of ADM; it will now expand its services to hundreds of the ingredient provider’s facilities across the U.S. and Canada. 

🧑‍🌾 Gradable currently has over 20,000 farmers within its network and facilitates over $30 million in financial incentives for those partners using sustainable practices each year. The platform also helps support the adoption of regenerative agricultural practices.

🗣️ What they said: “Gradable is rapidly becoming one of the industry’s leading and largest technology platforms enabling sustainability scoring at scale. We welcome all partners from the CPG and grain buying industries and look forward to serving new markets and more farmers.” - Steele Lorenz, CEO of Gradable

Ben Goodwin and David Lester, the co-founders of leading better-for-you soda brand Olipop, explain why marketing strategy doesn’t lean heavily into education about the products’ functional benefit, why the company’s mission and economic outcome “will forever be entwined,” and why they strive to be “experts in the leadership” of their business.

Listen to the episode now.