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10/07/2021

Instacart to acquire catering software company for grocers

Dan Berthiaume
Senior Editor, Technology
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Instacart is acquiring order management system provider FoodStorm (Source: Instacart)

Instacart is taking another step toward becoming a full-fledged technology platform.

The on-demand delivery platform is acquiring FoodStorm, an order management system provider whose technology enables end-to-end order-ahead and catering services for grocery retailers.  Specifically, FoodStorm technology streamlines the manual process of customers calling in or placing in-store orders for prepared food by enabling multi-channel order (e-commerce, phone or in-store kiosk) management payment and fulfillment. The solution also integrates with a large variety of third-party systems, including POS solutions, and offers CRM capabilities that help grocers collect feedback, market their offerings, and leverage promotional features. 

According to Instacart, customers on its platform who purchase prepared foods and catering items like hot and cold side dishes, cakes and sushi from the grocery store have significantly larger baskets and shop more frequently than those customers who do not. For retailers, order-ahead items and prepared foods are also typically more profitable than traditional groceries like produce and package goods.  

Throughout 2021, Instacart has made a number of moves that strongly suggest it seeks to evolve into a broadly-based tech platform like Amazon, Apple., Google, and Facebook. In January, Instacart introduced a new model for its Instacart Pickup curbside service — Partner Pick. Through Partner Pick, a retailer’s employees utilize Instacart’s customizable pickup technology to fulfill Instacart Pickup orders. In July, the company tapped Fidji Simo, who had been serving as VP and head of the Facebook app, to assume the position of CEO.

July also saw Instacart unveil the first phase of a new micro-fulfillment initiative, designed to bring automated technology solutions to retailers across the U.S. and Canada.

Founded in 2007, Foodstorm collaborates with a number of Instacart’s existing retail partners, including Albertsons Cos. banners Balducci’s and Kings Food Markets, as well as Bi-Rite Market, Mollie Stone’s Markets, Uncle Giuseppe’s, and Roche Brothers Supermarkets. Looking ahead, Instacart will make FoodStorm’s technology available to more retailers through its enterprise technology offering. In addition to acquiring FoodStorm’s technology and tools, Instacart will also hire the entire FoodStorm employee team, which is based in the U.S. and Melbourne, Australia.

“As a retailer enablement platform, Instacart is focused on growing our partners’ businesses by investing in innovative new technologies and services that deliver significant value to them and their customers,” said Mark Schaaf, CTO, Instacart. “Our goal is to help our retail partners increase their sales and ensure more of their customers’ everyday meals come from the grocery store. That’s why we’re excited to welcome the talented FoodStorm team to Instacart and integrate their end-to-end order-ahead and catering platform into Instacart’s leading enterprise offering. For retailers, this new enterprise solution helps them bring even more of their inventory online, enhance their e-commerce capabilities, grow their business and meet the evolving needs of their customers. And, for customers, this unlocks a healthier, more affordable alternative to restaurant delivery - creating an easier way for people to order prepared foods online directly from their favorite grocers.” 

"I’m incredibly proud of what the FoodStorm team has achieved for our partners. We’ve developed market-leading software that makes it easier for grocers to execute on prepared food and catering orders more efficiently, and track everything from one central location. This is a huge growth opportunity for grocers, and we’ve seen increased demand for our products as more customers are searching for seamless online and in-store ordering capabilities,” said FoodStorm CEO Rob Hill. “Grocery is an incredibly complex retail category, making the need for enterprise-grade solutions like FoodStorm and Instacart critical to the long-term success of the industry we all rely on to put food on our tables. We’re excited about this next chapter as we join the Instacart team and create new ways for retailers to serve the ever-changing needs of their businesses and customers." 

Instacart partners with more than 175 local, regional and national grocers across North America.