Dive Brief:

• Aldi and Instacart will allow online Electronic Benefits Transfer (EBT) payments for Supplemental Nutrition Assistance Program (SNAP) participants, offering same-day delivery and pickup for eligible grocery orders at more than 600 stores in five states, Instacart announced Thursday. 
• The program will roll out in phases, starting in a few weeks with 60 Aldi stores in Georgia before expanding to more than 570 stores in Illinois, California, Florida and Pennsylvania in the coming months. When using Instacart, shoppers will be able to pick out SNAP-eligible products from Aldi and then select how much of their benefits they want to allocate to the order once the items are in the cart, Instacart said.
• The integration marks the first time SNAP participants will be able to use their EBT cards on Instacart as retailers look to combat food insecurity and make it easier for millions of shoppers enrolled through the federal program to purchase groceries. 

Dive Insight:

With food insecurity rising and millions more consumers now shopping online, linking their e-commerce programs with SNAP has become a top priority for many grocers. For Aldi, the tie-up is another way the fast-growing discount grocer is putting a charge in demand.

Aldi U.S. Co-President Brent Laubaugh said in the announcement that the online program supplements Aldi's in-store SNAP payment practice, available at stores nationwide. 

“While the option is only available in select markets at the moment, we’re eager to roll out this update broadly as quickly as possible,” Laubaugh said.

SNAP participants using Instacart to order Aldi groceries can add their EBT card information as a form of payment that they select when checking out. SNAP customers will need to add a secondary form of payment to cover non-food items like taxes, tips and fees, Instacart said. 

Instacart President Nilam Ganenthiran said in the announcement that the decision to launch the program in Georgia stems from the company’s customer and shopper care team being based in Atlanta coupled with the state grappling with food insecurity. Feeding America projected that Georgia’s overall food insecurity rate for 2020 will be 17.8% — up from 12.5% in 2018. 

Partners since 2018, Aldi uses Instacart to power delivery orders across its more than 2,000 stores. Earlier this year, Instacart began offering pickup services from 600 Aldi stores.

The U.S. Department of Agriculture’s SNAP online payment pilot, which launched in April 2019, has rapidly expanded to 47 states, including Washington, D.C. But only a few grocers are currently able to process SNAP payments online — mainly Amazon and Walmart, which cover all 47 territories. 

Instead, most grocers have started accepting EBT payments at pickup, where workers can use existing store payment technology to process orders. At grocers like Hy-Vee and Kroger, shoppers have to bring their EBT card and a credit card, which covers non-SNAP/EBT eligible items, when picking up their orders. 

The online payment option offered by Instacart and Aldi allows the grocer to offer delivery and pickup without requiring shoppers to produce their EBT cards. Last month, the National Grocers Association called SNAP online purchasing a “top priority” for independent grocers, but noted that they often face financial and technological constraints and a lengthy approval process to offer the payment option. 

Aldi and Instacart both support Feeding America, a nonprofit that combats food insecurity. This summer, Instacart started a giving campaign to support Feeding America, and as part of the campaign donated 1 million meals to the nonprofit. Every year, Aldi donates approximately 30 million pounds of food to local Feeding America food banks, and the grocer has made an additional $500,000 donation to Feeding America, according to Thursday's press release.