Dive Brief:

• Instacart has launched an in-app hub for ready-made meals from grocery stores that's currently available from more than 4,100 stores across 35 states, the e-commerce company announced on Thursday. 
• Under the Ready Meals tab, consumers can find fresh soups, sushi, prepared sandwiches, salads, take-and-bake casseroles and other items and get free delivery in as little as 30 minutes for any orders of at least $10 that contain items from the hub. Publix, Kroger and Ahold Delhaize's U.S. banners are currently supplying meals and will be launching custom storefronts within the hub, according to Instacart.
• The feature leverages technology from Instacart's acquisition of catering software firm FoodStorm and continues its push to help retailers launch new services and promote in-store offerings online, Daniel Danker, Instacart’s head of product, said in an interview. 

Dive Insight:

With the Ready Meals Hub, Instacart is betting on customers wanting the convenience of bundling meals with grocery shopping as grocers look to promote their high-margin meals business online. 

Instacart has always offered meals from grocery stores, but the new Ready Meals tool helps make those offerings more visible to shoppers, said Danker, and incorporates its speedy Priority delivery service that launched last year.

Like Instacart's convenience delivery offering that rolled out last year, the Ready Meals offering adds another service that addresses cross-channel challengers — in this case, restaurants, which have seen takeout sales skyrocket during the pandemic. The Ready Meals offering appears as a main tab in Instacart's marketplace alongside others like convenience, alcohol and pickup.  

In the coming weeks, the company plans to add ShopRite to its lineup of retailers offering ready-made meals through its new hub.  

Instacart, which has been testing the feature for "a few months," has found that customers buying items from the hub are ordering twice as frequently and that shoppers who add two meals to their cart are, on average, adding 19 other grocery items to their cart at the same time, Danker said.

Instacart has also found from its tests that people are looking to feed more than one person when using the meals feature. Rotisserie chicken, salads, sushi from Kroger, soups and Publix sandwiches have been the most popular items so far based on initial tests, the company said.

In announcing the Ready Meals Hub, Instacart highlighted market analytics firm Research and Markets' projection that the chilled and deli food market in the U.S. will reach more than $108 billion by 2026 — roughly 2.6 times bigger than its estimated $40.4 billion value last year. The Food Industry Association (FMI) has said that grocers can be the “ultimate mealtime solution,” encouraging them to boost their deli department and prepared foods to gain an edge against restaurants and use e-commerce to make meals more accessible.

Grocers have been looking for ways to make it easier for shoppers to include meals when ordering groceries online. Last fall, Whole Foods Market added the ability to order prepared foods like hot pizzas, sandwiches, salads and entrees to its app for pickup and delivery purchases. Shoppers can customize their selections within the new app tool.

On Instacart, customers can customize some items, like made-to-order meals, Danker said.

As demand for quick, high-quality meals and digital ordering increases, Kroger and Walmart are exploring the ghost kitchens trend, while a number of grocers including The Giant Company, Lucky California and H-E-B are opening in-store restaurants and food halls. Danker said that's not an avenue Instacart wants to explore: "We are not interested in going down a path where we're building kitchens or building or selling food ourselves."

By tying free Priority delivery with a small order minimum for ready-made meals, Instacart's new offering is making quick delivery more widely available to shoppers as speedier service becomes mainstream in the U.S. Instacart's convenience delivery service, which offers delivery in as soon as 30 minutes, is available from grocers like Kroger, Publix and all of Ahold Delhaize's brick-and-mortar grocery banners in the U.S. Instacart noted its convenience business has more than doubled since June.