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December 13, 2017

Maine Food Insider: National grocery delivery service Instacart joins local market

Courtesy / Instacart Instacart, a national online grocery shopping and delivery service, launches today in Portland. The San Francisco-based company joins locally owned in providing online grocery deliveries in the Greater Portland and southern Maine area.

The area’s online grocery delivery industry got a new player Wednesday as national company Instacart began Portland-area service.

Instacart joins, a Scarborough service that began in 2010, delivering groceries ordered online to homes. owner Ami DeRienzo said, as far as she knows, her company and Instacart are the only southern Maine online grocery stores that deliver.

Instacart customers can also pick their groceries up after ordering online, a service also offered by some Hannaford stores, Whole Foods and others.

DeRienzo said Tuesday that she welcomes the competition from Instacart.

“While some might see that a big business like Instacart coming to town could threaten the survival of a small business like, I actually see it as an opportunity,” she said by email. “One of the greatest challenges I have faced with this business is that I have had no competition. When someone opens a new pizza place, they put out a sign and people say, ‘Hey look, a new pizza place!’ They recognize the industry, and it doesn't take a full marketing campaign to educate them on what a pizza is, how it works, and how to go about getting one.”

She said that launching an online grocery store with delivery service has been challenging because many don't know the service exists, so they don’t look for it.

“My hope is that with Instacart coming to Maine, it will raise awareness that grocery delivery does exist and can be a great option for busy families and a tremendous help to those who are house-bound for various reasons,” she said.

'Incredible demand'

Instacart customers order groceries online from stores that partner with the company. The groceries are delivered by “shoppers” who work as company contractors. The company said it hopes to hire as many as 100 shoppers in the Portland area.

The company initially will partner with Shaw’s, CVS and Petco, according to a news release. The company’s website also will list area stores that partner with the service.

Instacart will be available in Portland, South Portland, Falmouth, Cape Elizabeth, Cumberland, Scarborough, Gorham, Westbrook, Buxton, Windham, Old Orchard Beach, Saco, Yarmouth and North Yarmouth.

“Over the past year we’ve seen incredible demand in the Portland area,” Dave Osborne, senior regional director of the company, said in the release.

The company is, in some ways, similar to a ride-sharing service. Customers shop online and choose a delivery window from one hour to up to seven days. The Instacart shopper uses the app to determine what to buy and where and when to deliver the groceries.

Customers pay a one-time fee of $5.99 or a monthly or yearly subscription. Grocery orders must be at least $35.

Instacart began in San Francisco in 2012. Forbes magazine estimated this week it has 500,000 customers and approximately $2 billion in revenue. The article reported the average shopper uses the service twice a month and spends $95 an order. 

Personal touch also has a virtual store, with more than 5,000 items. Shoppers, similar to Instacart, create a shopping list and check out, picking a delivery date. The company delivers to Scarborough, Saco, Old Orchard Beach, Cape Elizabeth, South Portland, Biddeford, Kennebunk, Kennebunkport, Gorham, Westbrook, and limited areas within Portland.

Its business model differs from Instacart in that it delivers to specific communities on certain days of the week, and doesn’t shop from selected stores, but shops around for items. Rates and order minimums depend on where the order is being delivered.

DeRienzo said her customer base of about 700 fluctuates, depending on the time of year and the weather. “Summer is when we do the bulk of our business, providing grocery delivery to beach rentals primarily in Scarborough, Saco and Old Orchard Beach,” she said.

The company allows customers to put money into an account that can be used for an elderly relative, for instance. It also had links to donate to local charities. She also offers free service to customers undergoing cancer treatment.

DeRienzo, who worked for Shaw’s for 20 years before she started her company, said being a small local business has its advantages.

“I get to know my customers on a personal basis,” she said. “There is a lot that goes into shopping for someone that people may not think about, like how someone may want their deli meat sliced or whether or not they might prefer a ripe avocado over one that is less ripe. There are also those times when something is out of stock and if you can't get in touch with the person, you may have to guess what they may like as a substitute.”

She said she’s had some customers for seven years. “You get to know people over time, and sometimes can even save them from forgetting the milk when you notice it isn't on their list, but that they've ordered it faithfully every week for years.”

DeRienzo, the business’s only full-time employee, said providing service to the homebound, elderly and disabled has always been part of her mission.

“There is an extreme deficit with regard to resources available for our elderly population, especially when it comes to grocery delivery,” she said. “In many ways having Instacart in Maine will be nice in that when I get a call from a 90-year-old living alone who just broke her hip and lives outside my delivery area, I will now have someone I can refer her to and know that she will be taken care of.”

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