E-Grocery Is Changing the Last Mile Structure of the Global Food System
Due in part to the lifestyle changes brought about by the COVID-19 pandemic, the way many people have gotten their groceries has changed dramatically in recent years. For example, Instacart, a U.S. based grocery delivery company reported a 500% increase in order volume year-to-year in April 2020.
Services like Instacart fall under a greater umbrella of e-grocery service, a form of e-commerce. In this writing, e-grocery will be defined as any kind of food shopping where item selection and payment takes place online and the food is delivered to the shopper. This includes meal kit delivery, delivery from grocery stores that serve in-person shoppers, grocery delivery from fulfillment centers that only serve online shoppers, and food delivery services that transport food from restaurants to customers.
While there are unique logistical challenges to each of these forms of e-grocery, they are all part of the “last mile” of delivery processes–the final connection between business and customer in the supply chain. Notorious for being the most expensive and inefficient step of any e-commerce delivery, the last mile must respond to growing demand and overcome time pressures, logistical complications, and traffic inefficiencies related to congestion, vehicle size, and parking.
The logistics of e-grocery gets even more complicated due to the perishable nature of the goods and the size, weight, and fragility of orders. These factors, combined with the diverse types of services that e-grocery encompasses, means that previous logistics research into last mile delivery is not cleanly applicable to e-grocery.
The cost of these logistical constraints and inefficiencies extends beyond just the lost revenue from failed deliveries. The complexity of last mile food delivery also has implications on emissions, and food sustainability more generally. The food supply chain accounts for 26% of the world’s anthropogenic greenhouse gas emissions. This is primarily due to the transportation emissions associated with moving goods through the food system. E-grocery is most commonly used in cities, which already deal with transportation externalities related to e-commerce such as congestion, pollution, and noise. In comparison to the string of transportation leading up to the last mile, the final step may seem insignificant. However, the use of e-grocery services in cities will only serve to amplify these local environmental impacts related to transportation.
E-grocery may also lead to increased food waste. This can be the case if customers are not present when their food is delivered or if orders are not delivered in time. Research suggests that people may buy more food when they do their grocery shopping online, which could result in more food spoiling before being used. Uninformed employees or poor platform design may lead to the acquisition of unwanted food by the customer, increasing the risk of food waste.
This isn’t to say that e-grocery is the bane of last mile food delivery systems. It’s possible that with eco-conscious implementation, e-grocery could be more efficient in terms of transportation, energy use, and food waste than traditional brick-and-mortar grocery stores. Ultimately, e-grocery is a relatively new addition to the last mile of the global food system that is rapidly growing, developing, and changing. As such, little is certain about the impacts, both good and bad, that it is having on the environment.
As we enter post-pandemic times, experts suspect that the use of e-grocery delivery will remain elevated above its pre-pandemic levels and continue to grow. While much is unclear about the current and future state of e-grocery, we do know that e-grocery is here to stay, presenting a restructuring of the last mile with the potential to impact the sustainability of our global food system. Researchers and policymakers alike must pay greater attention to this growing industry and the challenges and opportunities it may pose to the long-term sustainability of the global food system.
