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Delivery service Instacart and Amazon-owned Whole Foods announced yesterday that they are partnering in Canada.

According to the announcement, "Customers throughout Canada can now order fresh groceries and everyday essentials from Whole Foods Market on the Instacart App for delivery in as fast as 30 minutes. Delivery is available from all 14 Whole Foods Market stores in Vancouver, Victoria, Toronto, and Ottawa for customers in these greater metro areas, beginning with 11 stores today and 3 additional stores in the coming weeks. Instacart+ members can also get free delivery on all orders over $35."

Chris Rogers, Chief Business Officer at Instacart, said in a prepared statement that “both companies are incredibly passionate about providing an exceptional experience to customers, and we’re excited to help Whole Foods Market make its fresh produce, pantry staples, and so much more available to millions of Canadians through Instacart.” 

And Rick Bonin, SVP of Operations at Whole Foods Market, said, “We strive to create the best shopping experience for our customers both in stores and online, including finding ways to provide convenience without sacrificing quality.  We’re excited to work with Instacart in Canada to provide our shoppers with a quick and easy way to get their favorite high-quality foods and products delivered directly to their doorstep.”

KC's View:

What goes around comes around.

Let's remember that when Instacart originally launched in the US, Whole Foods - before it was acquired by Amazon - was an investor in the company, and used Instacart for online fulfillment.   That all pretty much came to an end when Amazon bought Whole Foods in 2016, and if I recall correctly, the relationship was forever and finally severed in 2019.

Except apparently not forever.  And not finally.

I posed the question yesterday to Instacart:  Why would an Amazon-owned company want to work with an organization that essentially has built its business on helping retailers compete against Amazon, and that has said that when Amazon bought Whole Foods it prompted a lot of smaller retailers to partner up with Instacart as a fast and effective alternative.

Here's the answer I got from an Instacart spokesperson:

They get to tap into:

- our shopper community of tens of thousands of experienced Canadian shoppers to help with picking, packing, and delivering orders, and...

- our tech -- including our user-friendly Shopper app which helps Instacart Shoppers fulfill orders and offer high quickly customer service, AI-powered recommendations and replacements, dynamic order routing, easy checkout, etc

And, working with Instacart means they can fulfill a variety of order types – from weekly shops to small convenience baskets, including products like custom-made orders.

I want to pose the same question to Amazon and/or Whole Foods, but haven't been able to make the connection yet.

I'll buy everything that Instacart says.  This totally makes sense for Instacart.  But I'm having trouble understanding whyAmazon/Whole Foods would want to contribute to the bottom line and operational viability of a company that clearly is the enemy.

Now, I get it.  This is just Canada.  Maybe it doesn't make economic or logistical sense for Amazon/Whole Foods to build out the same delivery infrastructure there as in the US.  Maybe in markets like that, consolidation like this is the best option.

But I'm still gobsmacked.

I find myself wondering how other retailers doing business with Instacart might react to this, as they consider their own strategic imperatives as we enter an era of E-Grocery 3.0.  (See yesterday's Innovation Conversation with Tom Furphy.)