Increased Demand for Online Groceries Necessitates Colder Last Mile
As demand for delivered groceries keeps rising, and e-commerce continues to be the purchasing mode of choice, retailers need innovative, cost-effective practices to maintain their supply chain from beginning to end. A colder last mile is just what the shipper ordered.
Pandemic-induced chills
Is it Monday or Thursday? Is this breakfast or dinner? The pain of managing work, school and home, when all three have combined around your dining table, is real. And the ability to get actual food on that table is proving to be more challenging than ever. One of many COVID-related changes, families are eating more meals at home, and it’s beginning to seem like mealtime all day, every day. This waxing demand for good family meals is colliding with waning time and energy on the part of crazy-busy parents. All this is driving more consumers to rely on grocery and meal-kit delivery.
U.S. online grocery spending has tripled, rising to 10–15% of total grocery sales in early May, according to Bain & Co. Lest you think things will change back any time soon, in June, consulting company NEXT found that 59% of online grocery shoppers plan to continue at the same level, and 28% of online grocery shoppers plan to shop online for groceries more than they did during the stay-at-home period.
With consumers increasingly ordering their food — including frozen and perishable items — online, there’s a conundrum: How do you keep food cold and fresh from cooler to curb?
The growing market at the end of the chain
“Despite being the most important leg of the supply chain, [the last mile is] the most inefficient. Just the last mile of the entire supply-chain adds up to about 30% of the cost,” Jungle Works reports.
According to NACS, a global trade association for convenience and fuel retailers, on CSPDailyNews.com, last-mile delivery was a $31.2 billion market in 2018, and it is projected to grow to $50 billion in 2022. Keep in mind: Those numbers do not include the products, only the deliveries, themselves.
“We’re going to see this market continue to evolve and grow, as more and more retailers bring solutions to their shoppers through last mile,” says NACS’ vice president of research, Lori Buss Stillman, who predicts that 17 million households will be new users of last-mile fulfillment once the pandemic subsides.
There is no shortage of providers selling refrigerated staging areas or fleets of refrigerated trucks to try to address this opportunity. But for many grocery and meal-kit e-tailers, those just aren’t cost-efficient ways to maintain cold-chain integrity for last-mile deliveries.
Cool efficiency for the last mile
It’s a problem Melissa Keiling has solved before. Long story short, Keiling just wanted her kids’ lunches to stay cool and fresh through lunchtime, so she invented a completely freezable lunch tote called PackIt.
“It dawned on me that we’ve been solving the final-mile cold chain for 10 years — just from the kitchen refrigerator to the school or office lunch table,” Keiling says. PackIt recently hatched a commercial sibling: PackIt Fresh freezable totes, which maintain cold storage on their own for 15 hours.
Developing affordable, efficient best practices for final-mile deliveries is the key to gaining and keeping e-customers. And with enhanced safety practices on everybody’s mind, it’s even more essential to ensure perishables are properly shipped. If you’re not transporting them correctly, you also run the risk that perishable food items will develop bacteria. There’s no room for that, especially at a time like this.
These uncertain times don’t seem to be abating any time soon, and everyone is searching for certainty wherever they can find it. Both consumers and retailers need to be certain their fresh and frozen food arrives at its destination with cool confidence.