Online Grocery Market Trending Toward $26B

The purchasing preferences of millennials are impacting grocery shopping options.

Online Grocery Shopping

(PRNewswire)  According to a report from Hexa Research, the U.S. online grocery retail market size is expected to reach $26.87 billion by 2025. The growth of the market is attributed to increasing adoption of advanced technology, access to high speed Internet, and easy online availability of various products. A rising number of online grocery shoppers is expected to further drive market expansion. For instance, the number of American households buying online grocery products has increased by about 14 percent from 2014.

According to the research, the number of millennials in the consumer and working populations leads to a growing convenience preference when it comes to grocery shopping options. Moreover, most millennials are tech-savvy and like the hassle-free check out and payment services. Weekly discounts and offers are also luring millennials into spending online. 

The popularity of organic and natural foods are also playing a role, with e-tailers focusing on unique product lines. For example, Amazon offers Marconda's Meats and GMO-free New York steak in its grocery product portfolio. Locally-sourced produce, dairy, meat, poultry and fish products, organic vegetables, fruits and pickles are also a good fit for both online buyers and sellers. 

Well-established U.S. players cited by researchers include Peapod, Amazon and Walmart. Amazon is a leading player with its popular subsidiary AmazonFresh, followed by Peapod. Most retailers in this market are opting for mergers and acquisitions as a key growth strategy, i.e. Amazon acquiring Whole Foods.