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07/13/2018

Albertsons continues to redefine food retail

Albertsons formed an initial partnership with Instacart in November of last year, expanding the grocery delivery startup's service to more than 1,800 Albertsons stores by mid-2018. 

Albertsons Companies is leveraging several growth opportunities in food retail with the help of Instacart.

The nation’s second largest grocery chain has launched O Organics Market, an Instacart-powered virtual store where customers can easily find organic, natural and other “better-for-you” products. 

Albertsons is launching the e-store initially in San Francisco and Washington, D.C., with the expectation of expanding to additional cities in the future. O Organics Market caters to a segment of online shoppers seeking organic and natural products, and deepens Albertsons’ commitment to expanding its digital footprint. The market also leverages the growth opportunity in private label, as most of the products in the new e-store are own brands.

“With nearly 3,800 items from O Organics, Open Nature, and other organic and natural brands, O Organics Market is another important step in our strategy to deliver customers what they want, when they want it,” said Shane Sampson, Albertsons Companies Chief Marketing and Merchandising Officer. “With such a broad selection of organic and natural products, customers will be able to order from exclusive items like Open Nature Sockeye Salmon and O Organics Mission Figs, to more commonplace products, like Dave’s Killer Bread and Annie’s Organic Fruit Snacks.”
 
As Amazon's surprising acquisition of Whole Foods threatens to disrupt an entire industry, U.S. grocers are increasingly looking for ways to boost their e-commerce offerings. 
 
With O Organics Market, Albertsons may be looking to better compete with the slew of new organic online startups such as Movebutter, Thrive Market, Good Eggs and others. Many retailers are looking to Instacart for help in this segment. As a result, Instacart has partnered with the top five U.S. grocers: Kroger, Albertsons, Ahold, Publix, and H-E-B. Instacart has also expanded its partnership with Costco, and earlier this month announced a deal with Canada's largest grocer, Loblaw, creating its first international deal. Instacart is now worth $4.2 billion.

Albertsons formed an initial partnership with Instacart in November of last year, expanding the grocery delivery startup's service to more than 1,800 Albertsons stores by mid-2018. 
 
Albertsons’ rough start to the 2018 year has resulted in the company making strides toward redefining their business model. In March, the grocer launched an innovative marketplace for vendors who wished to grow their business by direct-shipping to Albertsons customers. The company has also been trying to acquire Rite Aid pharmacy, a Fortune 500 company, despite strong stockholder opposition. Rite Aid said the merger “is expected to close in the early part of the second half of calendar 2018.” However, Rite Aid has not scheduled a vote of the shareholders yet.
 
O Organics and Open Nature are part of Albertsons’ range of private brands sold exclusively in the company’s stores, including Safeway, Albertsons, Vons, Jewel-Osco, Acme, Shaw’s, and United Supermarkets, to name a few. O Organics provides USDA-certified organic food, with what the company describes as the industry’s broadest organic assortment. The company also says that Open Nature provides high-quality, minimally processed products for the well-being of customers’ family, pets, friends, and the environment.
 
"We are excited to expand our partnership with Albertsons Cos. by powering the O Organics Market," said Nilam Ganenthiran, Chief Business Officer, Instacart. "Their forward-thinking approach to meeting customer demand is exactly where the grocery industry is headed."
 
Shoppers in San Francisco and Washington, D.C., can get started at the O Organics Market by visiting instacart.com/o-organics and simply entering their home Zip code.