An Oasis for America’s Food Deserts is right in front of us

An Oasis for America’s Food Deserts is right in front of us

49% of Americans have low access to groceries.  Grocery delivery can shrink that to 3%.

With conversation the last few months centering around the explosion of online grocery and the efforts of the food industry to respond, brands and retailers have been reshaping their digital efforts to reach consumers.  A major channel shift that had been in progress for years, suddenly traded months of evolution for days.  

The first chapters of online grocery primarily attracted the convenience-centric, higher income consumer.  The pandemic chapter has introduced a critical mass of new users, who otherwise may have been later stage adopters.  Those consumers have now encountered the convenience of curbside along with expanded delivery, powered by armies of new personal shoppers.  

At Basketful, we were struck by a new and broader opportunity after reading through a research letter by Dr. Eric Brandt and team regarding the availability of grocery delivery and how that can impact food deserts.  After further collaboration and research, it is clear that we are at the forefront of a completely new chapter: the ability of online grocery to connect tens of millions of low access Americans to healthy and affordable food.  

 49% of Americans have low access to groceries

5 out of 10 Americans have low access to Groceries

Easy access to fresh and healthy food in the US is surprisingly difficult. Using the criteria of greater than ½ mile from a grocer in an urban environment, and greater than 20 miles in a rural environment, 49% of Americans have low access to groceries1.  That translates to over 150 million Americans spending a good amount of resources—time & transit–to access food staples, every single week.  It’s a staggering problem that has been somewhat normalized by most US households having access to a vehicle.  Regardless, a lot of energy and time is lost as a result of the low access.  The average household spends nearly 2 months of their life just in transit to and from the grocery store2

Full distribution home grocery delivery now reaches 86% of the US Population via 50+ US retailers that Basketful tracks, a staggering increase from a year ago3.  That delivery coverage, as of April, has the ability to shrink the 49% of Americans with low access to 3%. 142 out of 150 million Americans now have a convenient method to have groceries delivered to their doorstep.  The sleepy capability that we know as online grocery has potential far beyond saving us a few minutes of time in-store.

23% of Americans have low access to groceries and are low income

Food Deserts: Low Access & Low Income

The USDA defines a food desert as low access to grocery from both an economic and geographic standpoint. The population with low access to grocery also over indexes as low income, exacerbating the access issue.   23% of the US—70 million Americans— both reside in a low access area and are low income.  Comparatively, grocery delivery lags behind in these areas, but is still capable of reaching 80% of that group today.  Online grocery, if utilized more broadly, would be a significant helping hand.

SNAP: A lifeline for 1:9 Americans

The Supplemental Nutritional Assistance Program, formerly known as Food Stamps, is a program administered by the USDA  to address food insecurity.  1 in 9 Americans receive SNAP benefits, and the approximately $50B annual spend is estimated to account for more than 10% of all food spend that occurs in the home.

Of the 40 Million people who receive benefits, 65% have low access to grocery stores.  In that case, they have to rely on limited vehicle access, public transportation, or walking long distances to use SNAP benefits at participating retailers.  Current grocery delivery could reach 79% of that population, helping over 20 million people, but the use of benefits online is currently restricted at a national level.

State level pilots to allow use of SNAP for online grocery purchases are increasing.  Only food purchases are eligible; delivery fees and other associated charges may not be paid for with SNAP benefits.  As of May 2020, 14 states and the District of Columbia have now started pilot programs to extend the use of SNAP online with Walmart Grocery and Amazon Fresh.  Eight more states have signed on, but are not yet currently operational.  Representative Ilhan Omar of Minnesota introduced a bill in April that proposes to expand the ability to buy groceries online in all 50 states so recipients can minimize their exposure to the coronavirus in public.

A Win-Win-Win

An Opportunity to help

Regardless of the geography or demographic, the ability and inevitability of grocery delivery to reach tens of millions of consumers is an opportunity for brands, retailers, and consumers alike.  Imagine a targeted “Buy $10 of Brand X products, get free home delivery” campaign; it helps the brand, the retailer, and most importantly it has utility for a consumer in need. It is a proverbial win-win-win where retailers can connect with harder to reach consumers, brands can provide help to those who need it most, and consumers have a capability that brings them nutrition, convenience, and utility.  Connecting healthy food to tens of millions of families in an affordable and accessible way is not only a market opportunity, but has societal impacts.  Better access to nutritional food improves public health, which lowers health care cost, which improves the collective financial wellness of the economy.  

An Oasis in the Desert

The 21st century innovation of Online Grocery which had quietly evolved over the past decade, and has garnered attention as a lifeline during a pandemic, has much broader potential ahead.  Grocery delivery has the potential for significant impact– to the urban family who has to use public transportation to bring home their meals, to the suburban family who can’t use their SNAP benefits to order their groceries online, and to the rural family who has to travel long distances for weekly staples.  This once sleepy capability has the potential to better tens of millions of lives, and it is up to us as solution providers, brands, retailers, and publishers to use it to lend a helping hand.  Alone it is not a panacea, but it is a significant piece of the puzzle.

1USDA Economic Research Service, Food Access Research Atlas, January 2017 & 2010 US Census

2 Basketful May 2020 Time study using 2013 Wharton / University of Pennsylvania ‘The Fixed Cost of Shopping on the Internet’ 

3 One or more full distribution, non-club grocery store locations with online delivery available to a given US zip code via 50+ US Grocery Retailers, April 2020, Basketful Co 

4USDA 2013; Wilde, 2013b 

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