A street fight among grocers to deliver your milk, eggs, bananas
Every couple of days, Sinclair Browne fights through traffic in Times Square, squeezes his delivery truck into a parking spot, walks up four flights of stairs and delivers groceries to a guy whose order he knows by heart.
“I’m fast,” said Browne, slicing his hands in the air, ninja style. “In and out, in and out.”
Delivering food requires military precision: Bananas can’t get cold. Produce can’t get warm. Eggs, of course, must not get broken. And people expect their food to arrive at specific times.
Browne, 40, is a driver for the online grocery business Peapod. He plays the most important role in solving the biggest problem vexing the online grocery industry: moving food, undamaged and unspoiled, from the warehouse to the customer’s house. It’s known as the last-mile problem.
Delivering perishables is much trickier than delivering T-shirts, books or pretty much anything else people can buy online. The biggest challenge is that groceries must stay cold for hours at a time. But there are myriad other complications, too. Bananas and apples give off fumes that can hurt loose leaf lettuce, so they can’t be stored too close. Tomatoes lose flavour when they cool to below 55 degrees. Milk always has to be packaged upright.
All the complexity adds costs in an industry where profit margins are already thin. Few businesses have attempted these kinds of gastronomic acrobatics on a large scale, and numerous start-ups have failed trying, making groceries the last frontier of online shopping.
Even Amazon, which built a multi-billion-dollar business by perfecting its delivery logistics, hasn’t quite mastered the art of profitably delivering perishable food in big metropolitan areas. But it just made a big bet, purchasing Whole Foods in a $13.4 billion deal that will give it access to more than 400 stores concentrated around major population centres — places that may have walkup apartments, aggressive taxi drivers and other urban obstacles that Browne navigates five days a week.
Amazon’s deal sets up a face-off with Walmart, the nation’s largest grocery store. Walmart itself is struggling to become as dominant in the virtual world as it is in the physical one.
Jennifer Carr-Smith, Peapod’s chief executive, says she hopes Amazon’s purchase of Whole Foods will ultimately encourage more people to shop for groceries online, where about 10 per cent of all shopping in the United States happens now. The numbers for food are less than half that, according to data from FMI-Nielsen.
As the competition heats up, Amazon and others will be relying on drivers like Browne, who makes $13 an hour, plus tips, to handle the biggest challenges of succeeding in the online grocery business.
“What’s up, boss?” Brown greets the doorman at his first building, who tells him he’ll need to take his cart to the service entrance. He takes the elevator down one flight, but it’s the wrong entrance. He tries another floor. No go. When he asks for directions, the man working at the service entrance yells at him: “You don’t know, you should tell me you don’t know!”
But rudeness, Browne says, is just one of the things he has to deal with. He’s still got to get in and out, in and out. Nineteen stops to go.
Every second counts. Grocery delivery companies like Peapod have to calculate exactly how long each individual order will take, and monitor traffic patterns and car accidents for any disruptions. Browne gets alerts on his phone; on Sunday, he’ll have to avoid crossing Fifth Avenue, because of the Pride parade.