Anton Xavier is the co-founder and executive vice president of strategy for Label Insight, an organization helping consumers understand what's in the products they use and consume.
The grocery industry has been somewhat resistant to the digital disruption that has fundamentally changed so many other industries over the last 20 years. Going back to 2001 when Webvan famously filed for bankruptcy —while operating in 26 cities and after raising almost $400 million in venture capital investment — the grocery industry has repeatedly proven to be a bastion for traditional brick-and-mortar retail.
Despite being by far the largest market by sales at over $600 billion in 2015, the food and beverage industry still remains relatively unaffected by e-commerce, which in 2015 was stagnant at less than 1% in the U.S. There are several inherent reasons for this, from logistical challenges of shipping products with short shelf lives, to preserving freshness, to a reluctance of consumers to buy fresh foods without being able to touch, smell and curate.
The killer application?
There are many reasons for the industry to sit up and pay attention to the Amazon-Whole Foods merger and much has been written about this already. Some have a perspective on how Whole Foods will be a dedicated customer that Amazon can leverage to build out a new operating system for grocery, which it will then sell to the rest of the industry. Others describe the acquisition from the context of the battle taking place between Amazon and Walmart.
While those perspectives are both important and fascinating to consider, it is also important to examine the consumer perspective. Is it possible we could finally see the game-changing killer application that the industry has be bracing for ever since those early days with Webvan?