How Online Food Delivery is Reshaping CPG Brands

Online food delivery has grown exponentially over the past few years, transforming the way consumers shop for groceries and meals. Platforms like Uber Eats have evolved from simply offering restaurant takeout to becoming reliable grocery delivery services, partnering with major grocers like Albertsons, Sprouts, and Costco.

For packaged food and beverage brands (CPG), this shift presents both significant opportunities and new challenges. How can food brands adapt to this rapidly changing retail world?

We’ll explore how online food delivery platforms are reshaping the industry, the opportunities for growth, and the potential challenges businesses need to prepare for.

The Opportunities Created by Online Food Delivery for CPG Brands

Online grocery delivery platforms provide CPG brands with an unprecedented opportunity to expand their reach, engage new customer segments, and fast-track the delivery of their products. Here’s how CPG brands stand to benefit.

1. Access to New Customer Bases

One of the biggest advantages online delivery offers is access to customers who don’t typically shop in-store. Uber Eats allows grocers to extend their reach to suburban and urban consumers who value convenience and speed.

For CPG brands, this could mean widening distribution channels and getting products into the hands of hard-to-reach consumers. Uber's partnership with Instacart further enhances suburban demand, as consumers gravitate toward platforms that meet their time-sensitive needs.

2. Incremental Sales Growth  

Uber Eats has proven itself as a powerful tool for increasing incremental growth. Customers are now opting for delivery to fulfill smaller, "top-up" grocery orders between full-basket shopping trips. Items like fresh produce, alcohol, and pantry staples are seeing significant demand through these channels.

For CPG brands, this creates an opportunity to capture sales in unique "on-demand" moments when consumers need products quickly but wouldn’t ordinarily visit a store.

According to Uber's internal tracking with merchants, incremental growth from these sales is substantial, reaching high-double-digits.

3. Enhanced Brand Visibility and Advertising Opportunities

Platforms like Uber Eats go beyond just delivery; they’re also becoming powerful advertising tools. CPG brands can use Uber's app for direct in-app advertising, providing opportunities to convert consumer interest directly into sales.

These platforms allow brands to:

• Run targeted brand awareness campaigns.

• Promote seasonal or new product launches.

• Leverage loyalty programs to track customer behavior and drive repeat purchases.

Such marketing tools enable CPG brands to position their products in front of the right audience at the right time, improving ROI on marketing efforts.

4. Meeting Evolving Consumer Behavior  

Consumer behavior has drastically changed. Convenience, speed, and freshness now dominate purchasing decisions. Many people are time-poor but still value fresh, high-quality food.

By leveraging online delivery platforms, CPG brands can directly cater to this demand with swift, reliable access to their products. With Uber Eats enabling 30-minute grocery delivery, consumers can "top off" their pantries with fresh items whenever they need them.

The Challenges of Online Food Delivery for CPG Brands

While the opportunities for growth are clear, online food delivery also introduces a set of challenges for CPG brands. Here are key challenges to consider and how brands might address them.

1. Increasing Cost Pressures  

The cost of using delivery platforms can erode the already slim profit margins for many CPG brands. Delivery platforms charge commission fees to partner merchants, which can eat into a business's bottom line.

To overcome this, CPG brands can:

• Analyze margins carefully to ensure profitability when selling on platforms like Uber Eats.

• Explore options to pass additional costs to the consumer through premium packaging or exclusive products only available via delivery.

• Leverage subscription models or loyalty discounts to build long-term customer relationships.

2. Dependence on Third-Party Platforms  

Relying on third-party delivery platforms, while necessary for consumer reach, can make brands dependent on external systems and algorithms. This dependency may limit the control brands have over user experience, customer relationships, and even pricing.

Brands can overcome this by working on parallel channels, such as direct-to-consumer (DTC) websites, for full-basket purchase while still harnessing Uber Eats for on-demand needs. This dual-channel approach ensures both customer retention and flexibility.

3. Limited Brand Identity in Search Results  

On apps like Uber Eats, consumers shop predominantly by category (e.g., “chips” or “pasta”) rather than brand name. This makes it harder for lesser-known brands to win consumer attention.

CPG brands can mitigate this by:

• Investing in impactful in-app advertising.

• Optimizing product descriptions and imagery to stand out in search results.

• Offering exclusive or limited-edition products on delivery platforms to attract attention.

4. Ensuring Product Quality in Transit  

Last-mile delivery introduces issues with product storage, handling, and freshness during transit. While Uber Eats strives to enhance its last-mile services, CPG brands must also ensure their products are well-suited for delivery.

This can be achieved by:

• Using packaging that maintains product freshness through varying temperatures.

• Partnering directly with Uber Eats to implement clear handling protocols.

• Conducting regular quality assessments to uphold brand standards.

The Path Forward for CPG Brands

The growth of online food delivery is not a trend; it’s a fundamental shift in how consumers shop for groceries and meals. For CPG food and beverage brands, adapting to this transformation is critical for long-term success.

Here are the key steps your brand can take today to prepare for the future of online food delivery:

• Build strong partnerships with delivery platforms like Uber Eats.

• Develop targeted marketing strategies leveraging in-app advertising tools.

• Offer tailored discounts or exclusive delivery products to stand out.

• Continuously monitor and adapt to consumer preferences, ensuring you remain relevant.

By taking these steps, packaged food brands can thrive in the on-demand era of grocery and food delivery. This isn’t just about keeping up with the competition; it’s about positioning your brand at the forefront of innovation in a rapidly evolving industry.

Start Capitalizing on Online Food Delivery Today

Whether you’re exploring Uber Eats or other delivery platforms, there’s no better time to reimagine your business strategy. Delivering convenience, speed, and seamless consumer experiences is no longer optional but essential for growth.

Maximize your impact by adapting to this dynamic landscape with confidence. By combining innovation with consumer-first delivery practices, your brand can stay ahead in a world where online food delivery continues to dominate consumer habits.