The State of Online Grocery

2021 Trend Report by Imperfect Foods

A Note from Our Co-founder

When we set out to research this report, we wanted to investigate the extent of what “building a better food system for everyone” truly means. We’ve been working to make our food system more equitable and efficient since we launched in 2015, so we’re familiar with the topic. We expected to find plenty of evidence about food waste and how our systems contribute to it. (No spoilers: We waste up to 40 percent of all food produced, and one-quarter of greenhouse gas emissions from food production come from food that is ultimately wasted).

But what we didn’t expect to find was how much inefficiency was happening throughout the supply chain— how food is transported, shopped for, and consumed—with the most inefficiency happening at the consumer level. Our food systems are built around anticipating consumer desires and demand — restaurants, retailers, and even consumers’ own kitchens are leading sources of food waste.

COVID-19 made us all reevaluate how we feed ourselves and our families. It shined a light on the inequities in our food system, which leaves 50 million Americans food insecure every day. But it also presented an opportunity: to finally change our food system for good.

At Imperfect Foods, our goal is to help build a kinder, less wasteful food system for everyone. That’s why we come at the problem of “fixing food” from every direction: by working with farmers who grow food more sustainably, by reducing food waste and saving food from lesser outcomes, by reducing our carbon footprint throughout our supply chain, and by ultimately giving consumers a more sustainable way to shop. To further this we’re committed to becoming a net-zero carbon emissions company by 2030.

Ben Chesler
Co-founder, Imperfect Foods

About Us

Imperfect Foods is the leading online grocer at the forefront of building a kinder, less wasteful food system. Founded in 2015, the company’s mission of eliminating food waste and building a better food system for everyone is largely powered by working directly with farmers and producers to rescue, redistribute, and develop goods across multiple grocery categories, including produce, shelf-stable items, dairy, meat, seafood, and other private label offerings. If a waste-saving option isn’t available for a particular item, the company sources the most sustainable choice available to ensure customers' grocery needs are met. Imperfect Foods customers receive weekly scheduled deliveries right on their doorsteps and have the option to edit the box, delivery frequency, and even shop for more items. Customers enjoy a service that is more affordable — and more environmentally friendly— than the average trip to the grocery store. To learn more, visit

Why We’re Here

Online grocery shopping has reached its biggest inflection point ever.

The COVID-19 pandemic and resulting shifts in consumer behavior of the past year helped usher in the largest spike in adoption of online grocery to date. And while COVID-19 didn’t invent online grocery (that happened in 1996 with the short-lived Webvan platform!), it has certainly fueled its growth.

This comes at a time when our food system is positioned on a precipice: We waste almost as much food as we grow in the U.S., with a quarter of our emissions stemming from food that ends up in landfills. Meanwhile, food insecurity remains a significant problem, with 50 million people (and 17 million children) going hungry in the U.S.

This report explores the state of the American food system, how we buy our food, and whether online grocery is better (or worse) for the environment. And with a spotlight on eating at home due to COVID-19, we’re asking the big questions: Can online grocery’s drastic growth of the past year outlast the pandemic and encroach on territory (read: market share) long held by traditional grocery stores? And if so, how sustainable can grocery delivery really be?

Simply put:
What is the best way to eat?


The Whole Carrot has long been our mantra at Imperfect Foods. It’s built into everything we do (even our logo!) It’s more than our recipe resource — it’s a reminder to always consider the true impact of the ways in which we eat.

And that doesn’t just mean reducing food waste through eating what we have (although, that’s important, too). It means thinking holistically about our food system: from soil health and biodiversity to food rescue, reducing CO2e emissions, and even improving access to fresh food.

Every meal choice we make has an impact, and Imperfect Foods is here to ensure everyone has access to a better, more sustainable way to eat.

Online Grocery is Here to Stay

The COVID-19 Inflection Point

In February 2020, McKinsey predicted that online grocery sales would jump from a 3 percent share of the $1 trillion American grocery market2 in 2019 to 10 percent in 20253. A month later, a global pandemic effectively shut the world down and forced the majority of Americans to stay home for more than a year.

Ecommerce had grown more in the first two months of the pandemic than in the entire decade before, jumping from 16 percent to 27 percent of all retail in the U.S., according to Boston Consulting Group.4

Nearly 80 percent of Americans surveyed by data firm Inmar Insights reported that they’ve shopped online for groceries since the pandemic began — an almost 40 percent increase from before the pandemic.5 Nielsen and FMI predict that 70 percent of Americans will be grocery shopping online by 2024, and online grocery sales could reach $100 billion as soon as next year.6

A Family Affair

Ann Belles and her husband Jim Silcock have adopted 63 boys with disabilities — 34 of whom still live with the couple in Huntington Beach, CA. Each week, the family orders food from Imperfect Foods, taking into account the boys’ likes and dislikes and often involving them in food prep.

Since joining Imperfect Foods, the family has rescued 13,671 pounds of food, saved 546,840 gallons of water, and avoided emissions of 46,618 pounds of CO2e through their weekly grocery boxes.

We try to do everything we can. All of our cars are electric. We have solar panels. We do our own composting. We have 63 fruit trees. But we don’t produce enough for the family. So we order from Imperfect Foods. We do recycling with the kids, and we try to show them that we’re doing things to help with the environment.

- Ann Belles, Mother to 63 adopted boys with disabilities in Huntington Beach, CA

In fact, a new survey of 1,000 American shoppers by the International Food Information Council shows that more than a third of the shoppers are both shopping online for groceries more often and buying more shelf-stable goods than before the pandemic. Of those who adopted online grocery shopping, a majority said they’d continue shopping online after the pandemic was over, with 38 percent shopping online more after the pandemic and 32 percent continuing at the same rate.7

Imperfect Foods’ active customer base has grown 40 percent since March 2020. By Q4 of 2020, Imperfect’s total customers had increased by nearly 60 percent over the same period in 2019. The number of average weekly orders more than doubled, and net sales tripled between end of 2019 and end of 2020. Average order value shot up nearly 70 percent year over year as Imperfect launched a full slate of grocery offerings in 2020 in response to more shoppers eating at home.

Gen Z and Millennial consumers, in particular, have increased their overall spending during the pandemic — especially on online grocery and food delivery. And those who still live with their parents influence purchase decisions like grocery shopping — more than 80 percent of parents of Gen Z teens told Boston Consulting Group that their teens influence household spending.8 According to a November 2020 Imperfect Foods member survey, grocery shopping is a family affair each week, with each purchaser accounting for multiple preferences in their household.

Online Grocery Shopping Is More Convenient

Even before the COVID-19 pandemic, consumers were clamoring for more convenient grocery shopping routines. According to a late 2019 survey by data and insights firm IRI, convenience and value were the top factors driving where consumers chose to shop for essentials like groceries. And market penetration for e-commerce platforms in essentials shopping climbed 6 points over the three years prior, while traditional brick-and-mortar grocery stores lost ground.9

Then the pandemic hit, and the boundaries between home and work dissolved, with days punctuated largely by video calls and online school. Many households shifted how they shopped and ate, prioritizing  products that could be safely delivered and enjoyed at home.

The convenience of home delivery (and pre-selected boxes based on customers’ preferences) mixed with the feel-good factor of contributing to a better food system meant a sharp increase in Imperfect Foods’ active customer base. Combating food waste may have been the No. 1 driver for joining Imperfect Foods in 2020, but convenience was the No. 1 factor in customer retention since the pandemic began.10

Online Grocery Shopping Is (Usually) Better for the Environment

Online grocery shopping is more convenient than traditional brick-and-mortar trips. But is it better for the environment?

A 2020 study by the investment firm Generation Investment Management suggests that it is. Generation found that online shopping emits 17 percent less CO2e than shopping at traditional brick-and-mortar stores in America11 — where a single grocery store trip means an average of 7.5 miles traveled and 2.7 kilograms of CO2e equivalent emitted.12

And while grocery delivery platforms like Instacart check the convenience box, orders placed on the platform usually mean a driver fulfills a single household’s order at a time, simply shifting the emissions to another vehicle. Meanwhile, the online grocery services that batch deliveries at the last mile generally have a leg up on curbing emissions (think: Amazon and Walmart).

Imperfect Foods Avoids Emissions to Mitigate Climate Change

Imperfect Foods leans on a carbon-efficient last-mile delivery system that batches customers and neighborhoods in close proximity together to reduce miles traveled (especially pertinent as it launched 29 new markets in the U.S. in 2020). Imperfect Foods’ last-mile delivery emitted 12,800 fewer tons of Co2e in 2020 than if those same shoppers had driven to the store to buy their own groceries. That’s the equivalent of taking 2,800 cars off the road for a year.13 And with the company's announcement of being a net-zero carbon company by 2030, it is predicted this model will avoid an additional 470,000 tons of Co2e.

But it’s not all about better forms of transportation. The global food system (including raising livestock, land use, and crops production) drives about 25 percent of all greenhouse gas emissions worldwide. Most of the emissions in the grocery industry come from the food production itself, making the decision around what consumers choose to buy just as important as where they choose to shop. A study by University of Michigan researchers found that eliminating all single-use plastic from a 100-person cookout was about one-three-hundredths as effective in reducing carbon dioxide (CO2) emissions than simply switching from beef to black bean burgers.15

Unlike competitors like Amazon and Instacart that sell only originally-sourced goods, Imperfect Foods sells high-quality products that were rescued from lesser outcomes, allowing it to avoid carbon emissions. In fact, the avoided emissions stemming from how Imperfect Foods sources its groceries outpaces those of the efficient last-mile delivery method at 20,662 tons of CO2e — enough to power 3,500 homes’s electricity for a year.

Worried About Excess Packaging?

Think Again.

Imperfect Foods also uses 100 percent recycled packaging to deliver its boxes. In 2020, Imperfect purchased 7,921 tons of recycled packaging, saving:

KWH of Power
Cubic Yards of Landfill Waste
Gallons of Water
Tons of C02e

That’s enough to:

While many grocery chains are retroactively trying to implement emissions-saving practices, Imperfect Foods has built them in from the beginning, strategically entering corners of the grocery market where it can improve the status quo. Imperfect started as a marketplace for rescued produce only. In early 2020, Imperfect launched grocery, including meat and fish not because it has less emissions —it has more—but because there was a better way to produce and sell it. In 2021, the brand has launched health and beauty; and later in 2021, they will roll out frozen items. By launching strategically and only when the proper protocols are in place, Imperfect has oversight in every step of its supply chain to monitor and control emissions.

At Imperfect Foods, we are committing to being a net-zero carbon operation by 2030—10 years earlier than major retailers and 20 years before the Paris Climate Agreement Deadline.

Net-Zero Carbon
by 2030
Net-Zero Carbon
by 2030
Net-Zero Carbon
by 2030

The Rise of Private Label

COVID-19 shook up the American diet. The early months of the pandemic provided a shock to brand loyalty — 40 percent of American consumers tried new brands or products in 2020, looking for value and convenience.16 And while that was partially due to shortages from panic  buying, up to 80 percent of those consumers intend to continue their new shopping behaviors after the Covid-19 crisis.

With a greater emphasis placed on eating at home as well as saving money in the past year, private label brands have emerged as a new frontier of opportunity for grocery companies. It’s an opportunity to win additional customer loyalty by providing a new favorite product, usually at a lower price than name brands.

By the fall of 2020, 20 percent of grocery shoppers surveyed by McKinsey said they were buying more private-label products than before the pandemic, with the main driver being price.17 At Imperfect Foods, 20 percent of the top-selling items in 2020 were private-label products like “sunburnt” dried mangoes and chocolate-covered almond pieces. And Imperfect Foods plans to build on that brand equity: In early 2021, it launched its own health and beauty line, and the rest of the year will see the launch of more private-label products, including an expansion into pet products, made with 35-40 percent upcycled ingredients.

The Food Waste Crisis

According to a 2021 report by the UN, more than 1 billion tons of food were wasted worldwide in 2019, and this total sum of food waste accounts for 8 percent of global greenhouse gas emissions.18 And while more than a decade ago, the UN’s Food and Agriculture Organization estimated that global food waste was about 1.3 billion tons, the organization had a lack of consumer-level data. The new report reveals that 17 percent of those gargantuan food losses happen at the consumer level around the world — in both developed and developing countries. That includes retail, restaurants, and at home: Home food loss was by far the highest single source of consumer waste, with more than a quarter of the food losses (26 percent) happening in individual households.19

In the U.S., the waste is more drastic. Americans waste up to 40 percent of our food supply, with more than 30 percent of that food loss occurring at the retail and consumer levels of the supply chain.20 The Environmental Protection Agency (EPA) estimates that each person in the U.S. throws away nearly 220 pounds of food a year. Food destined for landfills in the U.S. makes up 25 percent of the food system’s yearly greenhouse gas (GHG) emissions. And while the EPA and U.S. Department of Agriculture (USDA) have joined forces to cut the amount of food waste in America in half by 2030 from its 2015 levels (about 133B pounds or $161B yearly),22 we have bigger problems.

The worldwide population is expected to grow from 7.6 billion today to 9.8 billion in 2050, increasing food demand by more than 50 percent, according to the World Resources Institute (WRI). To meet that demand, we’d have to find arable land double the size of India to grow enough food.23 Meanwhile, millions of people worldwide are facing hunger and food insecurity.

So what can we do?

Reduce Food Waste

First, we can stop wasting the food we already have. In 2020, Imperfect Foods rescued 52,263,090 pounds of food from lesser outcomes like landfills.

Favorite Rescued Foods in 2020

Since April 2020, these are the top produce items Imperfect Foods has rescued from lesser outcomes like animal feed, landfills, or tilled under in the field:

A Food System that Mitigates Climate Change

In addition to reducing food waste, the WRI calls for tactics like increasing food production on existing agricultural land, increasing fish supply through better fisheries management, and restoring natural habitats like forests through regenerative practices.24 But perhaps most pressing is drastically reducing GHG emissions from agricultural production.

In 2020, Imperfect Foods avoided 33,463 tons of carbon dioxide equivalent (Co2e)25 — 20,663 tons of which came from otherwise wasted food.26

And Imperfect’s new Los Angeles warehouse (its largest facility) now gets 100 percent of its electricity from solar power, reducing the same amount of emissions as taking 470 cars off the road for a year. Imperfect also composts at each of its facilities, diverting over 75 percent of its waste from landfill through a mix of composting and conservation partners who help turn non-human-grade leftovers into animal food for rescued animals or regenerated soil for new crops.


A Platform for Next-Generation Agriculture

The American food system is heavily reliant on land, farmers, and manufacturers. The USDA estimates that 46 percent of 2.3 billion acres of land in the U.S. is arable (either used for cropland or animal grazing).27 Yet we waste up to 40 percent of the food grown in the U.S. — and 31 percent of our food loss (which is nearly half of our overall production) happens at the retail and consumer levels and is responsible for 133B pounds and $161B worth of food.

That means that land, water, labor, energy, and many other resources also go to waste, when used to produce food that’s ultimately thrown away. So to effectively shift our food system to be less wasteful and more sustainable, we need a holistic approach that starts with the soil and ends with how consumers use food.

Partner Snapshot


Matthew Wadiak founder and CEO of Cooks Venture — an agriculture company that works to create a new American food system starting from the soil up — estimates that American topsoil has about 60 fruitful harvests left at our current rate of use.

In the U.S., the vast majority of our crops are used for ethanol and raising cattle and chicken. Even mainstream “organic” chicken is often contaminated with conventional feed and engages in processes that don't regenerate the soil or care for the land.

At its farms in Arkansas and Oklahoma, Cooks Venture works to plant crops that are revenue drivers for farmers, promote biodiversity and healthy soil, replenish pollinators, and plant trees. From there, they raise heritage chicken breeds that live healthy lives and eat diverse, all-natural diets.

In 2020, Cooks Venture produced 19,000 tons of non-GMO food without pesticides.

Imperfect Foods buys up to 35,000 chickens per week from Cooks Venture. The partnership opens up a new distribution channel to shoppers that allows Cooks Venture to provide its healthy chicken to customers at a much lower price than retail, and it allows Cooks Venture to make regenerative agriculture commitments for years in the future.

“People are vastly aware of the American industrial agriculture system but don’t have good choices. They feel disheartened by conflicting labels and messaging. The decisions that we’re making today are creating our anthropology that we’re going to look back on in the future. How we decide to feed ourselves and nourish our family with nutritious ingredients and how we decide to create access to that kind of food is our responsibility,” says Wadiak.

Partner Snapshot


Luker Chocolate is a 115-year-old family-owned cocoa company based in Colombia with a B2B arm that provides chocolate products to brands all over the world. Luker’s Chocolate Dream program puts an emphasis on country of origin, working to enhance farmers’ income, strengthening the wellbeing of rural farming communities, and promoting environmental balance with reduced farming impact in Colombia.

“Imperfect Foods is a young company that is open to working with new partners. That’s really appealing to us. That’s our ideal customer: someone who is purpose-driven and strategic. Working with Imperfect has given us a lot of insight on the dynamics of the ecommerce business in the U.S. and has helped us fine tune our logistics and operations to be a more effective supplier,” says Melissa Eusse, Luker Chocolate’s USA Sales Manager.

In 2019, Luker began selling surplus inventory like milk and dark chocolate via Imperfect Foods. By 2020, business had grown so quickly, they had to start producing fresh items just for Imperfect, eventually launching a baking bar and chocolate chips, too. In less than two years, they’ve provided 195,000 pounds of chocolate to Imperfect Foods, which has resulted in a year of fair income for about 50 small farmers in Colombia.

Changing Minds and Bellies

American retailers are estimated to throw away $15.4 billion in edible produce each year — in many cases because of consumer rejection due to appearance or desirability.28

A recent study published in The Journal of Marketing29 found in a survey of 52 grocery stores that produce labeled “ugly” on retailers’ shelves had a 20 percent higher chance of being sold than the same produce without the label. The “ugly” descriptor both forces the shopper to question their preconceived notions of what “beauty” in produce means, as well as immediately identifies the imperfection of the produce as aesthetic versus qualitative. This contextualization, the researchers conclude, helps the consumer see the value in the produce and helps to reduce waste.

And since the U.S. food economy is designed to anticipate consumers’ needs and wants and takes whatever measures necessary to meet that demand, it’s easy to conclude that real, systemic change in the ways in which we eat will start at home.

Twenty percent of the shoppers surveyed in the International Food Information Council survey reported paying attention to the environmental impact of their choices more now than before the pandemic, but consumers still need to be pointed in the direction of where their environmental efforts can be most effective.30

Key Takeaways

The COVID-19 pandemic may have been the accelerant that drove record adoption of online grocery shopping in 2020. But the trend is here to stay.

A shortened supply chain that excludes a brick-and-mortar retail touchpoint means that online retailers can continue to provide greater value and convenience to the consumer than traditional stores. And retailers like Imperfect Foods that rescue groceries from lesser outcomes curb the food waste associated with maintaining “pretty” groceries on shelves, as well as cut emissions associated with things like comfortable temperature regulation in the store while properly chilling and freezing cold items.

More than a billion tons of food is wasted worldwide each year, and 17 percent of that total happens at the consumer level. Home food losses are by far the greatest single source of consumer waste, at 26 percent.

So what can we do? Make customers part of the solution. Twenty percent of shoppers in a International Food Information Council survey reported monitoring the environmental impact of their choices more now than before the pandemic. Retailers who can measure and report impact at the individual level will help turn the tide of waste and emissions at the consumer level and put the power of change in the hands of shoppers themselves.

Testimonial Image

Imperfect Foods has rescued an enormous amount of product that would have been otherwise discarded or left in the field. Typically, a significant portion of our parsnips are sold to the cruise line industry. However, in light of Covid-19, those sales have entirely dried up. Every pound of parsnip that you purchased since March would have likely been otherwise tilled under.

Jordan Bremer

Victory Farm Sales - Hudsonville, MI

[Imperfect Foods has] absolutely helped our growers. With the foodservice business almost completely dissipating, the home delivery definitely made up for the lack of restaurant business.

Marcos Perez

Beachside Produce - Santa Maria, CA

Quality of food and quality of life are directly tied to agricultural systems. Primarily, we are a heritage breeding company that raises chickens — preserving and breeding heritage lines that result in better chickens. Our heritage breed is healthier, better for the environment, and tastes like your grandparents’ chicken.

Matthew Wadiak

Founder & CEO, Cooks Venture
(Cofounder of Blue Apron)

Who Will Win in Online Grocery?

COVID-19 opened up a new swath of consumers to the possibility of shopping online for groceries — and many of them will continue to shop online after the pandemic is over. But to gain a true edge over other competitors in the traditional and omnichannel spaces, online grocers will have to pull away in value, brand loyalty, and sustainability.

The Grocery Brands That Will Win Will:

Invest in private label.

This allows brands to build customer loyalty through delightful experiences on their own products (often at a better value than name brands).

Own more of their supply chains, from production to delivery.

Those brands that have control over every stage of the product cycle will be able to pull levers that curb emissions.

Put the power in consumers’ hands.

Most of the food waste in our food systems occurs at the consumer level, either in retail, restaurants or most likely — in consumers’ homes. Those brands that own their own supply chain and customer channels (unlike traditional grocery stores and omnichannel platforms like Instacart) will have the power to reach customers directly, informing them about food waste, emissions, and inspiring them with content to help them make better choices.

Imperfect Foods comes at the problems in our food system from both ends: rescuing foods from lesser outcomes, providing retail channels for producers who are growing food the right way — as well as curbing emissions in its logistics. Imperfect Foods is committed to being operationally net-zero carbon 2030. It holds the keys to every stage of its supply chain, allowing it to make adjustments to emissions and find cost-saving efficiencies that are passed onto the consumer.

But the brand is also engaging consumers in the food waste and sustainability conversations. Every touchpoint of the Imperfect Foods brand comes with a nod to the impact of the consumer — from packaging that denotes a food’s imperfections to recipes for using up the food in consumers’ fridges to the scorecard each shopper receives on their environmental impact.

A kinder, less wasteful food system starts at home, and Imperfect Foods empowers consumers to make better choices that have a direct impact on the health of our planet.