Shipt Launches Program to Boost Small Retailers in Detroit, Access to Healthy Food

Crain’s Detroit Business
Jay Davis
Sept. 28, 2022

Same-day delivery service Shipt is taking aim at Detroit as it launches an accelerator to support small local retailers as part of a new set of initiatives to reduce food insecurity and increase access to nutritious food.

Shipt said it developed the initiatives in collaboration with the White House Conference on Hunger, Nutrition and Health, which is taking place today in Washington, D.C.

The conference, said to be the first of its kind in more than 50 years, comes at a time when millions of Americans are facing food insecurity and diet-related diseases, Shipt said in a news release. On Wednesday, President Joe Biden announced more than $8 billion in private- and public-sector commitments to help combat hunger and set a goal of ending hunger in the U.S. and increasing healthy eating and physical activity by 2030.

Hunger has been spreading among Americans with steady but low-paying jobs, and the situation threatens to worsen as the U.S. Federal Reserve raises interest rates and the economy slows.

“As a tech company that delivers groceries, partners with organizations across the country, and prioritizes food insecurity as a pillar of focus, Shipt is uniquely positioned to contribute to this conversation,” Shipt Chief Executive Officer Kamau Witherspoon said in the release.

Other companies taking part in initiatives are Walgreens Boots Alliance Inc., Tyson Foods Inc. and Alphabet Inc.’s Google.

Commitments cover a wide range of efforts from “philanthropic contributions and in-kind donations to community-based organizations,” as well as investments in new businesses, according to the White House. More than half of the total commitments will go toward philanthropic efforts focused on promoting nutrition and exercise, while $2.5 billion will be funneled to startups developing innovative solutions to fight food insecurity.

For small retailers, Shipt said it will provide capital, e-commerce-focused technical assistance and education from industry leaders that will help them succeed in an evolving marketplace. Shipt will prioritize minority-owned businesses — and at least half of these retailers will be in the food, beverage and grocery categories.

Initially, the program will be offered in Detroit, Atlanta, Birmingham, Ala., Houston, and Washington, D.C. Shipt aims to assist at least 10 retailers in the first year and 30 in its first three years, according to a spokesperson.

Shipt would not disclose the financial investment being made into the program.

Participating retailers will receive eight weeks of business education, a $5,000 stipend, and access to Shipt’s marketplace and delivery capabilities, according to the spokesperson. The accelerator program will include courses on:

• Efficient technology systems to save money and time
• E-Commerce 101
• Understanding customer needs and how to drive customer acquisition and revenue
• Marketing
• Financial foundational support
• Shipt supports around integration and platform

“Online shopping and delivery can play an important part in expanding access to food in underserved communities, particularly for those with mobility or transportation barriers,” Shipt said in a news release.

Lance Atisha, co-owner of Lafayette Foods, a small grocery in the Lafayette Park neighborhood east of downtown Detroit, recently contracted with Shipt.

Atisha on Wednesday told Crain’s that Shipt reached out to Lafayette Foods about participating in the program. For using the third-party service, Shipt will take about 10 percent of the cost of each order placed at Lafayette through the app.

“We knew about Shipt,” Atisha said. “I always thought it was more for corporate stores like Meijer. It’s a good way for us to get on an e-commerce platform. We’re trying to keep up with the times. Everyone is offering these types of services. It’s nice of Shipt to offer businesses like ours this opportunity.”

Shipt also plans to update its consumer experience to encourage healthy decisions and make meal planning easier for customers with specific dietary needs. This includes allowing customers to filter items by dietary preferences and working with retail partners to expand access for SNAP benefits to be used on delivery orders.

In addition, Shipt and the University of Michigan will launch a project to study the benefits of expanding access to healthy food for people with type 2 diabetes.

Through a collaboration of Healthy Behavior Optimization for Michigan, Michigan Collaborative on Type 2 Diabetes, and Michigan Social Health Interventions to Eliminate Disparities, UM is launching the Healthy Eating Jumpstart Program with Shipt to deliver free, healthy, and low carb food to 150 patients with type 2 diabetes who identify as food insecure or low income. The pilot program provides six grocery deliveries of $40 each over three months, and 12 weeks of low carb education and support.

“Patients diagnosed with type 2 diabetes are motivated to change their diet, but overcoming deeply ingrained eating habits is incredibly challenging. Grocery delivery is a game-changing tool because it can change what foods are readily available in patients’ homes, making it easier for them to eat healthily,” Tammy Chang, associate professor in UM’s department of family medicine and director of HBOM, said in the release.

Shipt also has piloted programs with health care and insurance providers to offer membership and credits toward healthy groceries and essential goods.