, ,

The grocery delivery company Instacart was losing $25 million per month, until the beginning of the pandemic. Then in April 2020, Instacart brought home a $10 million profit—its first profitable month. The company made $1.8 million in revenue in 2021. Today it’s said to have 9.6 million active users.

But while many consumers have appreciated the convenience and safety of online grocery shopping during the last few years, the nearly 42 million U.S. consumers receiving federal Supplemental Nutrition Assistance Program benefits—SNAP benefits, once more commonly known as food stamps—have not, by and large, been able to participate. Instacart and other online grocers require the use of credit cards, as well as a digital purchase channel. They have not been set up to accept payments via the Electronic Benefits Transfer (EBT) card that SNAP recipients use to buy food. Although there are about 250,000 grocery stores across the country that accept EBT payments, far fewer allow customers to make purchases online using their SNAP benefits.

Forage, a payments technology company that specializes in helping grocers accept EBT payments, is working to change that—and it just got $22 million to help it along toward that end. Specifically, Forage announced that it had raised $22 million in a funding round that included Instacart’s founder and PayPal Ventures. The money will go toward product development and hiring, and “will help accelerate Forage’s mission to democratize access to government benefits,” according to the company’s co-founder and CEO. In addition, Forage recently launched an app to offer EBT processing for merchants that use the e-commerce platform Shopify.

Today, SNAP benefits provide a literal lifeline for millions of families without sufficient resources. About one-quarter of U.S. households that receive SNAP benefits include a person with disabilities—and this market is who Forage has especially in mind, according to another Forage co-founder: “Many of them are homebound. They lack transportation, or live in food deserts, without any easy access to grocery stores. The ability to do grocery shopping online, with their SNAP, is a complete game changer for them.”

Discussion Questions:

  1. Consider the market of consumers with disabilities. What challenges hinder their access to food from a grocery store?
  2. Is it the responsibility of online grocers to ensure access to their offerings for SNAP recipients or other people who many not have access to credit or digital channels?
  3. What other products or apps might be developed to ensure that low-income families have sufficient, easy access to food?

Source: Heather Lalley, “Online SNAP Payment Processor Forage Raises $22M,” Winsight Grocery Business, August 8, 2022; Keerthi Vedantam, “Fintech Platform Forage Raises $22m from Instacart Founder and PayPal,” Crunchbase, August 8, 2022; “Forage Raises $22m to Help Merchants’ Efforts to Accept SNAP Benefits,” pymnts.com, August 8, 2022; Abby McCain, “Instacart Statistics [2022]: Users, Revenue, Growth, and Grocery Ecommerce Market Trends,” Zippia.com, May 23, 2022; Chase DiBenedetto, “The Tech Company Trying to Make Online Grocery Shopping Accessible for Everyone,” Mashable, April 27, 2022; Bonnielin K. Swenor, Rachel M. Cahill, and Laura J. Samuel, “Food Insecurity in the Disability Community: Disparities in Snap Access,” healthaffairs.org, May 17, 2021