On Tuesday, Amazon announced the launch of AmazonFresh -- its new grocery service -- in San Francisco. The service joins a wealth of start-up food delivery companies that are hoping to capitalize on the tech-hungry and food-crazed Bay Area.
Internet-based food delivery isn't new. In 1996, Peapod became one of the earliest web start-ups with online food delivery from grocery stores. It continues to be the largest online food delivery out there. Webvan, a Silicon Valley-based online grocery business, was founded in the late 1990s, but went bankrupt in 2001 when spending on infrastructure far exceeded profit. Today, that continues to be a problem in the business. But, both those companies look nearly antiquated now with what new companies are proposing. Drones dropping off your take-out?
AmazonFresh is essentially capitalizing on the delivery services that Amazon already operates. In addition to delivering groceries to your home -- which can often be a money-losing business -- Amazon will deliver high-priced electronics and other goods at the same time and with the same trucks. The fear of many grocery stores is that AmazonFresh will be a loss-leader for other Amazon products and will drive local grocery stores out of business. AmazonFresh already launched in Los Angeles and Seattle and has hinted that it'll be in 20 more cities next year, according to Reuters.
There's a free 30-day trial for select zip codes in San Francisco right now; otherwise, it costs $299/year. That includes same-day free delivery for orders over $35. You can get groceries, food right from local restaurants and sync recipes to your delivery list.
Of course, Amazon isn't the only company trying to figure out the food delivery business. Walmart To Go has also been testing same-day grocery delivery throughout the Bay Area for the last two years and is now expanding beyond California. Google announced in September its Shopping Express service, which delivers within a few hours for $5 from a number of stores, is available throughout the Bay Area. Instacart is another local same-day food delivery start-up that has popped up. And LolaBee's Harvest, an online farmers market recently was acquired by Good Eggs, which delivers from farms and foodmakers.