Iowans buying groceries online

CEDAR RAPIDS — It's early May, and a fairly steady stream of cars and minivans moves through a makeshift drive-up lane in the parking lot of St. George Orthodox Church in southeast Cedar Rapids.

Michael Smith, a delivery driver for Zaycon Fresh of Spokane, Wash., checks each customer's name and order off on his iPad and loads cases of ground beef patties or boneless chicken breasts into the vehicle from a refrigerated truck.

While the vast majority of grocery shopping still takes place in traditional brick-and-mortar stores, buying meat and other groceries online — such as from Zaycon Fresh — has become a $6.5 billion business in the United States, according to Statista.com.

In fact, more than 14 percent of U.S. consumers shop for their groceries online.

Shannon Devereaux of Marion said she buys meat online by the 40-pound case from Zaycon Fresh for several reasons.

'I like the prices, the quality of the meat and the fact that I can go home and package it the way I want it packaged,' Devereaux said. 'Sometimes we will take them and make four patties for the family, and sometimes we will put them in one-pound packages. I freeze it flat and that allows it to thaw very quickly.'

Devereaux said she learned about Zaycon Fresh from friends on Facebook.

'Everyone one I knew who had ordered chicken from the company said it was good quality,' Devereaux said. 'I liked how easy it was to order and they load it into your car.'

Lorrie Smith of Springville has been buying meat from Zaycon Fresh for about two years.

'The beef is grass fed, and that's important for me,' Smith said.

Gail Seitz of Cedar Rapids likes the ability to buy meat in bulk.

'I think it's an easy way to fill up your freezer,' said Seitz, who has made three purchases from Zaycon Fresh. 'The convenience is excellent. You just drive in, drive out and you're done.'

Zaycon Fresh is a relatively new entrant to the online grocery/meat business. The company was founded in 2009 by Michael Conrad and his brother, J.C. Conrad, who wanted to bring farm-fresh meat to the consumer.

'When you buy food at a grocery store, it may have been in multiple trucks or a freezer for 10 days or more,' said Jody Malordy, Zaycon Fresh marketing director. 'When you pick up your meat order from Zaycon Fresh, it will be from three to six days since it left the farm.'

Malordy said the churches where deliveries are made — the company calls them 'events' — receive a contribution to their food pantry.

'The people who run this company are very conscious of how important it is for people to be able to feed their bellies well without paying a small fortune,' she said. 'That's part of the rationale for giving back to the churches for the use of their parking lots.'

Meat and ice

The online grocery market is getting crowded with Amazon.com, Netgrocer.com, Peapod.com and other companies vying for the consumer dollar.

Wal-Mart, the largest retailer in the United States, announced in 2011 that it was testing its Wal-Mart to Go home delivery system, in which customers would be able to order specific items offered on the company's website.

The initial test was in San Jose, Calif., and Wal-Mart has not said when it will be rolled out nationwide.

Omaha Steaks has been shipping meat and other food items to individual customers in insulated coolers chilled with ice since 1952. Originally known as Table Supply Meat Co., the Omaha, Neb.-based company founded in 1917 by J.J. Simon and his son, B.A., primarily supplied grocers, railroads and restaurants with grain-fed beef.

Omaha Steaks was a pioneer in the use of the Internet, initially using an account in the 1990s with CompuServe, the first major commercial online service in the United States, for online sales.

Omahasteaks.com, launched in 1995, has become the company's fastest growing business segment.

Omaha Steaks today is the largest small parcel direct shipper of gourmet foods in the nation. The company's 400-item product line generates about $450 million in annual sales.

Meanwhile, Marshall, Minn.-based Schwan Food Co. has offered home delivery of frozen meats and other food products for more than 60 years. Schwan's Home Service, the company's flagship business unit, is the largest direct-to-home frozen-food delivery business in the country.

Schwan's Home Service markets and distributes more than 400 products under the Schwan's and LiveSmart brands.

'We service a little more than 90,000 customers in the state of Iowa,' said Pat Anderson, senior vice president of strategy, marketing and sales for Schwan's Home Service.

For many years, Schwan's received customer orders through the company's drivers. Anderson said that changed in 1998 when Schwans.com was launched.

'With so many online shopping options available, consumers have taken to the idea of shopping from the comfort of their home and having their products delivered — even for food,' Anderson said.

Supermarkets respond

As online grocery and meat shopping has grown in popularity, supermarket chains have taken notice and responded.

Hy-Vee Food Stores has offered online grocery shopping through www.ShopOurAisles.com/cedarrapids.asp. The service, which costs $10 if the order is picked up at a store and an additional $5 for home delivery, has not been widely promoted by the company.

In April, the West Des Moines-based supermarket chain launched Hy-Vee Aisles Online at select stores in central Iowa. Tara Deering-Hansen, assistant vice president of communications at Hy-Vee, said the service will become available later this year for Cedar Rapids-Marion area stores.

'We are doing a phased rollout of Hy-Vee Aisles Online,' Deering-Hansen said. 'Eventually it will be available throughout our eight-state territory.'

Home delivery of groceries is not a new concept.

Before Clarence Saunders launched a Piggly Wiggly self-service grocery store in 1916, in Memphis, Tenn., shoppers gave their orders in person or over the phone. Clerks fetched the goods, ground coffee beans, measured flour and sugar, and added the bills in pencil for payment.

Many grocery stores offered home delivery, usually by a clerk or the owner of the business. But the growth of regional and national supermarket chains led to the demise of the smaller grocery stores, ending home delivery of groceries in many communities.