Online grocery orders continue to grow faster than in-store orders, promoting retailers to enhance their last-mile cold chain operations.
No matter how you analyze them, the trendlines are unmistakable. Americans like having multiple options — in-store, delivery and pickup — to get their groceries and are increasingly choosing all of the above to better manage their daily lives.
In August, the Morning Consult Retail Monthly Trend Tracker revealed that 77% of Americans purchased their groceries in-store in the past month, down from 85% in October 2021. Consumers opting for grocery delivery increased to 29% from 17% during the same period. The D.C.-based research firm also found higher percentages of Americans using curbside and in-store pickup services offered by grocers. Fifteen percent currently use curbside pickup, up from 12%, and 14% go in-store to pick up orders, compared to 8% in 2021.
The latest shopper survey from Barrington, Ill.-based Brick Meets Click finds that U.S. online grocery sales rose to $11.2 billion in August, nearly 14% higher compared to the same period last year. The survey reveals that the number of households shopping online for groceries increased during the month, as did order frequency and average order values.
The Morning Consult and Brick Meets Click studies reinforce what other research and anecdotal accounts have pointed out in recent years. The percentage of consumers comfortable shopping online and via apps for groceries has continued to grow rapidly since the pandemic. At the same time, grocery retailers and third-party platforms are continually working to improve digital shopping experiences, streamline and enhance fulfillment options, and boost customer service levels.
Variety of challenges
Industry experts say that shoppers have come to expect that the fresh, frozen, and refrigerated items they order will be delivered on the same day. The challenges in meeting these expectations are varied and, at times, daunting, especially in relation to frozen and refrigerated foods.
Getting last-mile fulfillment right is particularly challenging with geographical location, weather, transportation infrastructure, equipment maintenance, labor availability and many other factors all having the potential to create operational snafus, drive up costs and tank a grocer’s reputation in the view of its customers.
Jeff Bornino, president, North America, at TMX Transform, a supply chain consultancy headquartered in South Melbourne, Australia, says that it’s critically important for grocers to narrow the distance that drivers have to travel when making deliveries to customers’ homes. "The goal is to get the most number of stops into the smallest radius possible," says Bornino, whose resume includes stints as a supply chain vp at both Kroger and Giant Eagle.
Ani Mishra, engineering manager at San Francisco- based DoorDash, agrees that cutting the time it takes to make deliveries is key to performance in the grocery sector. Seattle-based Mishra, who heads up the delivery platform’s new vertical logistics engineering organization focused on last-mile delivery, says that drivers have 60 minutes to deliver grocery orders and no more. “Delivery drivers have to discard food if it has been in transit for more than 60 minutes due to traffic, weather or other issues. The delivery provider bears the cost of this spoilage,” he adds.
However, inefficient routing practices can make it challenging to deliver within 60 minutes, says Mishra. This could also create a situation where more drivers are needed to meet delivery windows, leading to higher costs.
One of the most important technologies to have is efficient routing optimization software that minimizes miles driven for frozen and perishable food deliveries. The grocers that are winning in home delivery have invested in dynamic route optimization software.
“The biggest cost drivers in coldchain last-mile delivery are vehicles, fuel, labor costs for drivers and material handlers, along with energy for cold storage maintenance,” says John Boyd, Jr., principal at The Boyd Company, Inc., a Boca Raton, Fla.- based consulting firm focused on the supply chain and logistics.
Minimize mishaps
Maintaining the integrity of the cold chain may be challenging, but it is also non-negotiable. Supply chain experts emphasize that grocers must concentrate on eliminating errors, even though some may seem virtually inevitable.
A common mistake is freezing ice cream at standard frozen food temperatures when it requires a constant temperature of at least -15°. A best practice is to have all frozen items kept at ice cream frozen temperatures and never let the item out of its desired temperature state.
"Similarly, it’s OK to have dry items, such as cereal, stored at refrigerated temperatures, so keeping the delivery vans chilled is a good idea,” says Bornino.
Short of having a fleet of refrigerated vehicles to deliver orders, grocers need to have insulated packaging to maintain the integrity of cold foods and beverages in transit to their final destinations. In fact, Mishra says not having the right packing or equipment to safely transport frozen and refrigerated goods is a common mistake. As a third-party delivery provider, however, he sees other issues that often affect last-mile performance.
The first involves human error. “Orders often contain a mix of frozen, refrigerated and non-frozen items. The delivery driver might miss sorting some of the items, leading to them being stored improperly in the vehicle,” he explains.
The second issue speaks to the accuracy of product data. “Sometimes refrigerated items are not correctly tagged in the store catalog data, which can lead to a delivery person being instructed by the app to handle them like regular items,” Mishra says.
All experts agree that the efforts of in-house or third-party systems to protect frozen and refrigerated food and beverages in transit can be wasted once orders are delivered, as products begin to degrade from the moment they are dropped off.
You could have been perfect throughout the entire cold chain journey and ruin everything at that last moment when it’s delivered. So make sure you have clear communication as to when the delivery will happen to avoid breaking the cold chain at the last moment.
“Food might sit outside the customer’s door for a long time after delivery, making it risky for consumption. This dwell time is a significant risk factor,” agrees Mishra.
To this same end, drivers need to be well-versed in following delivery instructions, which sometimes require going beyond simply finding the correct address. Senior citizens, the disabled and others may have specific requests for delivery, and drivers who fail to follow these instructions could potentially compromise product integrity. Even if that is not the case, not following directions will still likely reduce the customer’s satisfaction with the level of service being provided.
Getting it right
Experts say they find similarities between grocers and delivery platforms that are nailing the last mile. Boyd says that best-in-class organizations have automated cold storage facilities, state-of-the-art temperature and transport monitoring systems, and insulated packaging to safeguard the flow of goods throughout the cold chain, from the first mile to the last.
“Publix/Instacart and Whole Foods/Amazon are probably the top two examples of best practices in cold storage and last-mile delivery in the hot and stormprone South Florida grocery market,” Boyd adds.
“One best practice I have seen is that they have a dedicated, refrigerated area where delivery and pickup orders can be staged before they are picked up by the driver or the customer. This helps ensure the items can stay at a safe temperature longer, offering more durability even if there is a delay in pickup or delivery,” says Mishra.
Third-party providers focused on maintaining the 60-minute store-to-home standard also have options for delivering the same frozen and refrigerated items from an alternative location if the original starting point becomes unworkable due to real-time traffic conditions.
Companies engaged in real-time weather monitoring can use that knowledge to either appropriately tighten the 60-minute window when temperatures soar or expand it when temperatures fall to below freezing levels.
The grocers that are doing the best job of maintaining food-safe temperatures during home delivery do a very good job of maintaining the cold chain at every step of the way, from procurement to delivery.
They oftentimes have their own vans equipped with temperature monitoring devices, and they perform routine temp audits. Their products are also always loaded in chilled environments, and all of their frozen foods are kept at ice cream temperatures,” says Bornino.
He emphasizes that it’s crucial for retailers to use high-quality insulated bags or coolers and to implement temperature monitoring technology for last-mile deliveries. Grocers can also utilize frozen gel packs to maintain
cold temperatures for refrigerated items on short trips. Dry ice should be used for ice cream even when delivering orders over short distances.
Regarding whether grocers are better off fulfilling lastmile orders in-house or through third-party partners, the experts’ answer is, “It depends.” Bornino, the former grocery chain executive, says the argument for keeping everything in-house comes down to control. “You have a better chance of maintaining product integrity when you’re managing it yourself because you can control the training of your staff and the selection, storage and delivery processes. The sensitivity associated with cold chain adherence requires proper training, so if a third party isn’t properly trained, it could spell trouble for the quality of product when it reaches
the customer,” he explains.
However, Mishra says working with third parties provides flexibility and associated cost savings. “The biggest challenge with leveraging in-store staff is keeping them utilized, because demand for delivery often comes in bursts throughout the day. Third-party delivery companies provide elastic labor that can be increased or decreased depending on demand,” he explains.
Emerging options
Experts say that emerging technologies, once considered by some to be long shots in proving their use cases in pilot programs, may have a role to play in helping grocers improve their last-mile performance.
“Autonomous is a trend we are seeing. In Miami, Serve Robotics has partnered with Uber Eats, Shake Shack and Mister O1 Pizza to launch an autonomous sidewalk robot delivery system. In Las Vegas, Starship Technologies also operates autonomous delivery robots for food and
beverages,” says Boyd.
Drones are another technology generating buzz, largely due to Walmart’s expansion of its delivery program to millions of customers in Arkansas, Florida, Georgia, North Carolina and Texas.
“Drones have shown lots of promise in being able to cover longer distances in a short amount of time, making them suitable for transporting frozen items over a greater range. However existing drone solutions face challenges when it comes to cargo size and weight limitations, often making them unsuitable for fulfilling a family’s weekly grocery order. In addition, the regulatory landscape for drones is still in its infancy,” says Mishra.
Another cold solution gaining attention is refrigerated pickup lockers, which are being tested by Albertsons Cos. and others. “Refrigerated pickup lockers provide a secure, temperature-controlled environment for customers to retrieve their orders, reducing the risk of products sitting out on a doorstep; however, they come with a significant maintenance cost for the delivery provider,” says Mishra.
This article was originally published in Frozen and Refrigerated Buyer Newsletter's October 2025 edition.
Reach out to Jeff Bornino on LinkedIn.