Instacart says ads from General Mills, PepsiCo, and other consumer goods makers account for 15% of its revenue
Instacart Gets Red Bull and Doritos to Pay Your Delivery Fees — The grocery delivery startup says ads from General Mills, PepsiCo, and other consumer companies account for 15 percent of revenue.
Context & Ripple Effects
This 2016 disclosure lands a year after Instacart quietly rebuilt its economics around grocer fees instead of delivery fees and markups, and it reveals the second leg of that pivot: consumer packaged goods brands — General Mills, PepsiCo, Red Bull, Doritos — paying for placement inside the app. At 15% of revenue, advertising is already material, not an experiment.
The arc since then validates the move: by 2022 Instacart's ads unit, launched in 2019, was generating about $740M — nearly 30% of company revenue per reported figures — and the company's stated strategy became selling software to grocers alongside more ads. This early CPG-ad number is the first public marker of what became the margin engine.
First-order effects
- CPG brands like General Mills and PepsiCo gain a paid digital shelf on top of physical grocery shelves, with Instacart monetizing purchase intent at the moment of ordering rather than charging shoppers more.
- Instacart reduces its dependence on delivery fees and grocer fees, adding a high-margin revenue line funded by brand marketing budgets.
Second-order effects
- Rival grocery delivery platforms face pressure to build their own sponsored-product businesses, because a competitor subsidizing delivery costs with ad dollars can undercut on fees.
- Grocers watch their e-commerce intermediary capture brand ad spend that historically flowed through trade promotions and in-store displays, setting up tension over who owns the customer relationship and the data.
Third-order effects
- If the pattern holds — and the growth from 15% of revenue in 2016 to roughly 30% by 2022 suggests it did — grocery e-commerce consolidates into retail-media economics, where the marketplace's profit comes less from moving goods than from auctioning access to shoppers.
- Brand marketing budgets structurally migrate toward closed-loop channels where purchases are measurable, weakening traditional grocery trade-promotion spending and giving platforms like Instacart pricing power over both brands and retailers.
The trend: Grocery marketplaces are converting shopper purchase intent into an advertising business, with retail media becoming the primary margin layer atop delivery logistics.