Instacart says ads from General Mills, PepsiCo, and other consumer goods makers account for 15% of its revenue
but doesn't count a lot of costs like salaries: http://www.bloomberg.com/... http://twitter.com/...
Context & Ripple Effects
In March 2016, Instacart disclosed that ads sold to General Mills, PepsiCo, and other consumer goods makers already made up 15% of its revenue — an early signal that the delivery business was also becoming a media business, though Bloomberg noted the figure didn't count significant costs like salaries.
That seed grew into the company's core profit engine: by 2022, sources put Instacart's ad revenue near $740M, up 30% year over year and nearly 30% of total revenue, after the ads unit launched in 2019 (about $740M in 2022 ad revenue). When Instacart filed for its US IPO later that year, it reported $428M in net income on $2.55B of revenue (2022 revenue up 39% to $2.55B) — a swing from a $73M loss the prior year that tracked the ads ramp.
First-order effects
- CPG brands like General Mills and PepsiCo gain a paid placement channel at the exact moment of grocery purchase, and Instacart's revenue mix tilts toward high-margin advertising rather than delivery fees alone.
Second-order effects
- Retailers whose shelves Instacart operates now compete with their own suppliers for visibility inside the storefront, foreshadowing the platform tensions Instacart later hit over pricing control when customer pushback forced it to scrap item price tests run with Eversight technology.
- Rival grocery delivery and marketplace operators face pressure to build their own retail-media arms, since a competitor monetizing shopper attention can subsidize lower delivery economics.
Third-order effects
- If the pattern holds — ads doubling their revenue share from 15% in 2016 to nearly 30% by 2022 — grocery e-commerce consolidates around retail media as the profit center, with marketplaces selling brands access to purchase-intent data rather than margin on goods; Instacart's later steady quarters, including Q3 2025's $939M revenue and a planned $1.5B buyback (Q3 revenue up 10% to $939M), reflect a business sized around that mix.
The trend: Grocery e-commerce is being re-founded on retail media: platforms like Instacart convert shopper traffic and purchase data into brand-advertising revenue that, not delivery margins, carries the P&L.