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SNAP Purchasing Gaining Traction Online

headshot of Attention FWD contributor Micheal Shapiro
Michael Shapiro / Jul 27, 2021
Propelled by pandemic, federal benefit recipients move to online grocers and find better selection, prices and convenience

When Jay Santana, a 53-year-old advertising copywriter and Supplemental Nutrition Assistance Program (SNAP) recipient in southeastern Iowa, received a notice from Amazon telling him he could use his benefits online, he immediately ordered groceries from the world’s largest e-commerce site.

“I actually had more options than in the stores here,” he says. “At Amazon you can get some great prices on bulk purchases, like 10 pounds of spaghetti noodles for less than 50 cents a pound. In stores locally it costs about a dollar a pound.” Amazon shows which products are SNAP-eligible, he says, and its selection of fresh produce and specialty items is better than what’s available nearby.

“For example, I can’t get prosciutto any place locally. That’s one of my sinful snacks, so to speak,” he says. Santana lives about 50 miles from Iowa City, and though he won’t call the area a “food desert,” he says that until online purchasing and food delivery opened to SNAP recipients, his food choices were slim.

“Sometimes I feel like they forget that we’re here,” he says, speaking of brick-and-mortar grocers. “It’s somewhat depressing sometimes. I go to Chicago and realize how much there isn’t here.”

47 States Allow SNAP Benefits Online

As of summer 2021, 47 states and Washington D.C. enable SNAP recipients to use their benefits to buy groceries online. A surge in online grocery buying, including among SNAP recipients, occurred when sheltering-in-place due to the Covid-19 pandemic began in March 2020.

Because of increased unemployment, the number of SNAP recipients rose from 37.2 million in March 2020 to 42.5 million in March 2021—a 14.2 percent increase—according to recent USDA data.

With food insecurity rising and millions more consumers now shopping online, linking their e-commerce programs with SNAP has become a top priority for many grocers.

Catherine Douglas Moran

Associate Editor, GroceryDive

In this market, titans like Amazon and Walmart have an edge because they have far greater resources than regional chains for implementing systems that automate the process of picking and packing. This has the potential to change the retail landscape and give an advantage to the behemoths. Regional retailers without a robust delivery program who rely on third parties like Instacart, are likely to be hurt.

Among President Biden’s first actions was signing an executive order directing the government to “provide equitable emergency economic relief to working families, communities and small businesses across the nation.” The order extended a 15 percent SNAP pandemic-related benefit increase.

The digitization of SNAP and other federal benefit programs began before the turn of the millennium but gained traction in recent years, accelerating as the pandemic led millions of people to order groceries online for the first time. The federal government sought to offer SNAP recipients the same access as those with greater means.

“People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food—by ordering and paying for groceries online,” said then-US Secretary of Agriculture Sonny Perdue in 2019. “As technology advances, it is important for SNAP to advance too, so we can ensure the same shopping options are available for both non-SNAP and SNAP recipients.”

Online SNAP Access Is Good for Grocers Too

Bagrat Safarian, CEO of Local Express, an e-commerce platform designed to provide an Internet platform for food retailers, says that enabling SNAP recipients to use their benefits online is a win for retailers as well as consumers.

“The advantages for grocery retailers with SNAP participants using a card-based system over paper are obvious; and conserving time and money by eliminating the counting and bundling of food stamps is the most significant,” he writes in a June 2021 article in Progressive Grocer.

“State governments issuing the benefits also encourage digitization of SNAP benefits because it results in a reduction of paperwork and mailing costs; additionally, they are able to better control fraud and black-market usage.” Safarian notes that 2020 saw the biggest jump in demand for SNAP assistance since the initiation of the program (formerly known as food stamps), which began during the Depression.

Last fall, the grocery delivery service Instacart announced it would enable SNAP purchasing at more than 600 ALDI stores in the US. (ALDI is the German conglomerate that owns Trader Joe’s and many other food retailers.) “The integration marks the first time SNAP participants will be able to use their EBT cards on Instacart as retailers look to combat food insecurity and make it easier for millions of shoppers enrolled through the federal program to purchase groceries,” reported the site GroceryDive.com.

In May 2021, more than 2 million SNAP households shopped online, the USDA spokesman says, compared to just 35,000 SNAP households that shopped online in March 2020.

“With food insecurity rising and millions more consumers now shopping online, linking their e-commerce programs with SNAP has become a top priority for many grocers. For ALDI, the tie-up is another way the fast-growing discount grocer is putting a charge in demand,” wrote Catherine Douglas Moran in the GroceryDive story last October.

Instacart now partners with more than 4,700 stores in 41 states and Washington D.C. An Instacart spokeswoman said the company’s mission is “to create a world where everyone has access to the food they love and more time to enjoy it together. When Covid-19 hit the US, food insecurity—a long-standing problem in this country—was exacerbated by the pandemic. As the country continued to grapple with the effects of Covid-19, we understood that millions of Americans were struggling with food access, and we wanted to unlock EBT SNAP payments on the Instacart marketplace to help Americans access the fresh, quality food and pantry staples they need.

“Covid accelerated a long-term trend of grocery shopping moving online that was already well underway, and new habits have been formed that we believe are here to stay,” the spokesperson says. “We’ve also continued to lift up our brick and mortar partners and serve as a chief ally to retailers by delivering incremental growth and strengthening their relationship with their customers.”

Per federal regulations, SNAP benefits may only be used for groceries, not for taxes, fees, tips or memberships. (Instacart has a membership program that eliminates or reduces fees.) But Instacart is waiving delivery fees for some SNAP orders and Amazon has no delivery fee on orders over a threshold (typically $25 to $35, this varies by location).

From One State to 47 in Two Years

The SNAP Online Purchasing Pilot was launched in April 2019 in New York State, with five additional states joining the pilot through the early months of 2020, says a USDA spokesperson. “We’re proud of how far USDA has come in the last year,” he says, “with the expansion of SNAP online purchasing to 47 states and D.C.” Alaska, Louisiana, and Montana are the outliers.

In May 2021, more than 2 million SNAP households shopped online, the USDA spokesman says, compared to the 35,000 SNAP households that shopped online in March 2020. “This reflects our commitment to meet our customers’ needs and to provide SNAP beneficiaries access to online shopping just like any non-SNAP customer.”

Today, more than 97 percent of all households receiving SNAP live in states that have access to online purchasing through retailers, he says. The list of online retailers, ranging from Walmart to Piggly Wiggly, is categorized by state on the USDA’s website. “We continue to work on the expansion of this program to allow more individuals the ease of shopping from home. That is why the American Rescue Plan, signed by President Biden on March 11, 2021, included $25 million for initiatives that support and forge the way for SNAP issuance modernization, which includes online purchasing.”

The boom in online grocery shopping does have its downsides, such as more plastic waste and a heavier burden on already-stressed grocery stockers and warehouse workers, according to Sapna Maheshwari, a New York Times business reporter who wrote a June 4 story titled, “It’s Hard Work to Make Ordering Groceries Online So Easy.” But for most people, the benefits outweigh the costs.

Santana, the ad copywriter in Iowa, intends to keep buying groceries through Amazon. For him, the bottom line is the bottom line.

“Food is a lot less expensive online,” he says, noting he receives $192 per month in SNAP benefits. “With what SNAP provides, I can actually survive. I’m not having to skip meals or miss meals completely in order to make that $192 stretch.”