Both traditional and Internet-based home delivery services attract time-pressed consumers willing to pay more for convenience.

Although the online grocery market has been around for about a decade, the market is still in its early stages. The novelty of online shopping attracted early adopters in the 1990s, but today’s cyber-shoppers are looking for ways to save time and pamper themselves.

And they’re finding many options for home delivery via the Internet, especially in urban areas. In 2004, the number of New Yorkers who told the Zagat Survey they ordered groceries online rose to 52 percent from 16 percent in 2003. Internet shopping represents only 0.4 percent of the $570 billion grocery business. But it is growing.

Schwan’s Global Home Service Inc., a unit of The Schwan Food Co., is expanding its Web site with new services into new markets, says Glenn Bader, director of e-commerce and emerging channels for the Alternative Channels Division at the company. “Giving customers options or appealing to these needs is what is fueling growth today. At Schwan’s, we have a unique advantage in the relationship between our route managers and customers. Schwans.com is a great tool to enhance that relationship to give the customer more control in their experience,” Bader says.

Bader says Schwan’s online customers are “more focused on meal solutions. They are buying from a broader set of categories and products that save them time feeding their family.”

He adds that Schwan’s recently expanded its Web site to provide mail delivery service for customers outside the primary marketing area.

Gorton’s leveraged its brand equity to offer seafood by mail order. Nancy Peterson, senior marketing manager at the company, says the top sellers are shellfish and lobster, especially in gift packs. Because Gorton’s home delivery is primarily for gift giving, special attention must be paid to how the items are presented to the recipients, Peterson says.

“Home delivery is very different from our retail business,” Peterson says. “Because fresh seafood is highly perishable, we need to pay special attention to packaging, refrigerant, etc. Also we don’t have control of the actual delivery since the carrier actually delivers the shipments.”

Peapod, an online grocery shopping and delivery service founded in Evanston, Ill., in 1989 and acquired by Royal Ahold of the Netherlands in 2001, reports annual sales growth of 25 percent. In its early days, orders were placed online, just not over the Internet. Peapod provided customers with software and sold the modems needed to dial in directly to the company. It serves customers in Chicago, Baltimore, Boston, Long Island, Washington, D.C., Connecticut, New Jersey and New York. The company plans to expand partnerships with Royal Ahold’s U.S. stores, Stop & Shop and Giant.

Online grocery FreshDirect almost doubled its 2003 sales to reach $100 million in 2004, according to The New York Times. Unlike traditional supermarkets, stock is almost 70 percent fresh and prepared food and 30 percent dry goods. The online grocery currently serves the New York City area and says it plans to expand to the Hamptons in Long Island this summer. — S.D.

Forrester Research predicts food and beverage sales on the Internet to increase from $3.7 billion in 2003 to $17.4 billion in 2008.

According to the Food Marketing Institute’s “Trends 2004,” 16 percent of respondents’ primary grocery stores offered online ordering, and 3 percent used the service. Online ordering was somewhat or very important to 16 percent of respondents.