FreshDirect co-founder said the increase in online shopping has led to more venture capital

FreshDirect co-founder and former CEO Jason Ackerman said the growing customer interest in online grocery shopping during the coronavirus pandemic has sparked the appetite of venture capital firms.

In an interview with CNBC’s Squawk Alley, he said the surge in online shopping has inspired more investors to take a closer look at the sector.

“I’m seeing more grocery deals online … than I’ve seen before,” he said.

In the United States, customers have been slow to embrace online grocery shopping. Only 3% or 4% of spending on groceries in the US USA I was online before the coronavirus outbreak.

However, during the pandemic, online grocery shopping has quickly gained popularity as people look for ways to avoid the grocery store. Grocery stores and delivery services, like Instacart and FreshDirect, have struggled to pick up pace and meet that sudden surge in demand.

Ackerman said the challenges have underscored the need for more infrastructure investments to accelerate order fulfillment, reduce costs and improve the customer experience. He said some manufacturers are limiting production to popular items, and supermarkets are narrowing their selection of online deals to have fewer out-of-stock items and substitutions.

“A lot of people are moving towards a ‘Keep in stock what you can. Offer fewer options, so what you offer can be kept on the shelf,'” he said. “That’s a big concern, particularly online, where a lack of stock results in half of the orders.”