What Instacart’s Carrot Ads Taught Us About Building Manufacturer Influence in Foodservice

TLDR

• Instacart’s Carrot Ads showed how retail media can turn purchase data into measurable manufacturer-funded campaigns.
• Cut+Dry’s Influence platform applies the same principle to foodservice through distributor relationships.
• Foodservice has stronger attribution potential because operators make intentional business purchases, not casual shopper clicks.
• Manufacturer-funded campaigns work when targeting, attribution, and distributor execution are all aligned.
• The future of foodservice Influence is giving manufacturers efficient access to operators without bypassing distributors.

The Carrot Ads Origin Story

Carrot Ads (Instacart’s retail media network) was built on a specific insight: the people who know what products grocery shoppers want to buy aren’t the grocery stores. They’re the manufacturers.

Instacart had data. Millions of orders. Shopper locations. Product preferences. Shopping history. But the company making the laundry detergent knew their addressable market way better than Instacart could ever know it through data alone.

So Carrot Ads asked a simple question: what if we give manufacturers access to that data and the infrastructure to fund campaigns directly to their target audience? Not at scale that doesn’t work. At scale that drives measurable ROI.

If a manufacturer could see that shoppers in certain geographies, with certain purchase histories, were underrepresenting their category, they could fund a campaign to reach those shoppers. Instacart got to monetize. Shoppers got better deals. Manufacturers got measurable ROI.

The model worked. Carrot Ads became the fastest-growing revenue line at Instacart.

We borrowed that DNA when building Cut+Dry’s Influence platform.

Why Retail Media Principles Translate to Foodservice

The structural problem in foodservice distribution used to be the same as the problem in grocery retail: information asymmetry.

A manufacturer could run a trade promotion and hope it worked. But they had no visibility into whether their products were actually reaching the right operators, whether the promotion was moving volume, or whether they could attribute sales to the campaign.

The distributor had the operator relationships but lacked the data infrastructure to run manufacturer campaigns at scale.

The operator had the purchasing power but was getting promotions that didn’t fit their menu or their business.

Carrot Ads solved that in retail by giving manufacturers a direct channel, backed by data, to reach their addressable market through the retailer relationship.

We built Influence to solve it in foodservice: give manufacturers a direct channel, backed by distributor data, to reach their addressable market through the distributor relationship.

The mechanics are different. The principle is identical.

The Four Pillars of Retail Media That Matter in Foodservice

Carrot Ads succeeded because it nailed four specific mechanics. All four translate to foodservice.

First: Attribution. Carrot Ads campaigns are tied to actual purchases. A manufacturer runs a $10,000 campaign. Instacart can show exactly how many shoppers were exposed, how many purchased, what the AOV was, and what the attributable revenue was. That’s not a projection. That’s a fact.

Foodservice distribution has a big advantage here: fewer decision-makers means clearer attribution. A campaign targets 50 independent restaurants. We can see exactly which ones purchased the promoted product and in what volumes. Attribution is cleaner than retail.

Second: Targeting precision. Carrot Ads lets manufacturers reach shoppers based on purchase history, location, product preferences, and dozens of other signals. A coffee brand can reach households that have never bought coffee but have high income. A snack brand can reach households with kids.

In foodservice, we target based on operator type (fine dining, casual, quick service), cuisine (Italian, Mexican, Asian), location, ordering history, and current product assortment. The targeting is different, but the precision is similar.

Third: Funded campaigns. Carrot Ads works because manufacturers control the budget. If a campaign doesn’t work, it’s the manufacturer’s money and the manufacturer’s decision to optimize or stop.

Foodservice Influence campaigns work the same way. Manufacturers fund the campaign. They see real ROI. They scale spend.

McCormick committed $100 million in annual sales through Cut+Dry distributor partners. Not because we forced it. Because they’ve run dozens of campaigns and seen consistent $14 in sales per $1 spent. The ROI justifies the spend.

Fourth: Transparency. Carrot Ads doesn’t hide the mechanics. A manufacturer knows exactly how many impressions, clicks, and conversions their campaign generated. They can calculate the ROI themselves.

We’ve applied the same principle to Influence. Manufacturers see campaign performance in real time. They can see which distributor partners are executing effectively. They can calculate the ROI themselves.

How Carrot Ads Redefined Shopper Economics

It’s worth understanding what Carrot Ads actually changed about retail economics.

Grocery stores like Instacart partner were mostly selling commodity products with thin margins. Growth was hard. Adding 10% more shoppers added maybe 10% more revenue. Linear.

Carrot Ads created a new revenue stream that was completely non-linear. A manufacturer’s willingness to fund campaigns created incremental revenue that didn’t depend on shopper growth. Better yet, funded campaigns actually drove shopper acquisition and loyalty.

Instacart didn’t need to compromise with retailers on margins. They had a separate, profitable business in retail media.

The Foodservice Translation

Foodservice distribution has faced similar economics.

Independent distributors survive on 15-20% gross margins. It’s hard to grow revenue faster than product volume grows. Your distributor gets 3% margin growth if volume grows 3%.

Manufacturer-funded campaigns break that model.

When a distributor runs an Influence campaign, they’re deploying manufacturer money. The distributor’s margin comes from executing the campaign effectively, not from taking a skim off the top.

The incentive structure is different. The distributor is motivated to run campaigns that actually move product, because the campaign ROI directly determines whether the manufacturer runs the next campaign.

It’s not a procurement transaction anymore. It’s a partnership where both sides benefit from the outcome.

Why Foodservice Has an Advantage Over Retail

There’s a structural advantage in foodservice distribution that retail media doesn’t have.

In retail, a brand running a Carrot Ads campaign is reaching millions of shoppers. The data is good, but individual shopper intent is opaque. Did they click because they were really interested, or because the ad was in their feed?

In foodservice, a brand running an Influence campaign is reaching operators. Fewer decision-makers. More intentional purchasing. Higher signal-to-noise ratio.

An operator who buys a product after seeing a manufacturer campaign isn’t a random click. They made a business decision. The attribution is clean. The conversion is real.

This means that campaign ROI in foodservice can be higher than in retail, because the decision-making process is more intentional.

Building the Influence Roadmap

What Carrot Ads taught us about scaling retail media applies directly to building Influence at scale.

You need to get the incentives right. Manufacturers don’t fund campaigns because they’re nice. They fund campaigns because they see consistent ROI. Every campaign that underperforms is money the manufacturer won’t spend next time.

You need to get the data right. Manufacturers need to trust the targeting. If a manufacturer funds a campaign targeting “fine-dining restaurants with high olive oil spend,” they need to know that the targeting is accurate.

You need to get the execution right. A campaign is only as good as the distributor executing it. A distributor who runs campaigns half-heartedly because they don’t understand the upside won’t move product for the manufacturer.

All three of those things were true at Instacart building Carrot Ads. All three are true at Cut+Dry building Influence.

What’s Different About Foodservice

There’s one crucial difference between Carrot Ads and Influence.

Carrot Ads reached shoppers who were already on the Instacart platform. The network was Instacart’s. The data belonged to Instacart. Retailers were intermediaries.

Influence reaches operators through distributors. The network is the distributor’s. The operator relationships belong to the distributor. Cut+Dry is the infrastructure.

This matters because it means the incentive structure is different. In retail media, more traffic and more shopper data benefits the platform. In foodservice, better distributor relationships and better operator loyalty benefits the distributor.

We designed Influence to amplify distributor advantages, not to substitute for them.

When a manufacturer campaign drives volume through a distributor relationship, both the manufacturer and the distributor win. The operator wins. Cut+Dry’s role is to provide the infrastructure that makes the campaign measurable and repeatable.

The Future of Manufacturer Influence in Foodservice

Carrot Ads proved that retail media could be a $5+ billion market opportunity. The proof point: manufacturers will commit significant budgets if they can see consistent ROI and measure it themselves.

Foodservice is earlier in that curve, but the pattern is clear.

We’re at $22 billion in GMV tracked across the network. Influence campaigns are running at scale. McCormick is allocating $100 million annually. Other manufacturers are scaling campaigns based on successful ROI.

The question isn’t whether retail media principles work in foodservice. The data says they do.

The question is how big the Influence market can become when manufacturers have efficient access to 140,000+ operators through 220+ trusted distributor relationships.

That’s what Carrot Ads taught us: the biggest business opportunity isn’t often in the obvious place. It’s in giving your stakeholders—in our case, manufacturers—efficient access to what they actually want, backed by data they can trust.

If you’re a manufacturer evaluating how to grow your foodservice business, the question isn’t whether digital channels work. It’s whether you have access to the right operators through the right distributors. We’d like to show you what’s happening on the Cut+Dry network.