Charlotte, N.C., became the first expansion market last week for online grocer Farmstead, which previously served customers only in its home base of San Francisco and Northern California.
On Thursday, Farmstead went live in the city of Charlotte, offering same-day delivery to all zip codes within the city limits. The delivery area will be rapidly expanded in the coming weeks to the Charlotte suburbs, the company said.
Farmstead works with local farmers and national distributors to stock up on consumers’ favorite products, including fresh produce and family-friendly national brands. Consumers go to Farmstead to set up an account and order, and the groceries are hand-selected and inspected by Farmstead’s team at its dark stores to ensure families are getting the best-quality products exactly as ordered. Farmstead then groups deliveries together to deliver to customers and their neighbors at the same time to help reduce carbon emissions. Customers can also sign up for a regular “Weekly Program” and get a 5% discount each time they buy the same product again.
Farmstead’s proprietary AI-based software tied to its smaller-format dark stores helps determine optimal inventory levels, ensure efficient order picking/packing/delivery, and reduce food waste. These efficiencies enable Farmstead to deliver for free while keeping prices lower than local supermarkets, and making fresh, high-quality groceries accessible to all.
“Since announcing our service for Charlotte last month, we quickly filled our waitlist,” said Pradeep Elankumaran, co-founder and CEO of Farmstead. “We moved fast to begin our delivery service before Thanksgiving as we know with stay-at-home directives people will be cooking at home and looking to get high quality groceries delivered right to their doorstep. As we’ve done in San Francisco, we’ll quickly expand our service area in the greater Charlotte area to accommodate the high demand.”
The company also announced last week that its next expansion market would the Raleigh-Durham region of North Carolina, launching its waitlist signup for service to begin in early 2021.
“We are excited to expand Farmstead’s presence on the East Coast,” said Elankumaran. “Grocery delivery demand has exploded, and Farmstead has made delivery cheaper than going to the store yourself. We can’t wait to bring our service to Raleigh-Durham.”
Last week, Farmstead announced that it had raised a $7.9 million Series A round of funding to accelerate its national expansion and recruiting, bringing its total funding to date to $14.5 million.
Farmstead’s business has grown swiftly in 2020, driven partially by shoppers’ preference for delivery over going to the store during the pandemic. In September, Farmstead launched Grocery OS to help traditional grocers take delivery in-house, and go head-to-head against Amazon’s national expansion.
“The Farmstead team worked hard in 2020 to perfect the dark store model and the underlying proprietary technology that makes Farmstead so incredibly efficient,” said Elankumaran. “We are laser focused on expanding Farmstead’s national brand, and adding more partnerships with grocery chains, helping them increase their daily delivery capacity while driving long sought-after profitability with each order. This industry has been stagnant for long enough — customers demand change and we are building the foundation for sustained e-commerce growth in grocery while exceeding their expectations.”