Dive Brief:
- E-grocer Farmstead has brought its grocery delivery service in Chicago and surrounding areas, according to a press release on Monday.
- In announcing its arrival, Farmstead noted its wide delivery range in and around Chicago and assortment mix of local and national items as differentiators. The company has opened a 30,000-square-foot warehouse in Franklin Park, Illinois.
- With five markets now under its belt, Farmstead is continuing to grow its U.S. presence but is expanding at a slower clip than the company initially indicated.
Dive Insight:
Along with Chicago, Farmstead is also available in the San Francisco Bay area, Miami, and Charlotte and Raleigh-Durham, North Carolina. The California-based company has been working to find its footing on the East Coast, which has seen an explosion of ultrafast firms.
Service was originally expected to arrive in Nashville, Tennessee, in 2021 along with several other markets that year. Austin, Texas, another planned city, hasn't welcomed Farmstead yet, either.
Farmstead, which offers same-day delivery and is focused on scheduled, batched orders, is looking to stand out with its assortment and delivery range. The Chicago area delivery range reaches the Minnesota border to the north, just past Aurora to the west, and touches Joliet at its southern end.
Farmstead said more than 70% of customers sign up for weekly service, which provides them with more discounts on products they purchase on a regular basis. The company also offers delivery in as little as an hour.
Farmstead opened its customer waitlist for Chicago service in mid-January. In the Windy City, Farmstead is up against not only brick-and-mortar competitors but also several online-only players, some of which, like Go Grocer and Getir, also promise quick delivery.
For local assortment, the e-grocer said it's offering brands like Oberweis Dairy, Intelligentsia Coffee, Gino’s East Pizza, Vienna Beef and Hometown Bagel Chips.
“With Farmstead, customers get the best quality, local produce; great local Chicago brands and national brand staples all in one place, with no markups or fees. And we can deliver quickly in a broad radius, not just downtown," Pradeep Elankumaran, co-founder and CEO of Farmstead, said in a statement.
Other grocery delivery companies have also tuned into local brands, tapping into customer support for businesses in their communities and desire for a more environmentally friendly supply chain.
Along with its geographic expansion, Farmstead has worked on ramping up its e-commerce solutions for retailers. In November, the company expanded its toolbox for food retailers, providing them resources to stand up a dark-store delivery operation in two weeks and access to warehouse space and "multiple" last-mile delivery services. Later that month, Farmstead partnered with personalization technology company Halla to give food retailers the opportunity to customize their e-commerce offerings.
The new e-commerce capabilities complement Farmstead's Grocery OS grocery delivery-management software, which it started offering to grocers in 2020. Farmstead has pointed to its artificial intelligence technology and dark store model, with warehouses that can serve a 50-mile radius, as a way for both itself and other food retailers to maximize efficiency and reduce costs.
