Dive Brief:
- Farmstead is expanding an automatic product refill program to all of its current and upcoming markets, according to a press release from the online grocer. The service was previously only available in the San Francisco Bay Area, where the company is based.
- Through the Refill & Save program, shoppers select products they’d like replenished weekly at a discounted price. Seventy percent of Farmstead’s Bay Area shoppers use the program, according to the announcement.
- The program also allows Farmstead to promote added value to suppliers as it expands to markets nationwide.
Dive Insight:
Similar to Amazon’s Subscribe & Save, Farmstead’s Refill & Save program lets weekly customers turn on recurring deliveries for certain products, with product discounts. The service has been in test mode in the company’s San Francisco Bay Area hometown market since 2019 and last year expanded to same-day delivery customers.
The latest announcement notes Refill & Save centers on staple items like milk, eggs, bread and produce. A recent check of Farmstead’s delivery storefront in San Francisco revealed a majority of products sporting the circular “Refill & Save” logo, from whole tomatoes to ice cream, salsa and fresh chicken. A bottle of Heinz ketchup offered a 15% discount while a tub of Straus Creamery yogurt offered 10% off.
Refill & Save customers have to spend a minimum of $35 each week through the program to be eligible for discounts, a company spokesperson said.
Farmstead has made competitive pricing a core part of its business model as it targets not just affluent Bay Area shoppers but also mid-market shoppers in places like Charlotte, North Carolina, where it opened earlier this year. The company doesn’t charge a delivery fee on orders over $35 and touts pricing that matches or beats brick and mortar grocers.
To get more brands signing up for Refill & Save, Farmstead says it will feature products as recommended items, position them in email newsletters and offer shopper data reports. Asked about the financial arrangement between the company and suppliers enrolled in the program, the spokesperson said suppliers generally pay a manufacturer charge-back, which is based on a discount off the wholesale price for units sold through the program.
Eventually, Farmstead plans to offer boosted search tools and separate branded pages for suppliers in the program.
In addition to San Francisco and Charlotte, where sales in the first several months have exceeded expectations, Farmstead also operates in Raleigh-Durham, North Carolina. The company plans to open soon in Miami; Nashville, Tennessee; and Austin, Texas, and will expand to at least 12 additional markets this year. It operates manual-pick dark stores that deliver to customers in a 50-mile radius and also offers one-hour delivery on both coasts.
