Dive Brief:

• Online grocer Farmstead has partnered with DoorDash to provide one-hour delivery in all markets where the online grocery retailer currently operates or intends to provide service, according to a Tuesday press release.
• As part of the arrangement, Farmstead will also allow any retailer using its Grocery OS online order-management technology to make deliveries through Drive, DoorDash's white-label fulfillment platform.
• ​Farmstead's tie-up with DoorDash comes as the California-based e-grocer moves forward with an expansion effort intended to bring it to at least 15 new cities in 2021.

Dive Insight:

Fresh off a year that saw it raise $7.9 million in new funding and the recent additions of Charlotte and Raleigh-Durham, North Carolina, as new markets, Farmstead is looking to intensify its presence in the online grocery space.

The company has its sights set on the twin goals of offering its namesake grocery delivery service in markets across the country and expanding the role its homegrown Grocery OS software plays in enabling other food retailers to build their own e-commerce operations.

By the end of the year, Farmstead intends to establish service in Nashville, Tennessee; Miami; and at least 13 other cities, the company said in the press release. Customers will be able to place orders with Farmstead using DoorDash's app and website in all of those locations in addition to its first market in the San Francisco Bay Area and its existing markets of Charlotte and Raleigh-Durham.

At the same time, Farmstead is positioning Grocery OS as a way for other grocers to also gain access to DoorDash's user base. Under Farmstead's deal with the delivery company, retailers that use Grocery OS will be able to sell groceries on the delivery platform, which entered the grocery-delivery sector in August with Smart & Final, Meijer and Fresh Thyme Market. 

Farmstead is looking to increase its presence in grocery delivery against a backdrop of strong customer interest in pickup services. Grocery chains have invested heavily in their click-and-collect operations over the past year amid intense customer interest in avoiding the need to enter grocery stores.

But Farmstead is looking to stand out by marketing its delivery-only service as a way for people to take advantage of the convenience of having groceries delivered to their doorsteps while saving money. The company says its emphasis on artificial intelligence and dark stores that serve costumers in a 50-mile radius allows it to sell products at lower prices than local supermarkets.