Dive Brief:

• Online grocer FreshDirect announced that Jason Ackerman has stepped down as company chairman and CEO. He will be replaced by co-founder David McInerney, who previously served as the company’s chief merchandising officer.
• The departure of Ackerman, who helped start FreshDirect 20 years ago, comes as the company moves into what it calls a “new chapter” of growth. FreshDirect recently opened a sprawling 400,000-square-foot distribution and manufacturing facility in the South Bronx as it looks to expand on-demand delivery through FoodKick, the service it started two years ago.
• In a separate announcement on Wednesday, Hart Dairy, North America’s largest single-source producer of free-range grass-fed milk, announced Ackerman had joined its advisory board.

Dive Insight:

Ackerman, a former investment banker, co-founded FreshDirect in 1999 and helped guide it through a tough initiation period for online grocers. The company, which built its first distribution facility in Queens’ Long Island City neighborhood, drew frequent comparisons to Webvan, the delivery company that burned through $1 billion before shutting down in 2001.

But Ackerman and his co-founders always maintained that FreshDirect would succeed because it was focused on quality, customer service and measured growth. Its first motto: It’s all about the food.

That focus has helped FreshDirect grow into what’s arguably the strongest business model in online grocery today. The company takes in an estimated $800 million in annual revenues, and has more than doubled its sales since 2012, according to Bloomberg. Its service area stretches from Washington, D.C. up to Connecticut, with plans to bring Boston online soon.

That performance has come under pressure from numerous retailers, including Amazon-owned Whole Foods and Walmart, which offer lower prices on products and delivery. Whole Foods, arguably FreshDirect’s biggest threat, has steadily rolled out same-day delivery through Amazon Prime Now to markets along the East Coast, including New York City. Earlier this summer, Walmart announced it would build a Jet.com warehouse in the Bronx focused on grocery, home goods and general merchandise fulfillment.

The fact that FreshDirect decided to appoint McInerney rather than an outside name as its new CEO is telling. McInerney, a co-founder who has lead FreshDirect’s food sourcing and marketing efforts and has traveled the world in search of new products, is intimately familiar with the delivery company’s food-focused mission. FreshDirect may be entering a new chapter characterized by mounting competition and a push further into on-demand delivery, but it doesn't want to lose sight of the principles and practices that got it to this point.