Dive Brief:

• San Francisco-based online grocer GrubMarket has completed the acquisition of VIP Wholesale, a produce and specialty food supplier based in San Diego, the company announced in a press release.
• GrubMarket plans to leverage VIP Wholesale’s expertise and location to support and expand its existing supply chain in Southern California. This is GrubMarket’s second acquisition this year.
• VIP Wholesale, which supplies food to restaurants and grocery stores, will remain headquartered in San Diego and will maintain its existing leadership team.

Dive Insight:

Since its founding in 2014, GrubMarket has continued to raise funds and expand its capabilities, most recently bringing in $25 million in Series C1 funding last month, which will be used for acquisitions and technology. In total, GrubMarket has raised $89 million since it launched. Last summer, GrubMarket partnered with AutoX to pilot autonomous delivery vehicles in San Jose, California and it appears that the pilot is still underway.

GrubMarket, which serves the San Francisco and Los Angeles markets, has been heavily focused on its Southern California operations in recent months. In January, the company announced a similar acquisition of another wholesale distributor, Chasin Foods, also based in Southern California. It also bought So Cal Farm Networks, which purchases and supplies farm-grown produce, in 2018.  

Its focus on farm-to-table, seasonal and organic groceries is not unique to the marketplace, but GrubMarket's customer base differentiates it. The company serves both businesses — think food startups, meal kit companies and restaurants — and consumers, offering a wide assortment of local and organic foods. 

When it comes to its business-to-business operations, GrubMarket may be devouring the competition. While these recent acquisitions can boost the grocer’s supply chain and help it scale more quickly, they also eliminate some of its closest competitors, as TechCrunch recently noted.

However, GrubMarket still faces stiff competition from consumer-facing companies with similar offerings in startup-saturated California. Online grocer and meal kit company Good Eggs has been hard at work expanding in San Francisco and relaunching in Los Angeles since a $50 million investment brought it back to life last year. Though much smaller with less ability to scale, Los Angeles-based Milk and Eggs offers a hyperlocal product assortment for farm-fresh hungry customers. Bay area-based Farmstead continues to roll out more grocery offerings and new tech features to advance its customer service abilities, too.