Dive Brief:
- Online grocer Misfits Market has expanded to California, and now serves 44 states and Washington, D.C, the sustainability-focused online food retailer announced in a Wednesday press release.
- Misfits has also added dairy products to its assortment, including butter and 25 hard and soft cheeses, and plans to start selling milk, yogurt and eggs "in the coming months."
- Misfits Market is in the midst of a nationwide expansion program fueled by $225 million in funding it brought in from investors in September.
Dive Insight:
Misfits Market's latest moves to broaden its reach and the variety of goods it carries continue the company's efforts to diversify beyond its roots selling unattractive produce.
The technology-driven startup, which was founded in 2018, has raised more than $525 million from investors, the majority of which it brought in this year. Now valued at $2 billion, the company is intent on using its funding to develop into a full-service online supermarket, said Misfits founder and CEO Abhi Ramesh.
"Our goal has always been to build the affordable online grocery store that doesn't exist today. And every step we've made over the past couple years has been on that same trajectory," Ramesh said. "The plan is to really open up every aisle that exists at a grocery store and … power geographic expansion as well."
Beyond produce and its new dairy selection, Misfits sells products including seafood, meat and plant-based proteins.
Ramesh said he believes Misfits is in a strong position to achieve its ambitions because traditional grocers are so heavily attuned to running physical stores that building an online presence represents a steep, costly challenge
"I think it's going to be fascinating to see where it falls out," said Ramesh. "We basically look at it as you have Walmart and Amazon on one side. You have up-and-coming newcomers like us on the other side, the e-commerce-first folks. And then in the center, you have the incumbent brick-and-mortar grocers that are trying to figure out what to do."
According to figures provided by the company, Misfits has doubled the size of its assortment to 500 SKUs during the past four months and expects that figure to reach 1,000 within the next six months.
In addition, Misfits saw its active customer base and order volume increase by a factor of five in 2020, and its average order size is now above $52, compared with $24 at launch, the company added.
Beyond becoming a full-fledged food retailer, Misfits is intent on reducing food waste and has set a goal of eliminating food deserts in the United States by 2025. The company has prevented 225 million pounds of food from being discarded since it began operations, according to the press release.
