Online grocer Farmstead open for business in fifth city

A San Francisco-based online grocer is establishing a presence in a major Midwest metro area.

Farmstead, which initially launched in 2016 as a free online delivery service for fresh, locally sourced produce, is now live in the city of Chicago and nearby suburbs. The company offers a mix of fresh produce, national brands, and local brands in each market it serves. As part of its Chicago expansion, Farmstead is opening a new 30,000-sq.-ft. warehouse in the Franklin Park suburb of Chicago.

In addition to Chicago and its operational base in the San Francisco Bay area, Farmstead also serves the Miami, and Charlotte and Raleigh-Durham, N.C. markets. Farmstead offers no-fee delivery and enables customers to choose a same-day delivery slot (a two-to-four-hour guaranteed delivery window) for one-off, every day ordering, or sign up for free once-a-week delivery.

[Read more: Online grocer Farmstead automates discount product recommendations]

All Farmstead deliveries are batched together with other orders in the same neighborhood, to reduce carbon emissions. The company leverages proprietary artificial intelligence (AI) technology and a dark store model with delivery-centric warehouses that generally serve a 50-mile radius, in an effort to maximize efficiency and reduce costs. To create savings for customers, Farmstead uses AI-powered predictive models to improve efficiency and reduce costs in its supply chain. In addition to passing the savings along to customers, Farmstead hopes to help local growers increase sales.

Farmstead’s predictive models are self-learning, which enable the retailer to accurately predict demand to avoid overstocks. This reduces food waste, while also optimizing delivery routes to save time and conserve fuel. As a result, Farmstead says it offers prices comparable to or lower than most supermarkets, but with free delivery to doorstep.

The company plans to expand nationwide to a primarily suburban, mid-market audience. In April 2021, Farmstead launched a partnership with DoorDash to make its service available through the DoorDash app and website for one-hour delivery. The partnership operates all of Farmstead’s active markets, as well as upcoming markets such as Nashville.

In addition, Farmstead has integrated its proprietary Grocery OS on-demand delivery software with DoorDash, so that any retailer licensing Grocery OS has immediate access to DoorDash’s platform and delivery network via the DoorDash Drive white-label fulfillment platform. Grocery OS users will be able to list their own brands powered by dark locations on DoorDash’s app and websites for one-hour delivery.

“Farmstead is different from any other grocery delivery option in Chicago,” said Pradeep Elankumaran, co-founder and CEO at Farmstead. “With Farmstead, customers get the best quality, local produce; great local Chicago brands and national brand staples all in one place, with no markups or fees. And we can deliver quickly in a broad radius, not just downtown. We’re excited to show Chicago that there’s a better way to get groceries online.”