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Online grocer Farmstead partners with DoorDash on national expansion

Farmstead, an online grocer that offers fresh, high-quality groceries, delivered for free, announced a new partnership with leading last-mile logistics platform DoorDash with three primary elements:

  • Making Farmstead’s grocery brand available through the DoorDash app and website for one-hour delivery in all of Farmstead’s active markets covering 19 million households, and including its upcoming 15 city expansion covering 75 percent of the $1 trillion U.S. grocery market;
  • Integrating Farmstead’s Grocery OS software with DoorDash, so that any grocer using Grocery OS has immediate access to DoorDash’s platform and delivery network via Drive, DoorDash’s white-label fulfillment platform that powers direct delivery for any business; and
  • Grocers can list their own brands powered by dark locations on DoorDash’s app and websites for one-hour delivery, increasing their reach and simplifying delivery operations.

This news comes on the heels of Farmstead raising $7.9 million in new funding to accelerate its national expansion.

Farmstead’s business has grown significantly while hitting per-order profitability milestones — the company doubled its San Francisco Bay area delivery radius, expanded from its home base in Northern California to Charlotte and will launch service in Raleigh-Durham, Nashville, Miami and at least 13 other cities in 2021. Farmstead is also having great success licensing its proprietary Grocery OS software platform — which increases the efficiency of inventory management plus order picking, packing and delivery — partnering with traditional grocers who want to upscale their e-commerce and delivery game.

“We’re excited to partner with Farmstead to support its national expansion while offering our customers even more local grocery selection on the app,” said Fuad Hannon, head of new verticals at DoorDash. “We’re proud to play a part in accelerating the growth of local grocers and serving their local communities, with a focus on selling essential perishable staples customers need.”

In the U.S., grocery e-commerce has lagged behind other areas of retail e-commerce — high prices, low delivery slot capacity and high fees have slowed adoption. Farmstead fixes all of that. Pradeep Elankumaran, co-founder and CEO of Farmstead, said, “Together, Farmstead and DoorDash can remove the two biggest barriers to grocery e-commerce success: order picking and packing efficiency, and low-cost, high quality delivery with a production capacity of thousands of orders per day. Farmstead’s Grocery OS facilitates efficiency inside the warehouse, and DoorDash provides the last-mile delivery logistics and marketplace platform to reach consumers. It’s a great combination that will help move the industry forward, while fulfilling the promise of e-commerce for grocery for customers.”

Farmstead is known for leveraging proprietary AI technology and a dark store model — delivery-centric warehouses that serve a 50-mile radius, delivering many thousands of orders per day — to maximize efficiency and reduce costs. As a result, Farmstead offers consumers prices comparable to or lower than most supermarkets, but with free delivery to doorstep. The company is growing quickly, with plans to expand nationwide to a primarily mid-market audience.

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