Farmstead, Alex Lee Strike Multi-Market Supply Deal
Online grocer Farmstead will expand to the Carolinas after forging a first-of-its-kind partnership with Southeast grocery company Alex Lee Inc., parent company of grocer Lowes Foods and grocery distributor Merchants Distributors (MDI). The partnership will enable Farmstead and Alex Lee to expand their reach in complementary markets, without having to open any brick-and-mortar locations.
The deal was made public at the Groceryshop 2019 trade show, Sept. 16-19, at The Venetian in Las Vegas.
In the Carolinas, San Francisco-based Farmstead’s first expansion market, the company will open multiple microhubs – delivery-centric warehouses serving a 50-mile radius, which the e-grocer said will greatly facilitate entry into new geographies, significantly reduce food waste, and help banish food deserts by making fast, inexpensive delivery available to a wider area.
“When we learned about Farmstead’s microhub approach, we recognized it would be a great model for expanding into new geographies where we don’t have physical stores,” noted Kimberly George, VP, communications and corporate citizenship at Hickory, N.C.-based Alex Lee. “This partnership will help improve the reach of Alex Lee in the Carolinas, and boost revenue, with little risk. We’re excited to be the first to partner with Farmstead on this innovative approach to grocery.”
“We built and perfected the microhub model in San Francisco, and showed that it’s possible to leverage technology and build strong supplier relationships in order to make online grocery profitable,” said Pradeep Elankumaran, founder and CEO of Farmstead. “Now we’re ready to expand it to other geographies. This partnership with Alex Lee is the first of many we’re planning with grocery chains and distributors across the country.”
In other Farmstead Groceryshop news, more grocery brands are signing on to its Refill & Save program designed to boost customer retention and gain valuable insights into shopper behavior. Among the national brands now taking part in the program are Niman Ranch, Little Secrets, Tillamook Cheese and True Story Foods, as well as Bay Area companies Alexandre Farms, St. Benoit Creamery and Santa Cruz Pasta Factory.
Refill & Save provides customers with recurring orders featuring considerable discounts on such staples as milk, eggs, fresh fruit, fresh vegetables and bread, with a weekly order minimum of $20.
As the parent company of the Lowes Foods and Just Save banners, which operate more than 80 stores, Alex Lee is No. 50 on Progressive Grocer’s 2019 Super 50 list of the top grocers in the United States.