Farmstead Launches 1-Hour Delivery in Chicago
The rapidly growing online grocer Farmstead has officially launched in the city of Chicago and nearby suburbs, with delivery in as little as one hour.
Farmstead leverages proprietary artificial intelligence technology and a dark-store model — delivery-centric warehouses that generally serve a 50-mile radius — to maximize efficiency and reduce costs. As a result, the company says that it offers prices comparable to or lower than most supermarkets, but with free delivery to customers’ doorsteps. All deliveries are also batched together with other orders in the same neighborhood to reduce carbon emissions.
Its new 30,000-square-foot warehouse, located in Franklin Park outside of Chicago, will help deliver a mix of fresh produce, national brands such as Kraft, and local Chicago brands such as Oberweis Dairy, Intelligentsia Coffee, Gino’s East Pizza, Vienna Beef and Hometown Bagel Chips.
“Farmstead is different from any other grocery delivery option in Chicago,” said Pradeep Elankumaran, co-founder and CEO of Burlingame, Calif.-based 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.”
After opening its Chicago waitlist last month, Farmstead’s list filled within days.
Customers can choose a same-day delivery slot (a two- to four-hour guaranteed delivery window) for one-off everyday ordering, or sign up for a free once-a-week delivery. According to Farmstead, more than 70% of Farmstead customers eventually sign up for weekly deliveries, earning additional discounts on fresh staple products they purchase regularly, while getting guaranteed delivery windows each week. They can adjust or cancel weekly orders as needed.
The company is growing quickly, with plans to expand nationwide to a primarily suburban mid-market audience. Farmstead’s service originated in the San Francisco Bay area, and now also includes service in Charlotte and Raleigh-Durham, N.C., and Miami.
Farmstead is also offering its technology stack, Grocery OS, to other grocers wishing to improve operations and compete more effectively against dominant e-commerce players.
