Farmstead leverages AI technology and a dark-store model — delivery-centric warehouses serving a 50-mile radius — to maximize efficiency and lower costs.
Online grocer Farmstead has formed a partnership with last-mile logistics platform DoorDash to make Farmstead’s grocery brand available via the DoorDash app and website for one-hour delivery in all of Farmstead’s active markets, encompassing 19 million households, and including its upcoming 15-city expansion, which will cover 75% of the $1 trillion U.S. grocery market.
The collaboration will also integrate Farmstead’s Grocery OS software with DoorDash, so that any grocer using the software has immediate access to DoorDash’s platform and delivery network through Drive, the company’s white-label fulfillment platform powering direct delivery for any business. Further, grocers will be able to list their own brands powered by dark locations on DoorDash’s app and websites for one-hour delivery, boosting their reach and streamlining delivery operations.
The partnership and expansion follows Farmstead’s raising $7.9 million in new funding to accelerate its national growth. Farmstead’s business has grown considerably over the past year as it achieved per-order profitability goals: The e-grocer doubled its Bay Area delivery radius and is expanding from its Northern California home base to Charlotte and Raleigh-Durham, North Carolina; Nashville, Tennessee; and Miami, as well as at least 13 other cities in 2021. Farmstead has also begun licensing its proprietary Grocery OS software platform, which aims to increase the efficiency of inventory management, along with order picking, packing and delivery, aiding traditional grocers that want to improve their e-commerce and delivery programs.
“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 San Francisco-based DoorDash, which is more than 4,000 cities in the United States, Canada and Australia. “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.”
According to Pradeep Elankumaran, co-founder and CEO of Burlingame, California-based Farmstead: “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 leverages artificial-intelligence technology and a dark-store model — delivery-centric warehouses serving a 50-mile radius — to maximize efficiency and lower costs. As a result, the company offers consumers prices comparable to or lower than most supermarkets, but with free delivery to doorstep.