When San Francisco’s shelter-in-place order went into effect, Farmstead’s order volume immediately increased by 5x, and its average basket size doubled. This meant that its staff was picking, packing and delivering 10x the volume it was before.
During the shelter-in-place, there was a severe shortage of grocery delivery capacity in the Bay Area – particularly from traditional grocers, who had trouble scaling their service due to existing stores’ structural constraints. Farmstead by contrast was architected for delivery, relying on a microhub that’s stocked daily according to predictive demand models, and able to serve a 50-mile radius.
According to Farmstead CEO and co-founder Pradeep Elankumaran, there are approximately 50,000 grocery stores in the US and each can only do about 100-150 online orders per day. That’s about 7.5 million deliveries per day as the total capacity for online grocery delivery. But with the entire US – 128 million households – under restricted movement at some point during the pandemic, every grocery delivery was maxed out. “Our new facility, coupled with our continued hiring spree, will help us immediately quadruple our delivery capacity, and grow it by 10x in the coming months,” said Elankumaran.
According to Elankumaran, Farmstead’s microhub model and proprietary software have enabled the company to deliver groceries at prices lower than local stores, with no delivery fees, with net-profit per order targets that are 4-5x higher than traditional grocers.
Farmstead is making progress against that goal, doubling down on servicing more households than ever before, and leveraging its proprietary technology to help it accurately predict demand, manage order picking, and efficiently route orders and delivery.
About FarmsteadFarmstead is the first online grocer to offer fresh, high-quality groceries, delivered for free, at better prices than local supermarkets. Using AI technology, Farmstead has reinvented the grocery buying experience and rewired how food moves across the country, to significantly reduce food waste and fulfill its mission of making high quality, locally sourced food accessible to everyone. Visit https://www.farmsteadapp.com or follow @farmsteadapp.
Media contact:Michelle Faulkner [email protected]