Farmstead Becomes First Online-Only Grocer to Accept Digital EBT/SNAP Benefits

Farmstead of Burlingame, Calif., and Forage have forged a new partnership intended to help combat food insecurity in two ways: Farmstead plans to integrate Forage’s technology into its own e-commerce operations by the second quarter of 2022, enabling the acceptance of EBT/SNAP payments on e-commerce orders. Additionally, Farmstead will integrate Forage’s technology into its Grocery OS software, which is licensed to other grocers to help manage e-commerce and delivery operations, thereby making it easier for those grocers to also accept EBT/SNAP payments online.

Through the partnership, Farmstead becomes the first online-only grocer to accept EBT/SNAP payments online, says the company.

“Our mission is to make fresh food accessible to everyone in the U.S.,” Pradeep Elankumaran, co-founder and CEO of Farmstead told WGB. “The majority of the U.S. grocery customers are in the suburbs, and a double-digit percentage of those customers use EBT/SNAP to meet the needs of their family. It’s important to us that our customers get a flawless, no-fee online grocery experience that covers all their preferred forms of payment.”

According to Farmstead, it “operates a fast-growing grocery e-commerce business, and built and leveraged its own Grocery OS software to become the first online grocer to offer fresh, high-quality groceries, delivered for free, at better prices than local supermarkets.” 

Farmstead can deliver within a one- to two-hour window, in a large continuous radius that eliminates food deserts, the company adds. 

Grocery OS, which Farmstead also licenses to other grocers, includes “everything a grocer or retailer needs to get a dark-store delivery operation up and running in just two to three weeks, from commercial real estate space to inventory sourcing to delivery,” says Farmstead.

Currently, the company’s own dark-store facilities serve customers in the San Francisco Bay Area; Charlotte and Raleigh-Durham, N.C.; Austin, Texas; Nashville, Tenn.; and Miami.

“Upon integration, we are targeting to go live in all open Farmstead markets at that point in time,” added Elankumaran. “All Grocery OS customers will also have access to this Forage integration, and Forage can help guide them through the EBT application process.” 

Farmstead’s own deliveries will be free with a $35 minimum order and less than $3.99 if the order is below $35, uniformly irrespective of payment type (whether credit card or EBT/SNAP), says the company. Elankumaran says he can’t speak to the delivery fees of Farmstead’s Grocery OS partners.

Together, Farmstead and the Los Angeles-based Forage say they can help combat food insecurity by enabling more customers to use EBT and SNAP payments to purchase groceries online, when access to brick-and-mortar grocery stores may be limited and other online options come with high fees.

“The online grocery market for EBT users increased by 2,700% between March and July 2020, and has remained high,” said Justin Intal, co-founder and CEO at Forage, in a statement. “Right now, those customers have few choices for grocery e-commerce because not enough grocers accept EBT for online orders [nor] include affordable home delivery. Those grocers who do accept EBT have access to over 40 million Americans who receive SNAP benefits. We’re excited to work with Farmstead to expand the number of grocers accepting EBT online.”

Forage is a third-party processor (TPP) and pin provider that helps merchants and platforms accept EBT online. Forage works with merchants throughout the processes of USDA application and tech integration, which has reduced time to launch from approximately 18 months to six months, says the company. With Forage, merchants gain access to 42 million Americans and a $160 billion EBT spend, while also allowing low-income individuals and families to use its services, the company adds.