Farmstead, DoorDash eye longer online grocery reach

Online grocer Farmstead is extending its reach through a partnership with last-mile food delivery provider DoorDash.

Farmstead and DoorDash said Tuesday that they plan to integrate platforms, giving retailers using Farmstead’s Grocery OS for online grocery delivery access to DoorDash’s delivery network and services. Grocers employing Farmstead’s software will gain access to DoorDash via Drive, the delivery specialist’s white-label fulfillment platform that enables direct delivery for any business.

Farmstead’s grocery brand also will become available through the DoorDash app and website for one-hour delivery in all of Farmstead’s active markets, the companies said. Farmstead’s current markets — the San Francisco Bay area and Charlotte, N.C. — cover 19 million households, and the e-grocer said its upcoming 15-city expansion will give it access to 75% of the $1 trillion U.S. grocery market.

The partnership, too, will allow grocers using the Farmstead platform to list their brands on DoorDash’s app and websites to provide one-hour delivery from “dark” locations dedicated to online grocery service, expanding their coverage area and bolstering delivery operations, Farmstead and DoorDash said.

“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,” according to Pradeep Elankumaran, co-founder and CEO of Farmstead. “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.”

Related:Online grocer Farmstead goes live in Charlotte, expanding to Raleigh-Durham

Farmstead said its upcoming 15-city expansion will bring access to 75% of the $1 trillion U.S. grocery market.

In September, Burlingame, Calif.-based Farmstead began licensing its Grocery OS platform to other grocery retailers to help meet rising demand for online grocery shopping. The solution is designed to boost the delivery capacity and profitability of retailer-controlled pickup and delivery fulfillment operations — whether from a supermarket, “dark store” space or delivery-only warehouse — and enable self-management of marketing, order picking, packing and delivery. Farmstead has said its platform supports last-mile one-hour delivery (five-mile radius) and batched same-day delivery (50-mile radius) for very low or no delivery fees, with no added per-order fees and a delivery cost to the grocer that’s typically less than $10 per order.

Related:Schnuck Markets teams with DoorDash for meal delivery

Farmstead noted that Grocery OS has enabled its own online grocery service to offer consumers prices comparable to or lower than most supermarkets, but with free home delivery. The company said it recently landed $7.9 million in new funding to fuel its national expansion. Farmstead has doubled its Bay Area delivery radius and expanded from its home base in Northern California to Charlotte, and it aims to launch service in Raleigh-Durham, N.C.; Nashville, Tenn.; Miami and at least 13 other cities this year.

“We’re excited to partner with Farmstead to support its national expansion while offering our customers even more local grocery selection on the app,” Fuad Hannon, head of new verticals at DoorDash, said in a statement. “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.”

For DoorDash, which went public in December after launching an IPO the previous month, the alliance with Farmstead continues its expansion into the grocery arena. Last August, DoorDash — known primarily for restaurant food delivery — announced plans to delve deeper into the on-demand grocery delivery market with the launch of its new DashPass subscription service. Initial retail partners included Smart & Final, Meijer, Fresh Thyme Market, Hy-Vee and Gristedes/D’Agostino. At the time, Hannon said the new service marks “the extension of DoorDash in the overall grocery business.”

Overall, San Francisco-based DoorDash provides on-demand delivery and logistics services to local and national businesses in more than 4,000 cities and all 50 states across the United States, Canada and Australia.