Farmstead makes Windy City debut

Pure-play online grocer Farmstead has launched its fast delivery service in the Chicago area.

Burlingame, Calif.-based Farmstead said Tuesday that it now provides free online grocery delivery in as soon as an hour to customers in the city of Chicago and surrounding suburbs, including such communities as Oak Park, Cicero, Oak Lawn, Evanston, Waukegan, Arlington Heights, Elgin, Schaumburg, Des Plaines, Aurora, Naperville and Orland Park, Ill. The company supports the Chicago same-day service through a new 30,000-square-foot warehouse located just outside the city in Franklin Park, Ill.

Farmstead unveiled its planned Chicago launch in mid-January. The e-grocer noted that its waitlist for the first 1,000 customers to sign up, who received an exclusive $30-off benefit, filled within days. Besides national brands like Kraft, Farmstead is offering 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,” Farmstead CEO and co-founder Pradeep Elankumaran said in a statement. “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.”

Related:Online grocer Farmstead to accept SNAP EBT transactions

Farmstead uses AI technology and a dark-store model to optimize efficiency and reduce costs, with its delivery-centric warehouses typically serving a 50-mile radius.

Chicago marks Farmstead’s fifth market. Founded in 2016, the e-tailer started off in the San Francisco Bay area and last year entered Raleigh-Durham, N.C., and Miami following a late 2020 launch in Charlotte, N.C. The company said it aims to expand nationwide and serve a primarily suburban, midmarket customer base.

Though guaranteeing a two- to four-hour time window, Farmstead focuses on one- to two-hour delivery and serving consumers across a large radius — generally 50 miles — that the company said helps eliminate food deserts while offering better prices than local supermarkets. More than 70% of Farmstead customers end up enrolling in weekly delivery, which brings extra discounts on fresh staple products purchased regularly.

Leveraging artificial intelligence technology, Farmstead said it has “reinvented the grocery buying experience” and “rewired how food moves across the country” to make locally sourced food more accessible and reduce food waste. The online grocer also licenses its Grocery OS technology stack to other retailers, providing a turnkey solution for getting a dark-store delivery operation up and running in two to three weeks, from securing commercial real estate space to inventory sourcing to delivery service.

Related:Farmstead’s Grocery OS helps grocers launch dark-store operations