Startup believes it can ‘reinvent’ supermarket model

Farmstead, an artificial intelligence-powered micro-grocer operation, launched in the San Francisco Bay area today. The Silicon Valley-based digital service provider believes that it is poised to “reinvent” the supermarket model — if not completely eliminate it — with the help of analytics and technology that facilitates the delivery of food from farm to fridge in 60 minutes.

“Unlike today’s many online grocery delivery services, Farmstead does not pack and deliver groceries from large warehouses in remote locations, charge high fees to send a third party to the supermarket, or charge for delivery changes,” the company said in a release. “Rather, Farmstead’s grocery fulfillment model cuts out the supermarket altogether.”

Thus far, Farmstead has completed over 15,000 deliveries in the Bay Area and has raised $2.8 million in seed funding from a group of venture funds.

Farmstead customers select items they’d like to purchase from what the release calls a “curated array of local farm produce and grocery products.”

After the first order is placed, the company’s AI technology uses the shopping list to predict each user’s habits and thus knows precisely how much food to order from local providers on a regular basis.

“By stocking a constellation of micro-warehouses in the Bay Area with just the right amount of local, minimally-packaged foods, Farmstead delivery drivers are algorithmically routed to use the most efficient, traffic-free, eco-friendly routes, resulting in less congestion,” the company’s release stated about the delivery process.

“We are the store; we have a completely overarching technology platform” said Pradeep Elankumaran, Farmstead’s CEO and co-founder. He described the traditional model of a large brick-and-mortar supermarket as “not necessary anymore.”

Farmstead is not currently pursuing a price undercut model, rather it is matching local supermarket tags. It is not, however, requiring a minimum amount per order after the first delivery.

Customers can opt for one-hour delivery, which costs $4.99, and same-day, which runs $3.99. Setting up weekly deliveries eliminates the shipping cost.

Farmstead is currently only available in the Bay Area but Elankumaran plans on bringing Farmstead nationwide eventually. “We know what the playbook is to kick-start a hub anywhere we want,” he said. 

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Twitter: @DanAMX