Farmstead Looks to the Burbs for E-Grocery Growth

This year several 15-minute delivery companies have folded. This is not surprising given the high service costs, and accessibility to a small subset of consumers. San Francisco-based Farmstead has taken a different tack, expanding into multiple suburban markets with an offering tailored to the mass market. It targets the 70% of suburban consumers who typically shop mid-market grocers and have few delivery options.

Farmstead offers fresh produce, locally sourced food and national brands, delivered for free, at better prices than local supermarkets. It has its own network of dark stores and sources from local producers, using data analytics to help customers know when to reorder, and even which items to use next to cut down on food waste. Deliveries can come in as little as an hour, but most customers schedule a regular weekly delivery, so Farmstead can group deliveries by neighborhood to reduce emissions and keep costs low.

We caught up with Farmstead’s co-founder and CEO Pradeep Elankumaran, to learn more about the business model, how it outsources its tech stack to grocers and its planned expansion in 2022.