Online grocer Farmstead is expanding to the Carolinas as part of a partnership with Southeast grocery company Alex Lee, parent company of grocer Lowes Foods and grocery distributor Merchants Distributors. The partnership enables Farmstead and Alex Lee to expand their reach in complementary markets without the need to open any physical stores.
Farmstead and Alex Lee made the announcement from Groceryshop 2019, taking place Sept. 16-19 in Las Vegas.
Farmstead started in the San Francisco Bay Area, gaining popularity by leveraging proprietary AI technology and a microhub model where warehouses supplied delivery of fresh local groceries to a 50-mile radius to hone efficiency and reduce costs. In the Carolinas, its first expansion market, Farmstead will open multiple microhubs, planning to ease entry into new areas, help reduce food waste, and help eliminate food deserts by making fast, inexpensive delivery available to a wider area.
“When we learned about Farmstead’s microhub approach, we recognized it would be a great model for expanding into new geographies where we don’t have physical stores,” said Kimberly George, vice president, communications and corporate citizenship, at Alex Lee. “This partnership will help improve the reach of Alex Lee in the Carolinas, and boost revenue with little risk.”
“We built and perfected the microhub model in San Francisco, and showed that it’s possible to leverage technology and build strong supplier relationships in order to make online grocery profitable,” said Pradeep Elankumaran, Farmstead founder and CEO. “Now we’re ready to expand it to other geographies. This partnership with Alex Lee is the first of many we’re planning with grocery chains and distributors across the country.”
Related: Farmstead Introduces Smart Shopping List; Farmstead Expands Refill and Save Program.
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