Online Grocer Farmstead Expands into the Carolinas After Partnership with Alex Lee
LAS VEGAS, NV - The retail landscape has been steadily evolving to bring consumers fresh food, faster. One of the first online retailers to break that barrier is Farmstead, a company that offers fresh, high-quality groceries delivered for free, at lower prices than local supermarkets. Farmstead's concept falls in direct competition with retailers like Whole Foods, who are expanding their delivery services while still committed to their brick-and-mortar format. The company has recently announced its plans to expand its innovative “microhub” model to the Carolinas, following a first-of-its-kind partnership with grocery company Alex Lee—a parent company of Lowes Foods and Merchants Distributors (MDI).
“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’re excited to be the first to partner with Farmstead on this innovative approach to grocery.”
Farmstead’s microhub model originated in the Bay Area, which featured delivery-centric warehouses that serve a 50-mile radius, according to a press release. The inventive model is intended to hone efficiency and reduce costs, allowing the company to expand its reach in new markets without opening any brick-and-mortar stores.
“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,” Pradeep Elankumaran, Founder and CEO of Farmstead, commented. “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.”
The rapidly-growing company has set its sights on North and South Carolina, which will mark Farmstead’s first expansion market, thought Farmstead has plans to expand nationally as well. The company will open several microhubs throughout the states, which will ease entry into new regions, reduce food waste by three to four times, and eliminate food deserts with fast, easy delivery options available to a wider area.
Consumers will greatly benefit from the company’s expansion, as they will be able to get exact orders with no markups, delivery fees, or stockouts. Farmstead supplies customers will high-quality produce, meat, and dairy items from local and national brands—all in one place.
Brick-and-mortar grocery stores can cost up to $10 million to build, take 18-24 months to construct, and often service only a five-mile radius. However, Farmstead’s microhubs cost $100,000 and can be constructed in under eight weeks, all while servicing a fifty-mile delivery radius.
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