Farmstead Launches Digital Grocery in Bay Area


farmsteadFarmstead, a new online grocer that can deliver local food from farm-to-fridge in 60 minutes, has officially launched in the San Francisco Bay Area. Founded a year ago, Farmstead has completed over 15,000 deliveries to thousands of Bay Area customers, and has raised $2.8 million in seed funding from Resolute Ventures, Social Capital, Y Combinator, and Joe Montana’s Liquid 2 Ventures.

Farmstead matches local supermarket prices and doesn’t require users to meet a minimum amount after their first order. Customers can choose flexible delivery options including one-hour, same-day and weekly services. If a customer joins a weekly eco-optimized delivery route, their order is delivered for free. Otherwise delivery is just $3.99 and one-hour delivery is $4.99.

Prices from Farmstead when we checked were 79 cents per pound for bananas, $2.69 for half gallon of whole milk, and $2.99 per pound for organic tomatoes.

“Farmstead’s goal is to fundamentally transform the American grocery experience with AI technology,” said Farmstead CEO and co-founder Pradeep Elankumaran. “In 2017, consumers shouldn’t have to drive to the store, stand in a line, and buy food of questionable quality which then goes to waste. By sourcing and delivering the best products to customers in just the right amounts in under an hour, we help our customers throw out less food and take fewer trips to the store each week, cutting down on waste and pollution.”

Farmstead’s fulfillment model is specifically designed to reduce rampant waste in the grocery industry, where more than 38 million tons of food waste are generated each year, and one in every seven truckloads of perishable foods delivered to a supermarket are wasted. Using proprietary software, Farmstead customers can quickly select items from a carefully curated array of local farm produce and grocery products. After just one order, Farmstead’s AI calculates and predicts users’ habits to know exactly how much food to order from local sources daily, weekly, seasonally and annually, reducing food waste substantially.

“This is what a truly efficient, eco-friendly grocery experience should look like in an industry with a model that hasn’t changed in 60 years,” said Resolute Ventures partner Mike Hirshland. “Farmstead’s digital micro-grocery model dramatically improves upon the traditional grocery store, and utilizes the gig economy to modernize what has been a low-tech, wasteful sector.”

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. Rather, Farmstead’s grocery fulfillment model cuts out the supermarket altogether.

“Food is such an integral part of life in the Bay Area, along with technology and environmentalism, and Farmstead has blended these things together perfectly,” said Joe Montana, legendary 49er quarterback and Partner at Liquid 2 Ventures. “We’re excited to have the opportunity to invest in Farmstead and look forward to helping them grow nationwide. We believe they will make a big impact on the sector and the lives of Bay Area families.”

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. Farmstead has chosen minimal packaging and reusable ice packs and bags, which drivers collect along with milk bottles from prior Farmstead deliveries for reuse.

Any food that isn’t purchased by Farmstead customers is donated to national food bank network Feeding America, which sends it to a shelter for women in the Bay Area.

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