Wonder why your grocery delivery service is more expensive than going to the store? A thread

While COVID19 has turned the grocery delivery industry into a rocketship, pre-pandemic online grocery systems used large, expensive warehouses or supermarkets to serve cities with lots of people in a few square miles or suburbs with high household income.

Existing online grocery options also add substantial delivery and per-order fees to make up the loss. While you can get a mattress delivered in the mail anywhere in the US for free, this is not true for perishable products like milk or eggs.

Unfortunately, those choices resulted in unfavorable dynamics for over 70% of US market -- suburban households with tight weekly grocery budgets also strapped for time are last in line to get access to options that can get them high quality, low prices and free delivery

Those choices also naturally suppress broad interest from those same households since the fees make it more expensive than going to the store yourself — nobody wants to pay $10-20 each week in fees to buy groceries on top of their existing ~ $100/week budget!

The US has a $1T grocery industry, but pre-COVID adoption was just under 5%. Moreover, there are currently only ~7.5 million daily grocery delivery slots for ~138 million households nationwide. Unacceptable.

When not enough shoppers are interested in getting groceries delivered because of structural issues tied to the industry, then your own grocery deliveries each week get more expensive than going to the store. But there’s a fix.

Helping grocery shoppers keep to their budget while delivering fresher, more local food to doorsteps at better prices than stores, with free delivery, is key to attracting them nationwide. This also lowers how much you pay for your own grocery delivery each week.

It's almost impossible to pull this off with ancient models, much easier when companies like Farmstead re-engineer the food value chain.

At Farmstead, we use data to push the costs of food waste way down (from 35% at supermarkets to under 5%), add software automation to increase the efficiencies of packing orders from our small dark grocery warehouses, and deliver to you and your neighbors at the same time.

From day one, Farmstead has been designed and engineered to reduce cost of delivery in sparser suburbs, building efficiencies that lead to lower prices than supermarkets.

As more people become weekly Farmstead shoppers, our software systems ensure that the cost to Farmstead of packaging up every customer’s online grocery order drops, which means we service larger areas and more customers out of one location than anyone else.

Since our prices either match or are lower than supermarkets, we can now deliver to more shoppers who have historically found that these options that save them time and money have been closed to them.

And on that note, we just opened up 19 new Bay Area cities, doubling our free delivery radius to areas historically de-prioritized for affordable delivery.

Our new locations: the sparser suburbs heading east from Oakland to Concord, heading south down I-680 to Livermore, more zipcodes in south San Jose and Los Gatos. https://www.mercurynews.com/2020/09/03/online-grocer-farmstead-expands-bay-area-deliveries-tech-grocery/

Starting with these, we have big plans this year and next, bringing our model to every part of the US! Take a look at https://www.farmsteadapp.com