Online grocery startup Farmstead finds the Miami market quite tasty

Want to have your fresh mangoes, green plantains, kale and other local produce delivered to your door, along with some favorite national brands? Online grocery startup Farmstead is now servicing South Florida, from Boynton Beach to Key Largo.

Farmstead’s CEO and co-founder Pradeep Elankumaran said  the company has already has signed up thousands of customers in the Miami area. He noted that prices are the same or better than at local grocers and there are no delivery fees. “We are particularly thrilled to tap into South Florida’s vibrant agricultural community in order to offer their produce to shoppers in the region,” Elankumaran said in the news announcement.

Founded in 2018, Farmstead  leverages proprietary AI technology and a dark store model — delivery-centric warehouses that generally serve a 50-mile radius — to optimize inventory levels, maximize delivery efficiency and reduce food costs to consumers.  Miami’s Farmstead hub is in northwest Miami-Dade County.

South Florida is the fourth market for the Burlingame, CA-based startup. In addition to the San Francisco Bay Area, the company operates in Charlotte and in Raleigh-Durham, N.C. Austin service is expected to start later this summer and Farmstead plans aggressive expansion to other cities in the fall.  Elankumaran has said that while it can cost $10 million of dollars to open a new supermarket location, Farmstead can launch a hub in four to six weeks at a cost of $100,000.

Farmstead’s customer base has grown by double-digit percentages month over month throughout 2020 and so far in 2021.  The company has raised $14.7 million in venture capital to compete in the competitive grocery-delivery space.

Farmstead works with local farmers and national distributors to stock up on fresh produce and family-friendly national brands such as Kraft and Nabisco. Consumers go to Farmstead to set up an account and order, and the hand-selected and inspected grocery orders are grouped together for delivery to reduce carbon emissions. Customers can also sign up for a regular “Weekly Program” and get a 5% discount each time they buy the same product again. 

“We’re excited to have Farmstead launch delivery in Miami,” said James Kohnstamm, EVP of Economic Development for Miami-Dade Beacon Council. “Their work in reducing food waste is critical, especially in a growing community like ours. Helping them build fruitful connections with our agricultural partners in South Dade not only gets the freshest seasonal produce to our residents, it expands Farmstead’s positive impact on our local economy.” 

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Nancy Dahlberg