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California online grocer delivers the goods with entry into Austin market

California online grocer delivers the goods with entry into Austin

Farmstead
Farmstead moves into Austin this year. Farmstead/Instagram

A California-based online grocery delivery service is coming to Austin, moving into the home market of one of its major competitors, Whole Foods.

Farmstead, which hypes itself as the first online grocer to offer high-quality groceries delivered for free, will break into Texas when it brings its service and app to the Austin area this year. Austin will mark the San Francisco Bay Area company’s fifth major city, and Farmstead plans to further “expand to at least 10 more markets in 2021.”

Though Farmstead won’t be up and running until mid-2021, the company has opened its Austin waitlist to the first 1,000 customers wanting to sign up.

Farmstead attempts to separate itself from other delivery services by tapping its proprietary technology and a dark store model that includes delivery-specific warehouses that serve a 50-mile radius. Because of this structure, Farmstead says it’s able to offer shoppers comparable — or lower — prices than most supermarkets. And with no delivery fees, the company may eat into some similar local offerings, namely Whole Foods’ delivery service through Amazon, which tacks on a fee unless a specific price limit is met.

The market may be ripe for Farmstead’s model, especially given locals have turned to alternative sources for food delivery during a coronavirus pandemic that has kept us housebound for months on end. Indeed, many Austin restaurants have upped their games in the past year, adding delivery or subscription-box services, and plenty of Austinites have shunned national meal-delivery-kit services like Blue Apron in favor of local businesses like Farmhouse Delivery, which, in addition to delivering farmers-market-quality produce, also delivers grocery items and meal kits from local restaurant partners like L’Oca d’Oro, Lamba’s Royal Indian Food, and Antonelli’s Cheese Shop.

Through Farmstead, customers will be able to get all their groceries — from local must-haves to national brands, as well as fresh meats, dairy, and produce (locally sourced when possible) — from one place with same-day delivery. As part of its expansion into the Austin area, Farmstead will open several of its dark stores, which the company notes eases entry into new markets, reduces food waste by three to four times, and helps eliminate food deserts by making fast delivery available to a wider area.

“Austin is an incredible potential market for Farmstead’s unique online grocery model. It’s a rapidly growing and vibrant market that appreciates great food,” says Pradeep Elankumaran, co-founder and CEO of Farmstead. “Farmstead can deliver real value to Austin because we cracked the code on how to make grocery delivery fast and inexpensive without sacrificing quality or wasting food. We’re excited to roll out our service to Austin residents.”