Farmstead moves on up as grocery delivery passes tipping point

US online grocer Farmstead is moving to a larger San Francisco facility to increase its delivery capacity by 10x. 

It says that this is the result of the coronavirus pandemic driving a huge increase in demand for grocery delivery.

Farmstead has signed a lease for a new microhub space in Burlingame. This is 6x bigger than its previous microhub on Harrison Street. The company will be transitioning operations to the new facility in July, and will soon have the capacity to serve tens of thousands of Bay Area households per week.

“Grocery delivery has now passed the tipping point,” says Farmstead CEO and Co-founder Pradeep Elankumaran.

“The recent San Francisco shelter-in-place order accelerated adoption of grocery delivery by three to four years. In the Bay Area, we went from 5% adoption to 30-40% adoption in a matter of weeks, and are gaining confidence that most new customers will continue weekly service through and after the Covid-19 pandemic.”

“Our microhub model and proprietary software enabled us to handle the increase in volume from just one microhub. Traditional grocers struggled with capacity and per-order economics, and are already pulling back on delivery and offering order pickup instead,” he concludes.

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