Farmstead expanding to Carolinas through new partnership

Burlingame, Calif.-based Farmstead, an online-based grocery retailer, is expanding to North Carolina and South Carolina after inking a partnership with Southeast grocery company Alex Lee, the parent company of grocer Lowes Foods.

Farmstead and Alex Lee made the announcement from Groceryshop 2019, taking place through Sept. 19 in Las Vegas.

According to Farmstead, it plans to open multiple microhubs in the Carolinas, which will greatly ease entry into new geographies, reduce food waste and help eliminate food deserts by making fast, inexpensive delivery available to a wider area. Physical supermarkets can cost up to $10 million to build, take 18-24 months to construct and typically serve a five-mile radius, according to Farmstead. By contrast, a Farmstead microhub can be constructed in under eight weeks for just $100,000, and can serve a 55-mile delivery radius, the company said.

“We built and perfected the microhub model in San Francisco, and showed that it’s possible to leverage technology and build strong supplier relationships in order to make online grocery profitable,” said Pradeep Elankumaran, founder and CEO of Farmstead. “Now we’re ready to expand it to other geographies. This partnership with Alex Lee is the first of many we’re planning with grocery chains and distributors across the country.”