Instacart and Shipt have New Competition

The Lempert Report
June 01, 2020

And it’s not from supermarkets.

With the huge uptick in online ordering and food delivery, smaller upstarts have stepped in, hoping to get a piece of what looks like to be the new normal.

Stats differ – some say pre-covid-19 online grocery delivery averaged about 3-4% - now some estimates put the industry at 28%.

 “I’ve been watching [the coronavirus] since the start of the year, but I should have taken it far more seriously,” said Michael Robinov, co-founder of Farm to People, who told Yahoo finance that his business has grown by 400% since March 1. The Brooklyn, New York, company offers seasonal farm boxes with options to add meat, dairy and pantry items. In March, the company tripled its workforce in response to the sudden growth, now with 35 warehouse staffers and 25 drivers.

Farm to People has already surpassed its original target—1,500 customers by the end of 2020. “Our new hope is at least five times that” and a new distribution center, Robinov said. Delivery has been the key bottleneck—for now, he’s solved that problem with an pool of off-duty Uber drivers who use Farm to People’s routing software.

Another Brooklyn Local Roots is also in the game – and doing well. Initially created as a sort of grocery speed dating site (customers picked up their seasonal produce at bars and cafes), it now delivers boxes right to your house (whether you’re single or not) according to Yahoo.

Founder Wen-Jay Ying said, “overnight, we had to hire 12 people who were healthy, wanted to work, weren’t going to file for unemployment and had a car.” Next, she had to ensure her farmers had product and that her team was proficient with new routing software and prepared for a never-ending stream of customer questions. “Right now, we’re working seven days a week, 24-7.”

Is this the new grocery normal?