FreshDirect is ready for online grocery boom
Online food retailer FreshDirect is accelerating its growth plans after posting record revenue in 2016.
The company, which currently ships groceries in New York, New Jersey, Pennsylvania, Connecticut, and Delaware, closed a $189 million investment round led by J.P. Morgan Asset Management in 2016.
“The funding we secured from top-tier investors will accelerate our expansion into new markets, double our manufacturing capacity and drive innovative new product lines in 2017 and beyond,” said FreshDirect CEO Jason Ackerman. “In an increasingly competitive market space, we are driven by a passionate team and an even more passionate, growing customer base.”
More than a third of online shoppers expect to buy their groceries online in 2016, according to Morgan Stanley Research, setting the stage for what could be the next big opportunity for e-commerce.
FreshDirect says its plans for 2017 include:
- Geographic expansion: FreshDirect will undertake a significant geographic expansion in 2017 with the launch of its grocery delivery service in a major metropolitan area. Service is expected to begin in Q2, with additional market launches expected in 2018.
- FoodKick: In 2017 the company will focus on building FoodKick’s customer base with an eye on expanding service to additional cities in 2018.
- Expanding Meal Kit Business: FreshDirect will expand its meal kit business with the roll out of new meal kit offerings designed to make it easy for consumers to put fresh, healthy and tasty meals on the table. FreshDirect requires no separate subscription for meal kits and they can be ordered as part of a FreshDirect grocery order or soon via FoodKick, giving consumers maximum flexibility. Meal kit menus will be updated monthly.
- Manufacturing facility: FreshDirect is on track to complete its highly anticipated, new state-of-the-art Bronx facility in 2017, enabling FreshDirect to double capacity, launch new initiatives, accelerate its growth and improve margin. This world-class facility is designed to push the boundaries of efficiency and be one of the most sophisticated automated warehouses in the country. The first teams are expected to move to the new facility in Q3.
“FreshDirect’s success is built on a foundation of innovation and leading as opposed to reacting to the market. In 2017 we will continue to be ahead of the curve in offering our customers additional inspired choices and improving their food-buying experience while executing on our ambitious growth plans including extending our geographic footprint,” Ackerman said.