From farm to front door: Local, organic online grocery startups target niche market
(Credit: John Robinson and Relay Foods)
Online grocery delivery startups that serve the Washington, DC-area hope consumers will find it more convenient to get local, fresh and organic food delivered straight to their door. But will they pay more?
Bricks-and-mortar grocery stores shouldn't worry just yet, as new research states that startups won't steal much business anytime soon.
Forrester Research, Inc., says online grocery stores still face the high costs of home deliveries, in a November, 2014, report on the $1 trillion grocery industry.
Despite these findings, a group of local online delivery startups are making a dent, company owners say.
Relay Foods makes budgeting easier
A Relay Foods truck driver delivers an order to a customer's home. Relay's home delivery fee's are $12-$15, depending on location, or a $30 unlimited fee per month. A free pick-up location option is available as well. (Credit: John Robinson and Relay Foods)
Business is growing and expansion is occurring for the local and organic grocery delivery service, Relay Foods, which recently expanded its business into North Carolina.
Founded in 2009 out of CEO Zach Buckner’s basement in Charlottesville, Va., Relay Foods, officially named Retail Relay Inc., was originally started to compete with Amazon.com.
Relay, which planned to sell everything from fruit to seatbelts online, decided to narrow its focus to local foods, according to DC and Baltimore Regional Market Manager Jen Hawse, formerly the Baltimore sales manager for Relay.
“We didn’t want to compete with Amazon and we found this niche in local food delivery that was not being fulfilled, especially in Charlottesville,” said Hawse by phone.
New Relay customer, Nevin Martell, a freelance writer and DC resident, uses Relay as the primary grocery service for him and his family about once a week.
Martell said Relay allows him to consolidate the majority of his grocery shopping to one place and that the online grocer offers better quality, locally produced goods for prices cheaper than higher-end stores in the area, like Whole Foods, saving him both time and money.
Relay Foods works with local producers, like Radical Roots Community Farm in Keezletown, Va., to bring local and organic goods to their customers online. (Credit: John Robinson and Relay Foods)
“At Relay, you know how much you want to spend, or at least we know how much we want to spend on our groceries every week, so when I get to the checkout if we’re over I can make that determination as to what gets nixed right there on the spot,” said Martell, by phone.
Relay also helps Martell avoid impulse buying and overspending.
“It’s much easier to stay within budget on Relay just because you see the numbers and you can kind of play around with them at the end,” said Martell.
Relay’s home delivery services are an extra $12-$15 per bundle depending on the area, or a $30 per month fee for unlimited delivery, as stated on Relay’s website. They also have a free pick-up location option in select areas around D.C. and Baltimore.
From the Farmer uses online marketing to promote
(Source: Rey Lopez, Under a Bushel Photography, for From the Farmer.)
Similar to Relay in its humble beginnings and online marketing practices is the fairly new home produce delivery startup in the district, From the Farmer.
Founded by Nick Phelps in his garage in the Washington, D.C., metro area, in 2011, the University of Denver graduate and his partner, Jason Lundberg, decided D.C. was a great spot to start their business because of the huge demand for local food in the area, according to Sourcing Manager, Tyler Baer, by phone
.From the Farmer offers three online customizable bushels, which feature six to 10 seasonal produce items from $35 to $55 per week. Bushels are delivered overnight to your front door, if you live within the company's service area in D.C., Maryland and Northern Virginia, at no additional fee, according to the company website.
According to Baer, From the Farmer gains most of its customers through word-of-mouth online, using Google AdWords, where they offer different promo-codes to customers. They also work with the foodie blogosphere to gain new customers.
Baer said that in the future they want to continue to grow the technical side of their website by making it more user-friendly for consumers, but their main focus is on local food.
“We want people to be able to eat meat and drink milk that they feel connected to and know that those cows had a happy life,” said Baer.
Hometown Harvest supports sustainable agriculture
Hometown Harvest offers seasonal produce items to their customers in weekly bags. (Used with permission by Tony Brusco of Hometown Harvest, facebook.com/HmtwnHrvst/)
Another niche company with an interest in sustainable agriculture and a budding online presence is Hometown Harvest, previously known as South Mountain Veggies, founded by Tony and Abby Brusco in 2009.
Like Relay Foods and From the Farmer, Hometown Harvest says they are all about making online grocery shopping as well as their home delivery service easy on their customers.
Angelic Little-Turner, a Hometown Harvest customer of over five years, likes the ease of ordering fresh fruits and vegetables from the company online about once a month in the Fall and Winter and twice a month in the Spring and Summer.
“I rely on public transportation, so this actually saves me money in the long run because I don’t have to make as many trips or pay for a taxi when I shop in larger quantities,” said Little-Turner by email. “The convenience is a huge factor for me.”
Little-Turner, who is also a customer of Hometown Harvest’s old partner, South Mountain Creamery, said that ordering her produce online helps her plan meals and curbs impulse buying.
“Ultimately, I think I end up saving money because I shop smarter,” said Little-Turner.
Hometown Harvest’s online shop offers items such as fresh and organic produce, meat and dairy, baked goods, beverages and more a la carte, as well as veggie and fruit bags from $26, for a small fixed bag, to $49.50, for a large custom bag.Hometown Harvest ensures the food they deliver is 100 percent non-GMO and completely pesticide-free and antibiotic-free.
The Frederick, Md., company works with local growers and farmers in Maryland, Virginia and Pennsylvania to deliver to the D.C. metropolitan area.
“I know with my own family, I rarely have time to visit the local farmers market, yet I really want to eat fresh local foods,” said Abby Brusco in an email. “Grocery stores have very limited local options. So I believe Hometown Harvest solves a problem with our customers.”
Can niche companies compete with larger services?
Relay Foods, From the Farmer and Hometown Harvest works with local farms and producers to provide fresh and organic produce and other goods to their customers. (Credit: John Robinson and Relay Foods)
With larger companies expanding their online grocery services to major markets, such as AmazonFresh, Instacart and Peapod, Relay Foods, From the Farmer and Hometown Harvest are all thinking of ways to stay competitive
.“One of our strengths, I believe, is the fact that this is our hometown. We will not be looking at expanding our business beyond the local area. I will leave that to the big business like Amazon, or Peapod, who simply want to deliver groceries to you without a lot of consideration of supporting local sustainable agriculture,” said Abby Brusco.
From the Farmer shares a similar sentiment in terms of keeping their business localized, according to Baer.
“There’s some really good competition and we really enjoy being a part of this local food community here in DC,” said Baer.
Instacart and Peapod do offer organic products to their customers, with prices similar to those within the grocery stores in which they work with and are sponsored by, such as Kroger, Whole Foods and Giant. AmazonFresh, although not currently accessible in the D.C. metropolitan area, does offer seasonal and organic produce and works with local businesses in the areas in which they serve.
Meanwhile, Relay wants to work on their pricing to stay more cost-competitive in the overall online grocery store market, according to Hawse, they also have other business and marketing plans in the works.
“Something that we’re working on that we’re really excited about is our meal-planning, which is going to be coming in the next several months,” said Hawse. “It’s going to be similar to a Blue Apron service.”
A chart within May 2014 report by the Food Marketing Institute, stated that around three percent of retail grocery sales are made online as of 2013, according to a Nielsen Retail 2016 Annual Report, but forecasts suggest a seven to 17 percent increase in online grocery sales within the next decade or more.
