GROCERYNews

FreshDirect’s Calculated Strategy of Smart and Fast Distribution To WIN HEARTS

Ever wondered what happens behind the scenes in the farm-to-fork retail chain? Pushing a line of food packages through conveyor belts may be mundane for a worker at FreshDirect’s distribution center in New York City, but a bubble of systematic management backed by sophisticated investment floats above the twists and turns of these automated machines. As the competition grows fiercer in the home-delivery game, prime need of the hour for companies is to develop state-of-the-art distribution systems that not only speed up the delivery process but also convince online consumers for repeating footfall to their e-commerce store. And FreshDirect leaves no stone unturned to get headway in this multimillion-dollar sector of the grocery business.

FreshDirect, an online-only short supply chain service, is a pioneer in the source-to-door delivery game and has cultivated the market to what it is now. It was established in 2002 in New York City and has ever since showed no signs of slowing down. It has been an upward progress with expansion plans in every direction of the country. As per records, FreshDirect’s reported revenue in 2017 was a whopping $600-$700 million.  

The home-delivery functionality (an estimated business amounting to $40 billion by 2021) is a profitable pie and every brand is forever hungry to bite into the largest piece. Big brand names like Amazon, Walmart, and Kroger have all upped their ante as they compete to win online consumers and profits.

A gargantuan challenge in this business, however, is to maintain the quality of the food throughout the transportation process. Consumers expect to see the exact quality of food delivered to their doorstep as they would if they walked in a local grocery store. Food tampering during transportation disrupts the consumer’s expectations of quality which shakes their belief of ordering groceries online. A peek into FreshDirect’s efficient automated distribution center based in New York reveals how workers are on their toes, religiously wrapping, labeling and distributing fresh swordfish that takes less than 24 hours to reach consumers. For FreshDirect, efficiency is key and according to Chief Food Adventurer and Co-Founder David McInerney “It takes us less than a days’ time to get the fish in the warehouse depending on when they’relanding.”

FreshDirect’s logistic hurdles are eradicated in the new facility. With 15 different temperature-controlled zones implemented for every type of product to software that indicate the most efficient distribution route to workers, they’ve got it all covered. Technology has evolved and how!

FreshDirect being an online-only service faces its fair share of challenges as it is directly in competition with grocery chains that fulfill their orders with the help of existing on ground stores all across the country. With retail chains like Kroger and Walmart investing a plethora of resources in e-commerce services for consumers, FreshDirect faces an imminent threat.

Shedding some light on FreshDirect’s strategy to achieve faster fulfillment, better margins, and handling delivery costs, Chief Executive Jason Ackerman says “We don’t ship Evian to Oklahoma, we’re not a national shipping business. We focus on localizing our business and we have a lot of technical support for our endeavors. A significant part of the facility is discarding tons and tons of operating costs. Its faster, it’s handled less and it’s kept at the right temperature.” On the bright side, this competition is only benefitting FreshDirect’s consumers as attractive deals are thrown their way to convince them to buy products. FreshDirect certainly knows where it’s going and we do hope that it can keep up the excellent service.

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