Episode 28 | Automating Grocery Delivery

Pradeep Elankumaran, Co-Founder & CEO of Farmstead joins Grayson Brulte on The Road To Autonomy Podcast to discuss automating grocery delivery.

The conversation begins with Pradeep sharing how bad experiences with grocery delivery led to the founding of Farmstead. Armed with an idea, Pradeep posted the idea on Nextdoor Mountain View to see if there was a demand for his idea of a better grocery delivery experience. Indeed there was a demand. In 2 days, 200 new potential customers expressed interest in the idea.

One of the key selling points to those potential Farmstead customers the substitution policy.

We told customers that we would guarantee the item. – Pradeep Elankumaran

No longer would items that you did not order show up on your doorstep. This eliminates stress for parents who would no longer have to worry if their child’s favorite milk or ice cream will arrive instead of a substitute.

Our approach is software and a lot of prediction and a lot of very precise control of the data that is inserted into our system which makes the software better.

As the software gets better, prediction gets better. As the prediction gets better, your experience gets better. – Pradeep Elankumaran

One of the other elements of the Farmstead business model is that the company does not pick items from a supermarket, instead, they operate out of dedicated 15,000 – 25,000 square foot warehouses.

Supermarkets are not great places to fulfill online grocery orders. – Pradeep Elankumaran

Farmstead is able to operate this model because of its prediction software. As the Farmstead expands to cities around the United States, the company is using a demand model to gauge interest in the market. One of those markets is Miami.

As Farmstead scales, Grayson asks if Amazon and their growing grocery ambitions are a threat to Farmstead. Pradeep shares an interesting thesis on the grocery market comparing Amazon to Walmart and how Farmstead is well-positioned to gain market share in the online grocery market.

One of the key differences between Amazon and Farmstead is that the company uses reusable packaging. Grayson and Pradeep have an in-depth conversation about packaging and why it is so important for grocery delivery.

The crux of the market of the packaging should really be: is it recyclable? Is it returnable? – Pradeep Elankumaran

From packaging to the current in-store experience, Grayson and Pradeep have a long conversation about consumer habits and their shopping experiences.

Selection no longer matters, curation matters a lot more. – Pradeep Elankumaran

Farmstead is saving consumers time by curating groceries from specialty retailers all within the app. As Farmstead onboards new customers, they are adding new products that appeal to their customers' needs and wants. All the items that are stocked and the quantity of those products are chosen by Farmstead’s predictive software.

With an incredible software solution that is creating massive efficiencies for the company and its customers, Grayson asks Pradeep if Farmstead will adapt its model for autonomous vehicle delivery services.

It all comes down to the customer experience. It’s not about the shiny technology. – Pradeep Elankumaran

When automation can increase the customer experience, Farmstead will go all in.

Wrapping up the conversation, Pradeep shares his vision for the future of Farmstead.

Recorded on Thursday, February 11, 2021

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