TIME Retail

This Company Wants to Kill Your Supermarket

Aisle at supermarket with shopper and shopping cart
Aisle at supermarket with shopper and shopping cart Diana Angstadt—FlickrVision

Farmigo, a small farm-delivered food service, has an audacious dream

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

Benzi Ronen thinks that the supermarkets’ time is up. And his company is just the thing to speed up its demise.

“Our goal is to make the supermarket obsolete from a fresh perspective,” Ronen says.

Farmigo, his five-year-old 30-employee startup, sells produce and other products like milk and cheese purchased directly from farmers for 10%-20% less than equivalent grocery store items. He does it by shrinking the supply chain, essentially taking out the middleman. Users place an order online; the order is fulfilled by a farmer who transports it to a centralized packing hub; and then Farmigo delivers it to community drop-off points for the customer to pick up. This all happens within 48 hours.

“We don’t have a retail store,” Benzi explains. “We get rid of all of that. We source just in time.” That means there’s no waste and produce is brought directly from harvest.

Other sellers, such as Fresh Direct, also cut out the physical store. But Ronen argues that they’re just an extension of the supermarket model, with similar warehouses that keep a huge inventory on hand. By contrast, Farmigo’s hubs are filled exclusively with product that’s just been delivered by farmers and is going out for delivery.

“Our entire food system is based on economies of scale,” he explains, adding that it has contributed to the hub-and-spoke distribution model in which food travels hundreds of miles and can sit on shelves for weeks. “You don’t get fresh in supermarkets, and you also have waste,” he says.

For the rest of the story, please go to Fortune.com.

 

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