Fresh Direct goes to Washington

Dive Brief:

• Home delivery giant FreshDirect is planning to enter the D.C. market sometime in the near future, according to the Washington Business Journal.
• Last fall, the company received $189 million in funding to help its expansion efforts.
• Other grocery delivery services covering D.C. include several big-pocketed players including AmazonFresh, Google Express, Ahold Delhaize's Peapod and Instacart. It's not yet known if FreshDirect will only cover the District proper or the larger Washington area. 

Dive Insight:

FreshDirect was one of the earliest entries into the grocery delivery market, beginning operations in 2002. It’s going to need that experience to compete with a number of other services already on the market, many of which have more financial power to fund and grow their operations.

Last year, FreshDirect introduced FoodKick, which offers one-hour delivery of customers’ orders. Shoppers also can pick an unlimited option for $119 a year. Innovations like these could help differentiate the company from other brands, but FreshDirect should continue to look for ways to outpace its competitors. 

Some analysts said FreshDirect has moved too slowly in its expansion, not capitalizing on early success to penetrate some major cities before others took a foothold. But others think it was wise to perfect its system and get additional funding, then expand from a place of power. Food delivery options appear to be finally succeeding after a few failed during the dotcom bubble, including Webvan and Kozmo.com, following rapid expansions and millions of dollars in losses.

More and more brick-and-mortar stores are entering the delivery space in an attempt to crowd out companies like FreshDirect, experimenting with click-and-collect, curbside pickup and home delivery options. Pilot projects of this nature are likely to continue into the future, keeping online grocers on their toes.