Dive Brief:
- Online grocery service Fresh Midwest has launched in northern Chicagoland, according to a company press release. The company will serve Kenosha, Wisconsin, through Chicago’s Lincoln Park neighborhood to start, with plans to expand into more of the metro area in 2021.
- Fresh Midwest will provide grocery and meal delivery with a focus on produce and products from local farms and artisans as well as meal solutions from local restaurants. Orders will ship Monday through Saturday with a $30 minimum, free delivery on orders over $75 and a $4.95 fee below that threshold. The company assembles all orders from its Kenosha warehouse.
- Company founders Patrick and Mike Fitzgerald have a long history in the food business, having helped run a prominent wholesale produce distribution company. The Chicago natives also have a longstanding friendship with Peapod co-founder Thomas Parkinson and have hired two former Peapod executives to help run Fresh Midwest.
Dive Insight:
While Fresh Midwest is entering a crowded grocery market in Chicago, its local roots and affiliation with Peapod alumni offer more advantages than the typical online startup.
In the launch announcement, the company touted its affiliation with Peapod co-founder Thomas Parkinson, who said the new e-grocer is "delivering a need for fresh food to consumers' homes on the day and time they want it." Fresh Midwest has also hired two longtime Peapod executives — Tony Stallone, who will be Fresh Midwest’s chief merchant and "food guy," and Mary Rose Neises, who will be the company’s marketing lead.
Stallone was vice president of merchandising for Peapod and also the creator of the grocer’s meal kits. He worked at Peapod for 20 years. Neises, who worked at Peapod for 17 years, drove e-commerce and customer loyalty initiatives and held senior marketing roles for the Midwest and Washington, D.C. market.
Peapod’s exit from the Midwest early this year leaves room in the market for a new player. In February, Ahold Delhaize shut down operations in the region to focus on further integrating the service with its physical stores on the East Coast. This took Peapod out of a legacy market where the economics were challenging, but came right before the pandemic boosted online grocery sales considerably.
Fresh Midwest highlighted its strong connections to local produce growers through the Fitzgeralds' wholesaling experience, but the startup will have to contend with numerous omnichannel competitors, including Amazon Fresh, Mariano's and various Instacart- and Shipt-assisted grocers.
Fresh Midwest said it will limit handling of all products and provide contactless delivery to meet safety standards.
Other companies are seizing the growth in online grocery, as well. E-grocer Hive just launched a nationwide marketplace, and online grocer Farmstead recently announced plans to expand from the San Francisco Bay Area to Charlotte, North Carolina.
