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Online Grocer FreshDirect is taking on Amazon and Wal-Mart

Before Instacart, Amazon Fresh (AMZN), and Jet (WMT) started vying for all your grocery dollars, FreshDirect, which serves New York City and five states in the Northeast, had the market mostly to itself.

“When we first started, people thought we were crazy,” says FreshDirect CEO Jason Ackerman, a former investment banker who co-founded the company in 1999. Other grocery delivery services, like Stop & Shop’s Peapod, have since leveraged brick-and-mortar stores to fill their orders. But FreshDirect built its network from the ground up.

Ackerman says FreshDirect relies on technology to create the infrastructure and supply chain necessary to deliver milk, eggs and beer in as little as an hour. It’s why Ackerman calls FreshDirect “a food-tech company” and not an online grocer.

Tech drives innovation at FreshDirect by predicting customers’ food preferences on certain days and at different times (for example, milk on Monday mornings or wine on Saturday nights). The company is also building a state-of-the-art automated warehouse in the Bronx, New York.

Yet, with all of that said, Ackerman does not see robots taking over warehouse or delivery jobs anytime soon. And FreshDirect will still have people slicing deli meat and cutting carrots.

As he puts it, “I do not see robots taking over for our chefs.”

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