Restaurant delivery powerhouse Postmates is expanding into the grocery world.
The well-funded San Francisco startup today announced a new grocery delivery program in Manhattan, San Francisco and Los Angeles. The familiarly named Postmates Fresh program promises most deliveries in 30 minutes or less, a quarter of the turnaround time for its competitors, the company says.
Postmates offers the option of a $3.99 individual order fee or $9.99 monthly plan. These options are significantly cheaper than Amazon’s grocery arm, AmazonFresh, which requires a $99 annual membership in addition to a $14.99 monthly subscription to Fresh. Instacart charges $5.99 to $7.99 per order, depending on the store and delivery time, and an additional service fee.
Postmates is working with small, independent stores like Farmstead in San Francisco, East Village Farm in New York and Urban Radish in Los Angeles. Postmates said it prefers to partner with grocers that get their ingredients from organic farms.
Postmates also said today that it has redesigned its app for iOS and Android, making it easier to find restaurants and groceries.
Amazon’s deal to buy Whole Foods for $13.7 billion has shaken up the grocery industry. Amazon has started integrating Whole Foods products into AmazonFresh and made some changes at Whole Foods, but the two companies have only scratched the surface.
Speaking at the 2017 GeekWire Summit, Instacart CEO Apoorva Mehta called the Amazon-Whole Foods deal a “blessing in disguise.” It has pushed grocers to think more about online and delivery strategies, and Instacart just this week inked a deal with Ralph’s, a division of Kroger, for grocery delivery.
“At this point retailers are coming to us,” Mehta said. “When the Amazon/Whole Foods announcement happened, essentially every major grocery retailer in the country had an emergency board meeting and right after that board meeting they called us.”
Now Postmates’ new Fresh program gives an outlet to small, local shops to have their own delivery offerings.